TQM 1 2

Total Quality Management
For 8th semester B-Tech. students (Global Elective)
As per APJ Abdul Kalam Technological University syllabus, 2015
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Jyothis publishers
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Sr
Arun Mohan
Associate Professor,
Dept. of Mechanical Engineering,
Sree Narayana Gurukulam College of Engineering,
Kadayiruppu, Kolenchery, Ernakulam District, Kerala.
Downloaded From www.ktunotes.in

ACKNOWLEDGEMENT
At the outset, we bow to God almighty for always keeping under His shelter during
this challenging phase of life. We express our sincere gratitude to Dr.C.E.Krishnan, Director,
Sree Narayana Gurukulam College of Engineering, Kadayiruppu for his invaluable guidance
and whole hearted co-operation. A special word of thanks to Prof.K.Rajendran, former
Director and Head of the Institution, Sree Narayana Gurukulam College of Engineering,
Kadayiruppu, for his valuable and whole-hearted support. We also take this opportunity to
thank Dr.Kemthose P Paul., Principal, Sree Narayana Gurukulam College of Engineering,
Kadayiruppu, for his suggestions and sincere leadership.
Our special thanks to Prof. Jayasree S, HOD, Department of Mechanical Engineering,

for her valuable help and suggestions.
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We gratefully acknowledge Assoc. Prof. Binu P P and special word of thanks to
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Mr.Rajesh Kumar R., Associate Professor, Department of Mechanical Engineering, Sree
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Narayana Gurukulam College of Engineering, Kadayiruppu for their inputs and valuable
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We are obliged to all the staff members of Department of Mechanical Engineering of

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Sree Narayana Gurukulam College of Engineering, Kadayiruppu for their selfless and
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affectionate support.
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Total Quality Management
Contents
Module – I ...................................................... 3 2.4.6 Process approach to management ............... 41
1.1 Quality ...................................................... 3 2.4.7 System approach to management ................ 41
1.1.1 Dimensions of Quality ................................. 4 2.4.8 Management by Fact:.................................. 42
1.2 Deming's Contribution and Principles ... 5 2.5 Quality statements ....................................42
1.2.1 Deming’s 14 points for Management ........... 6 2.6 Customer Focus in Total Quality
1.2.2 Deadly diseases of management .................. 8 Management .......................................................43
1.2.3 System of profound knowledge (SOPK) ....... 9 2.6.1 Customer Needs .......................................... 44
1.2.4 The Deming (PDCA) Cycle ......................... 10 2.6 Customer orientation ................................45
1.3 Juran's Contribution and Principles ...... 10 2.6.1 Steps by Companies to bring Customer
1. 3.1 Internal Customer........................................ 10 Orientation ................................................................ 46
1.3.2. Cost of Quality: .......................................... 11 2.7 Customer satisfaction ...............................47
1.3.3 Juran’s Quality Trilogy: .............................. 11 2.7.1 Teboul model of customer satisfaction ........ 47
1.3.4 Juran’s 10 Steps for Quality Improvement: . 12 2.7.2 Kanos customer satisfaction model ............. 48
1.3.5 The Breakthrough Concept: ........................ 13 2.7.3 The ACSI Model .......................................... 49
1.4 Crosby's Contribution and Principles .... 13 2.8 Customer complaint .................................50
1.4.1 Crosby’s Absolutes for Quality Management 2.8.1 Benefits of customer complaints .................. 51
14 2.8.2 Factors causing the consumers to complain 51
1.4.2 Crosby’s Fourteen Steps for Quality 2.8.3 8 Steps to Handle a Customer Complaint.... 53
Improvement: ............................................................ 14 2.8.4 Sources of customer complaint .................... 53
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1.4.3 Crosby’s quality vaccine ............................. 16 2.8.4 Tools of Customer Feedback:...................... 54
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1.5 Seven statistical tools ............................... 16 2.9 Customer retention ...................................54
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1.5.1 Check sheet.................................................. 17 2.9.1 Importance of Customer Retention .............. 55
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1.5.2 Bar chart ..................................................... 17 2.9.2 Strategies for customer retention ................ 56
1.5.3 Histogram.................................................... 18 En
2.10 Total quality control (TQC) ................57
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1.5.4 Pareto charts or Pareto diagram................. 20

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2.11 Total waste elimination ............................58

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1.5.5 Brainstorming.............................................. 22
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2.11.1 7-Wastes of Continuous Improvement ......... 58

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1.5.6 Cause and effect diagram ............................ 22 2.11.2 Principle of eliminating the wastes ............. 59
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1.6 Cost of quality .......................................... 24

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2.12 Total employee involvement.....................59

1.6.1 Cost of Poor Quality (COPQ) ..................... 25 2.12.2 Types of employee involvement: .................. 59
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1.6.2 Goal of Quality Cost System ........................ 26

Benefits of using quality costing ................................ 27
Module – III................................................... 61
3.1 Quality assurance (QA) ............................61
1.7 Taguchi Loss Function............................. 27 3.1.1 Total quality assurance ............................... 61
1.7.1 Characteristics of Taguchi function............. 29
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3.1.2 Quality assurance vs Quality control .......... 62

1.8 Factors affecting quality : ........................ 29 3.1.2 Management principles in quality assurance
Module – II .................................................... 30 62
2.1 Evolution of TQM .................................... 30 3.1.3 Objectives of quality assurance ................... 63
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2.1.1 Four phase model ........................................ 31 3.1.4 Hierarchical planning for Quality Assurance
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2.2 TQM Framework ..................................... 32 64

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2.2.2 European Foundation for Quality Management 3.2 Vendor rating ............................................65
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(EFQM) model TQM ................................................. 34 3.2.1 Objectives of Vendor rating ........................ 65

2.2.3 The four Ps and three Cs framework of TQM 3.2.2 Methods of vendor rating ............................ 65
35 3.2.3 Advantages of vendor rating ....................... 66
2.3 Barriers to TQM implementation ........... 35 3.3 Quality Improvement ...............................66
2.3.1 Non-committed management ....................... 36 3.3.1 Essential Components of Continuous Quality
2.3.2 Difficulty in changing organizational culture Improvement ............................................................. 67
36 3.4 Quality Improvement programs ..............68
2.3.3 Improper planning....................................... 36 3.4.1 Kaizen ......................................................... 68
2.3.4 Insufficient training and education .............. 37 3.5 Deming's P-D-C-A Cycle ..........................69
2.3.5 Improper organizational structure .............. 37 3.6 Quality circles ...........................................70
2.3.6 Difficulty in accessing data/results .............. 37 3.6.1 Characteristics of quality circles................. 70
2.3.7 Lack of properly understanding customers .. 37 3.6.2 Objectives of quality circles ........................ 70
2.3.8 Inadequate use of empowerment and teamwork 3.6.3 Advantages of quality circles....................... 71
38 3.6.4 Limitations of quality circles ....................... 71
2.4 Principles of Total Quality Management 38 3.7 5-S ..............................................................71
2.4.1 Continuous improvement. ............................ 38
2.4.2 Customer focus ............................................ 39 Module – IV ................................................... 73
2.4.3 Leadership ................................................... 39 4.1 Quality Planning .......................................73
2.4.4 Strategic Planning ....................................... 40 4.1.1 Co-ordination through Total Quality Control
2.4.5 Employee empowerment .............................. 40 74

4.1.2 Steps in Quality Planning ............................ 75 6.2 Business Process Re-engineering (BPR)..149
4.2 SWOT Analysis ........................................ 78 6.2.1 Factors affecting the need for re-engineering
4.3 Strategic Planning .................................... 79 150
4.3.1 Strategic grid ............................................... 79 6.2.2 Stages in re-engineering.............................. 150
4.4 Organizational Culture ............................ 81 6.2.3 Difference between Business Process
4.4.1 Objective of Organizational Culture: .......... 82 Reengineering (BPR) and Total Quality Management
4.4.2 Importance of Organizational Culture: ....... 83 (TQM) 151
4.4.3 Components of Organizational Culture:...... 84 4.2.3 Advantages of re-engineering...................... 151
4.4.4 Factors Affecting Organizational Culture: .. 84 6.3 Standardization .........................................152
4.4.5 Learning Organizational Culture: ............... 85 6.3.1 Benefits of standardization .......................... 152
4.4.6 Customer Responsive Organizational Culture: 6.3.2 Disadvantages of standardization ............... 152
86 6.3.3 Types of standards....................................... 152
4.4.7 Characteristics of Organizational Culture: . 87 6.3.4 Levels of standardization............................. 153
4.4.8 Functions of Organizational Culture ........... 89 6.4 Quality system ...........................................153
4.4.9 Dimensions of organizational culture .......... 89 6.4.1 ISO:9000 series of quality system ............... 154
4.5 Quality culture ......................................... 90 6.4.2 ISO :14000 .................................................. 156
4.5.1 Foundation of quality culture ...................... 90 6.4.3 ISI................................................................ 158
4.5.2 Characteristics of quality culture ................ 92 Syllabus .......................................................... 160
4.5.3 Advocates and resistors of cultural change . 93 Model university examination questions..... 161
4.5.4 Paradigm for Effective Change ................... 94
4.5.5 Resistance to Change .................................. 95 Index .............................................................. 162
4.5.6 Strategic approach to resistance to change . 96
4.5.7 Strategy to Establish a Quality Culture ....... 98
4.5.8 Maintaining a quality culture ...................... 101
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4.6 Voice of the Customer .............................. 102
4.5.1 Steps in implementing Voice of the Customer
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(VOC) 102
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4.6 Quality Function Deployment (QFD) ..... 105
4.6.2 Objectives of Quality Function Deployment 106 En
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4.6.3 Modern Quality Systems .............................. 107
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4.6.4 Types of Requirements................................. 108

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4.6.5 Application area of QFD ............................. 108

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4.6.6 Steps involved in QFD process .................... 109

4.6.7 House of quality .......................................... 110
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4.6.8 Steps to the House of Quality....................... 111

Module – V ..................................................... 121
5.1 Six Sigma approach ..................................... 121
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5.1.1 Characteristics of Six Sigma........................ 122

5.1.2 Objectives of 6 sigma................................... 123
5.1.3 Main concepts in Six Sigma ......................... 123
5.1.3 Elements of Six Sigma ................................. 124
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5.1.4 Six Sigma - Methodology ............................. 124

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Six Sigma Training .................................................... 126

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5.1.6 Application of Six Sigma in various Industries

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5.2 Failure Mode and Effect Analysis (FMEA)

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5.2.1 Concepts of FMEA ...................................... 129
5.2.2 Basic Analysis Procedure for FMEA ........... 129
5.2.1 Types of FMEA’s ......................................... 131
Module – VI ................................................... 134
6.1 Total Productive Maintenance ................ 134
6.1.1 Objective of TPM......................................... 134
6.1.2 Similarities and differences between TQM and
TPM 135
6.1.3 Types of maintenance : ................................ 135
6.1.4 Origin of TPM ............................................. 136
6.1.5 TPM Targets: .............................................. 136
6.1.6 OEE (Overall Equipment Efficiency)........... 137
6.1.7 Steps in introduction of TPM in a organization :
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6.1.8 Organization Structure for TPM Implementation
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6.1.9 Eight pillars of TPM .................................... 139

Total Quality Management Module – I –3 –
Module – I
1.1 Quality
Quality is defined as fitness for purpose. A quality product will give customer
satisfaction. A quality product will improve company’s profit. Quality is not concerned with
elements of time and environment. Quality depends up on conformance to design
specification, production system and manufacturing procedures. Quality is achieved through
good quality control program.
Sometimes people visualize quality in absolute terms and for them it can be compared
with beauty and sweetness. According to them it can be compared with certain absolute
characteristics and the product and services must achieve a pre-set standard in order to obtain a
quality rating.
David A. Garvin, Ph.D Professor of Business Administration Harvard Business
School, has given reasons why quality should have different meanings in different contexts.
Harvard professor David Garvin, in his book Managing Quality, summarized five principal
approaches to defining quality: transcendent, product based, user based, manufacturing based,
and value based.
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1. Transcendental View of Quality - Those who hold transcendental view would say, “I can’t
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define it, but I know when I see it.” Advertisers are fond of promoting products in these terms.
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“Where shoping is a pleasure” (supermarket), “We love to fly and it shows” (airline), and “It
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means beautiful eyes” (cosmetics) are example.

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2. Product-Based View: Product based definitions are different. Quality is viewed as

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quantifiable and measurable characteristics or attributes. For example durability or reliability

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can be measured (e.g. mean time between failure, fit and finish), and the engineer can design
to that benchmark. Quality is determined objectively. Although this approach has many
benefits, it has limitations as well. Where quality is based on individual taste or preference, the
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benchmark for measurement may be misleading.

3. User-Based View: User based definitions are based on the idea that quality is an individual
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matter, and products that best satisfy their preferences (i.e. perceived quality) are those with
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the highest quality. This is a rational approach but leads to two problems. First, consumer
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preferences vary widely, and it is difficult to aggregate these preferences into products with
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wide appeal. This leads to the choice between a niche strategy or a market aggregation
approach which tries to identify those product attributes that meet the needs of the largest
number of consumers.
4. Manufacturing-Based View: Manufacturing-based definitions are concerned primarily with
engineering and manufacturing practices and use the universal definition of “conformance to
requirements.” Requirements, or specifications, are established design, and any deviation
implies a reduction in quality. The concept applies to services as well as products. Excellence
in quality is not necessarily in the eye of the beholder but rather in the standards set by the
organization. This approach has serious weaknesses. The consumer’s perception of quality is
equated with conformance and hence is internally focused. Emphasis on reliability in design
and manufacturing tends to address cost reduction as the objective, and cost reduction is
perceived in a limited way–invest in design and manufacturing improvement until these
incremental costs equal the costs of non-quality such as rework or scrap.

5. Value-Based View: Value-based quality is defined in terms of costs and prices as well as a
number of other attributes. Thus, the consumer’s purchase decision is based on quality at the
acceptable price.
According to Garvin it is necessary to change the approach from user-based to product
based as products move through market research to design and then from product-based to
manufacturing-based as they go from design into manufacture. Hence the definition of quality
will change in each approach and can coexist. He also suggested that the definition of quality
will also change from industry to industry.
1.1.1 Dimensions of Quality
In 1993, Lee Harvey and Diana Green of University of Birmingham the suggested five
discrete and interrelated definitions of quality as Exceptional, Perfection, Fitness for Purpose,
Value for Money and Transformative.
a. Exceptional
There are three variations of this ‘exceptional’ concept viz : Traditional, Excellence and
Standards.
1. Traditional- This can be expressed as the distinctiveness, something special or high
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class. It confers status on the owner or users and implies exclusivity. This definition of
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quality promotes the elitist’s view of the high quality.
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Excellence - There are two schools of thought about this definition of quality. First of
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all it relates to high standards and secondly it describes the ‘zero defects’. Here,
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‘excellence’ is similar to the ‘traditional’ definition and identifies the component of

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excellence which is also unattainable. It is also an elitist concept and sees quality to be
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only attainable in limited circumstances. The best is required in order to achieve

excellence.
3. Standards - A quality idea in this case is one that has passed a set of quality checks,
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where the checks are based on certain criteria in order to eliminate defective items.
Here quality is measured by the items which fulfill the minimum standards prescribed
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by the producer and can be described as ‘conformance to standards’.

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b. Perfection or consistency
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Perfection definition concentrates on process and with the help of proper specification it
transforms the ‘traditional’ idea of quality into something which can be achieved by
everybody. It can also be redefined in terms of conformance to specification rather than high
standards. However, one must realize that there is a difference between quality and standard
because quality here simply conforms to a certain specification and the specification in general
cannot be expressed as a standard. Under this definition, conformance to specification takes
the role of achieving benchmark standard. Here the complete perfection means making sure
that everything is perfect and there are no defects. Furthermore, no defects or zero defects
demands that the perfection of product or services is delivered consistently. Therefore the idea
of reliability in terms of ‘exceptional’ becomes the perfection view of quality.
Here, quality is one which conforms exactly to specification and whose output is free of
defects at all times. Further, perfection here is not only the conformance to specification, it
also acts as a philosophy of prevention. The idea is to make sure that a fault does not occur in
the various stages of the process that is helping to create a quality culture.

For an organization, a quality culture is one in which everybody is responsible for quality
improvement. With the help of this quality culture each organization develops a system of
interrelated ‘teams’ which provide inputs and outputs. Hence the team plays a dual role (i.e. a
customer and a supplier) and takes the responsibility of ensuring that its output matches the
required input. So the idea of perfection as a definition of quality suggests that it has a
philosophy of prevention which is an essential part of quality culture. Here the definition of
quality focuses on everybody’s involvements in quality improvement for achieving quality
goals at each stage of the process.
c. Fitness for purpose
This definition focuses on the relationship between the purpose of the product or services
and its quality. It examines each in terms of the product or services in order to compare
whether it fits its purpose. This definition is a functional one and is different from the earlier
‘exceptional’ definition.
Here, fitness of purpose is used in order to propagate and measure the perfection. If it does
not fit its purpose then this definition of quality may run a risk of being totally useless.
d. Value for money
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Under this definition quality is described as the price you can afford to pay for your
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requirements at a reasonable cost, which means quality is compared with the level of
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specification and is directly related to cost. However, it ignores the effect of competitiveness
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which is based on the assumptions of quality improvement. Here quality is equated with value
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for money and is assessed against such criteria as standards and reliability. The value for
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money definition therefore suggests the idea of accountability (e.g. public services are
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accountable to the Government). In general, market forces and competition help to develop the
links between the value for money and quality.
e. Transformative
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The transformative view of quality is rooted in the notion of ‘qualitative change’, a

fundamental change of form. Ice is transformed into water and eventually steam if it
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experiences an increase of temperature. Whilst the increase in temperature can be measured

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the transformation involves a qualitative change.

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Quality philosophy reflects various perspectives of individuals, groups of people and society.
In a modern business world people are allowed to hold various views regarding quality which
of course can change with time and situations. Many people, instead of getting involved with
different definitions of quality, have developed some underlying principles and concepts of
Total Quality Management. In general we will follow the definition of TQM by Kanji (1990).
According to him ‘TQM is the way of life of an organization committed to customer
satisfaction through continuous improvement. This way of life varies from organization to
organization and from one country to another but has certain essential principles which can be
implemented to secure greater market share, increase profits and reduce cost’.
1.2 Deming's Contribution and Principles
William Edwards Deming (1900 – 1993) was an American statistician. William
Edwards Deming was a famous quality management guru who strived for continuous
improvement of organizations.

Deming has made 3 main contributions to the field:
• The Fourteen Points for transformation of an organization.
• The Deadly Diseases of organizations.
• The System of Profound Knowledge.
1.2.1 Deming’s 14 points for Management
Deming’s 14 points for Management were first presented in his book Out of the Crisis.
Deming’s management philosophy is summarised by 14 principles required for the
transformation of traditional management of any type of organisation. Many of these
management principles are philosophical in nature, and some are more programmatic.
1. Create Constancy of Purpose - Strive for constant improvement in products and services,
with the aim of becoming competitive and ensuring consistency in the way business is
done, which will ensure retention of employment. Do not just make adjustments at the end
of the production process, but evaluate if improvements are necessary during the process
and get started immediately.
2. Adopt the New Philosophy - Adopting new methods and ways for improving quality. A
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new (economic) time offers new chances and challenges, and management must take
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responsibility for being open to such changes. Without change, a company cannot sustain
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itself in a time when innovation occurs every day.
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3. Cease Dependence on Mass Inspection - The use of inspection to improve quality is
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costly and ineffective and unreliable. End the dependence on inspections and final checks
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to ensure quality. It is better to that quality checks take place during the process so that
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improvements can be made earlier. This section links back to the first point, which
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promotes the importance of interim improvements.

4. Cease Award of Business on Price Tag Alone - Move towards a single supplier for any
one item. Stop doing business and negotiate with suppliers based on the lowest price. It is
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worthwhile in the long term to build a good and long-standing relationship with suppliers,
which fosters trust and increases loyalty. An organisation should be able to rely on their
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suppliers; they supply the parts for the production line and are the first link to a high
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quality product.
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5. Improve Constantly and Forever the System of Production and Service: The point guides
that it is duty of management to find and remove quality continually on the system;
Continuous process improvement of production and service results in improved quality
and productivity, which in turn leads to cost reduction. This part also relates to the first and
third points. Improved quality leads to less waste of other raw materials, which
subsequently has a cost-effective effect.
6. Institute Training - The intention of point is to upgrade every employee that could be
equipped by enough knowledge and skills. Training and development of employees is
necessary for the survival of an organisation. By integrating it into the organisation, it will
be considered as normal for the employees, as part of their Personal Development Plan.
7. Adopt and Institute Leadership - Management should lead not supervise. Leadership
needs to be stimulated. By leading and supervising, managers are able to help employees
and make machines work better.

8. Drive Out Fear - Fear is paralysing. Therefore, fear must be eliminated on the work floor
so that everyone can work effectively for the company, feel safe and take risks. The staffs
must have enough relaxation and motivation to do their works effectively. Transparent
communication, motivation, respect and interest in each other and each other’s work can
contribute to this.
9. Break Down Barriers Between Departments - The point is intended for the importance of
teamwork. By eliminating the boundaries between departments, cooperation can be better
and different expert teams will understand each other better. This can be done by, for
example, the creation of multifunctional teams, each with an equal share and open to each
other’s ideas.
10. Eliminate Slogans Exhortations and Targets - Slogans, exhortations and targets aimed at
the workforce urging an increase in productivity by working harder or by making no
mistakes is a waste of time and is counter-productive. Such slogans, warnings and
exhortations are perceived as being patronising. Quality and production problems do not
arise from the individual employee, but from the system itself.
11. Eliminate Numerical Quotas for the Workforce and Numerical Goals for Management -
Numerical quotas and goals are demotivating and confusing in most applications. No more
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focus on achieving certain margins; that impedes professionals from performing their work
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well and taking the necessary time for it. Rushing through the work can cause production
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errors. Managers should therefore focus on quality rather than quantity.
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12. Remove Barriers hat Deny People Pride of Workmanship - There are many barriers
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which prevent the workforce from achieving pride in their work; poor quality of incoming
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materials, inadequate work instructions so that people do not understand the standard of
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work required, ill-maintained machines from which is demanded maximum output

regardless of quality achieved, supervisors who do not understand the work and who are
unable to assist the workforce, defect reports and suggestion schemes which are ignored by
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management etc. Employees feel more satisfaction when they get a chance to execute their
work well and professionally, without feeling the pressure of deadlines.
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13. Institute a Vigorous Programme of Education and Self-Improvement - Integrate and

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promote training, self-development and improvement for each employee. This directly
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connects to the sixth point. By encouraging employees to work for themselves and to see
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their studies and training as a self-evident part of their jobs, they are able to elevate
themselves to a higher level.
14. Take Action to Accomplish he Transformation - Transformation is the work of everyone.
Management must take action to understand the preceding 13 points and decide on the
direction to take the company for the future.Management must have the courage to forego
traditional styles of management and adopt the new philosophy. It will be necessary to
explain by various means that the process of continuous improvement involves everybody,
and that this is not just a passing initiative like those which have gone before. Each activity
in a company is part of a process and all of the processes combine to provide the product
or service to the final customer. Each constituent process can and should be the subject of
continuous improvement working in harmony with the next stage and preceding stage to
achieve a quality of output that will delight the ultimate customer.

Deming’s 14 principles outlined above constitute what he considers to be good
management practice, the adoption of which would transform the company or industry
concerned.
1.2.2 Deadly diseases of management
In addition to the 14 points points for management, Deming set out the seven ‘Deadly
Diseases’ which described the main barriers faced by management in improving effectiveness
and continual improvement.
1. Lack of Constancy of Purpose - To plan a product or service that will have a market and
keep the company in business and create more jobs. It is far better to adopt continuous
improvement of all processes to produce a result that will bring customers back time after
time than to work for the next dividend to shareholders.
2. Emphasis on Short-Term Profits - Is fed by corporate fear of unfriendly take-over and
pressure from lending institutions and shareholders for a quick payback. Most Western
companies are driven by the need to make money; the truly successful companies in the
world have adopted a rather different approach -become world class in what it does and
subsequently enjoy the long term improvement in market share and profitability that
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follows.
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3. Evaluation of Performance – Annual Review:Pushes people toward self-interest because
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the assessment focuses on the end result not on leadership applied to help people improve
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their processes. A merit rating system rewards people who do well within the system and,
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therefore, it discourages people to improve the system. “Don’t make waves” or “Don’t
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rock the boat” are typical sayings that mean that if the individual values his “career” he
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will not do anything that jeopardises his annual rating. Both the organisation and the
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individual is the loser - neither has realised their full potential.

Managers spend much of their time managing or combating crisis - this is highly
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visible work which merits a good annual rating. On the other hand, the manager who
quietly plans and achieves the requirements through a right first time approach is invisible
- he just does his job. Although it sounds cynical, the manager who does not get it right
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first time but does an excellent job of ire-fighting is frequently better thought of because of
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the very visibility that crisis management provides.

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4. Mobility of Management - It has become common practice for management to move from
one position to another in different companies because this is good experience and hence
good for the career of the individual. This may be the case, but for the organisation it is
disastrous. How can a company have constancy of purpose when its management are
forever changing?
5. Running the Company on Visible Figures Alone - A company cannot be successful on

visible figures alone and whilst visible figures are important for practical reasons of
everyday finance, the most important figures are either not easy or impossible to quantify.
For example, a happy customer will buy again and advertise his delight with the product;
conversely, a dissatisfied customer will make known the problems that he has suffered and
dissuade others people from buying the same product. Better morale resulting from quality
improvement and increased ‘pride in work’ will result in more effort and attention to
detail, improving both quality and productivity.

6. High medical costs

7. High costs of liability Systems
Deming said that effective management and a thinking
commitment to quality were needed to combat

these seven deadly diseases. He emphasised the
importance of communicating quality messages to
all staff and building a belief in total quality
management. Theory of
knowledge
1.2.3 System of profound knowledge (SOPK)
Deming has described his thinking on the
management of organizations in the System of Psychology Variation
Profound Knowledge. This is, perhaps, the least

well known of his contributions, but (as the name
implies) the most profound. The approach (an System of profound knowledge (SOPK)
adapted model of which is shown in figure)
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combines systems thinking with an understanding of statistical analysis, a people focus and a
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learning approach based on the knowledge generated from the other elements.
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1. Appreciation of a system – This includes understanding the overall processes involving
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suppliers, producers, and customers (or recipients) of goods and services. Everyone must
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share a distinct understanding and commitment to the aim or purpose of the system.
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Appreciation of a system depends on quality leaders’ understanding the interconnectedness

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and interdependence the interconnectedness must be clearly defined and documented for
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successful flow or continuous improvement of the process. A flow chart can be used to
clearly illustrate the components of a system and their interconnectedness. It can serve as
an organizational diagram. Each person must understand their job, know how to do it well,
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and understand the interdependent role he/she plays with the rest of the system. Using flow
charts, people can see how each person’s is interrelated to accomplish the organizational
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aim for the good of all.

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2. Variation - No two things are exactly alike, not people, not processes. Variation is a
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natural, inevitable part of life. The goal of quality or continuous improvement is to reduce
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the range of variation over time, in addition to adjusting the process level to the desired
level. Almost all variation within a process is due to chance causes, inherent in the design
of the process. Management controls the design of the process. People within the system
are limited by that design.
3. Psychology - People are a very important part of the system. The application of Profound
Knowledge will lead to the transformation of management and thereby enable the
leader/manager to transform his organization into a system. However, Deming claimed
that today's management style itself is in a stable state. For the leader/manager to
transform management and subsequently his or her organization, he or she must have
learned "the psychology of individuals, the psychology of a group, the psychology of
society, and the psychology of change". The leader/manager must be aware that everyone
differs from one another, identify these differences, and use them for optimizing
everyone's talents and preferences.

4. Theory of Knowledge - The theory of knowledge, as stated here, implies that system
improvement depends on continuous study of the organization. Improvement is learning
and developing new knowledge about the system. The learning process requires several
steps: 1) forming a theory, 2) making predictions based on past experiences, 3) testing the
theory, 4) checking the results. Building knowledge through systematic analysis of short-
term/long term results and revision and extension to the theory provides the learning
process. This can be related to the Shewhart Cycle: Plan-Do-Check-Act.
It is the integrative nature of the model that is most important to consider at this stage.
Deming’s point was that piecemeal consideration of these issues would be likely to lead to
sub-optimal outcomes and an undue focus in one area.
1.2.4 The Deming (PDCA) Cycle
In emphasizing the importance of continuous improvement, Deming suggested a
procedure to assist in the establishment and long-term existence of a quality organization, a
cycle which he called the Deming Cycle, which consists of four stages as follows.
1. PLAN: The process of improvement should be carefully planned for the steps of actions to
be taken.
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2. DO: Putting the plan into effect. Act Plan
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3. CHECK: Collection of data to quantify the outcome of the
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action taken in Do Stage, analysis of results, feedback and
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review.
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4. ACT: Institutionalization of process improvement requires Do

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more that just selecting a strategy. Check

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1.3 Juran's Contribution and Principles PDCA Cycle
Dr. Joseph M. Juran has had the most influence on the theory of quality management
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after Deming among other gurus. His emphasis was more on managerial aspect in quality.
Juran is best known as “the father of modern quality management”, and the publication of his
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book “Quality Control Handbook” for first time in 1951 is regarded as the Bible of quality, has
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been revised several times and continues to be a popular reference.

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Juran defines quality as fitness for use in terms of design, conformance, availability, safety,
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and field use. Thus, his concept more closely incorporates the viewpoint of customer. He is
prepared to measure everything and relies on systems and problem-solving techniques. Unlike
Deming, he focuses on top-down management and technical methods rather than worker pride
and satisfaction. Juran’s contributions can be studied under the following five topics viz;
(i)Internal customer; (ii) Cost of quality; (iii) Quality trilogy; (iv) Juran’s 10 steps for quality
improvement, and (v) the breakthrough concept.
1. 3.1 Internal Customer
Juran realized that the customer was not just the end customer and that each person
along the chain has an internal customer. Each person along the chain, from product designer
to final user, is a supplier and a customer.

1.3.2. Cost of Quality:

Juran classified the cost of quality into three classes as:
i Failure costs: Scrap, rework, corrective actions, warranty claims, customer complaint,
and loss of customer.
ii Appraisal costs: Inspection, compliance auditing and investigations.
iii Prevention costs: Training, preventive auditing, and process improvement
implementation.
1.3.3 Juran’s Quality Trilogy:
Juran views quality as fitness – for –
use. He also believes that roughly 80% of
Quality planning
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quality defects are management controllable.
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Thus management has the responsibility to
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correct this deficiency. He divides quality
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i. Quality planning - In the planning stage, it

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Quality control
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is critical to define who the customers are

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and find out their needs. After knowing

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what the customers need, you’re able to

define the requirements for your
product/process/service/system, etc., and
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develop it. Additionally, any plans that might need to be transferred to operators or other
key stakeholders should be done during the planning phase. Planning activities should be
done with a multidisciplinary team, with all key stakeholders represented.
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ii. Quality control - During the control phase, determine what you need to measure (what data
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do you need to know if your process is working?), and set a goal for your performance. Get
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feedback by measuring actual performance, and act on the gap between your performance
and your goal. In Statistical Process Control (SPC), there are several tools that could be
used in the “control” phase of the Juran Trilogy: Pareto Analysis, flow diagrams, fishbone
diagram, and control charts, to name a few.
iii. Quality improvement - It is a continuous pursuit toward perfection. Management analyses
processes and systems and reports back with praise and recognition when things are done
right. There are four different “strategies” to improvement that could be applied during this
phase:
a. Repair: Reactive; fix what’s broken.
b. Refinement: Proactive; continually improve a process that isn’t broken
c. Renovation: Improvement through innovation or technological advancement
d. Reinvention: Most demanding approach; start over with a clean slate.

Juran's Trilogy” is summarized and illustrated in Table below.

Quality planning Quality control Quality improvement
• Establish quality goals. • Evaluate actual • Prove the need.
• Identify who the performance. • Establish the
customers are. • Compare actual infrastructure.
• Determine the needs of performance with quality • Identify the improvement
the customers. goals. projects.
• Develop product features • Act on the difference. • Establish project teams.
that respond to customers' • Provide the teams with
needs. resources, training, and
• Develop processes able to motivation to:
produce the product - Diagnose the causes,
features. and;
• Establish process controls; - Stimulate remedies.
transfer the plans to the • Establish controls to hold
process. the gains.
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1.3.4 Juran’s 10 Steps for Quality Improvement:
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He introduced “Ten Steps to Quality Improvement” for improving the satisfaction of
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customer, these steps are listed below. En
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1. Build awareness of the need and opportunity for improvement – this can be done by
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i Survey the staff, asking them why the mistakes were made;
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ii After a week, select the top ten reasons;

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iii Decide how to make sure those mistake-causing steps aren't

iv repeated;
v Keep track of the number of mistakes being made, to make sure they are decreasing.
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2. Set goals for improvement.

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i Establish specific goals to be reached.

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ii Establish plans for reaching the goals.

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iii Assign clear responsibility for meeting the goals.

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iv Base the rewards on results achieved.

3. Organize to reach the goals.
i Establish quality council
ii Identify problems
iii Select projects
iv Appoint teams
v Designate facilitators
4. Providing training - Any company, which has been actively engaged in moving towards
TQM in the past few years, knows how important education and training are. The
concepts, methods and tools for modern quality management are new for most members of
the company -- managers, professionals and workforce. The investment in education and
training is high, but the rewards are great.

5. Carry out projects to solve problems- Large improvements are usually the result of
interdepartmental or even cross-functional quality improvement teams. These teams tackle
the chronic problems that have been in the way of company progress for a long time.
These are the vital few problems that create the breakthroughs in quality by reducing waste
and improving customer satisfaction dramatically.
6. Report progress-Importance here is on the progress expected and the actual progress
achieved. Necessary actions to improve the status can be initiated to reduce the variance.
Information on the progress also provides the management the confidence on the
Improvement activity and further support if required.
7. Give recognition - Recognition is a means of providing morale to both those involved in
the improvement activity and all others in an organization. This is an important activity to
be done by the management as improvements provide a change for betterment resulting in
savings to the company and at times, the improvements are made possible against lot of
criticisms. Recognition rejuvenates the spirits and makes it possible for improvement areas
in other spheres.
8. Communicate results - Lesson learnt during the improvement process requires to be shared
to create an awareness of the approach taken and the possibility to learn and improve
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further. It also provides an outlook for people in other areas to the basis for triggering
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similar improvements in their areas.
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9. Keep score - A Company’s goals are achieved step-by-step. Each step taking it nearer to
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the targeted goals. Further steps to be taken shall involve an action based on the lesson in
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the previous steps. Tracking the progress and measuring it provides the management the
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leverage to control the process.

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10. Maintain momentum by making annual improvement part of the regular systems and
processes of the company - Actions taken in the above steps shall involve the people and
sustaining their involvement in improvement activity is a must to achieve the long-term
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organizational goals and to remain competitive. Juran approach is very many people
oriented and it places a strong emphasis upon teamwork and a project –based approach.
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1.3.5 The Breakthrough Concept:

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Breakthrough means the organized creation of beneficial change and the attainment of
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unprecedented levels of performance. According to Juran, all break through follow the same
sequence. Like the Deming cycle, Juran’s breakthrough concerns itself with the product /
service life cycle. In essence, this splits it up into two areas: the “journey from symptom to
cause” and the journey from cause to remedy”.
1.4 Crosby's Contribution and Principles
Philip Bayard Crosby is best known for his concept of “Zero Defects”, he believed that
an efficient quality management must be “based on prevention based system”, and claimed
that mistakes can be happened because of lack of knowledge and the attention of employees in
the organization. He emphasized when the quality improvement can be happened that the
management of the firm focuses more on prevention by the attention and awareness of
employees, reduction of the cost, the emphasis on controls rather than the inspection efforts,
and finally “Doing them right the first time”.

Crosby's approach to quality is unambiguous. In his view, good, bad, high and low
quality are meaningless concepts, and the meaning of quality is conformance to requirements.
Non-conforming products are ones that management has failed to specify or control. The cost
of non-conformance equals the cost of not doing it right first time, and not rooting out any
defects in processes.
Zero defects does not mean that people never make mistakes, but that companies
should not begin with allowances or sub-standard targets with mistakes as an in-built
expectation. Instead, work should be seen as a series of activities or processes, defined by clear
requirements, carried out to produce identified outcomes.
Crosby is known for his following contributions:

1. Four absolutes of quality;
2. Fourteen steps to quality management; and
3. Crosby’s quality vaccine.
1.4.1 Crosby’s Absolutes for Quality Management
According to his Zero Defects definition Crosby described his 4 absolutes that are
based on his TQM philosophy. His Absolutes for Quality Management are
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First Absolute - The definition of quality is conformance to requirements, not goodness.
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Second Absolute - The system for causing quality is preventive, not appraisal.
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Third Absolute - The performance standard must be zero defect, not “that’s close
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enough”.
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Fourth Absolute - The measurement of quality is the price of non – conformance, not
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indexes
1.4.2 Crosby’s Fourteen Steps for Quality Improvement:
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Crosby emphasized the role of management for improving quality. He believed 80%
of the quality problems of the organizations are belonged to the management. Thus, Crosby
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recommended 14 steps to lead the companies as Deming and Juran suggested some tips for
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improving quality.
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1. Establish and ensure management commitment - The need for quality improvement must
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be recognised and adopted by management, with an emphasis on the need for defect
prevention. Quality improvement is equated with profit improvement.
2. Form quality improvement teams (QITs) for quality improvement process planning and
administration - Representatives from each department or function should be brought
together to form a quality improvement team. These should be people who have sufficient
authority to commit the area they represent to action.
3. Establish quality measurements - The status of quality should be determined throughout
the company. This means establishing quality measures for each area of activity that are
recorded to show where improvement is possible, and where corrective action is
necessary. Crosby advocates delegation of this task to the people who actually do the job,
so setting the stage for defect prevention on the job, where it really counts.

4. Evaluate the cost of quality and explain its use as a management tool to measure waste -
The cost of quality is not an absolute performance measurement, but an indication of
where the action necessary to correct a defect will result in greater profitability.
5. Raise quality awareness among all employees - This involves, through training and the
provision of visible evidence of the concern for quality improvement, making employees
aware of the cost to the company of defects. Crosby stresses that this sharing process is a -
or even the - key step in his view of quality.
6. Take actions to correct problems identified through previous steps - Discussion about
problems will bring solutions to light and also raise other elements for improvement.
People need to see that problems are being resolved on a regular basis. Corrective action
should then become a habit.
7. Establish a zero defects committee and programme - Zero Defects is not a motivation
programme - its purpose is to communicate and install the notion that everyone should do
things right first time.
8. Train supervisors and managers on their role and responsibilities in the quality
improvement process- All managers should undergo formal training on the 14 steps
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before they are implemented. A manager should understand each of the 14 steps well
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enough to be able to explain them to his or her people.
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9. Hold a zero defects day to reaffirm management commitment- It is important that the
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commitment to Zero Defects as the performance standard of the company makes an

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impact, and that everyone gets the same message in the same way. Zero Defects Day,
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when supervisors explain the programme to their people, should make a lasting
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impression as a 'new attitude' day.

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10. Encourage individuals and groups to set improvement goals - Each supervisor gets his or
her people to establish specific, measurable goals to strive for. Usually, these comprise
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30-, 60-, and 90-day goals.

11. Obstacle reporting - Employees are asked to describe, on a simple, one-page form, any
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problems that prevent them from carrying out error-free work. Problems should be
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acknowledged within twenty-four hours by the function or unit to which the problem is
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addressed. This constitutes a key step in building up trust, as people will begin to grow
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more confident that their problems will be addressed and dealt with.
12. Recognize and appreciate all participants - It is important to recognise those who meet
their goals or perform outstanding acts with a prize or award, although this should not be
in financial form. The act of recognition is what is important.
13. Establish quality councils to discuss quality matters on a regular basis - The quality
professionals and team-leaders should meet regularly to discuss improvements and
upgrades to the quality programme.
14. Do it all over again to demonstrate that the improvement process never ends - During the
course of a typical programme, lasting from 12 to18 months, turnover and change will
dissipate much of the educational process.It is important to set up a new team of
representatives and begin the programme over again, starting with Zero Defects day. This
'starting over again' helps quality to become ingrained in the organisation.

1.4.3 Crosby’s quality vaccine
In the Crosby style, the “Vaccine” is explained as medicine for management to prevent
poor quality. It is in five sections that cover the requirements of Total Quality Management.
1. Integrity - Treat quality seriously throughout the whole business organization from top
to bottom. That the company’s future will be judged on its performance on quality.
2. Systems - Appropriate measures and systems should be put in place for quality costs,
education, quality, performance, review, improvement and customer satisfaction.
3. Communication - The communication systems are of paramount importance to
communicate requirements and specifications and improvement opportunities around
the organization. Customers and operators know what needs to be put in place to
improve and listening to them will give you the edge.
4. Operations- Work with and develop suppliers. Processes should be capable and
improvement culture should be the norm.
5. Policies - Policies must be clear and consistent throughout the business.
1.5 Seven statistical tools
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The seven basic tools of quality are graphical techniques identified as being most
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helpful in troubleshooting issues related to quality. They are called basic because they are
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suitable for people with little formal training in statistics and because they can be used to solve
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the vast majority of quality-related issues.

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SL. No. Name of tool Purpose Remarks

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Represents the sequential

flow of process thereby
1. Flow diagram or Flow chart Data collection
helping to know what to
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measure and control.

Used to record the
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2. Check sheet Data collection frequency of occurrence

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of a specific event.
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Graphical representation
3. Chart Data presentation
of collected data.
4. Histogram Data presentation
of collected data.
5. Scatter diagram Data presentation
of collected data.
6. Pareto diagram Data presentation
of collected data.
used to indicate and
7. Cause and effect diagram Data analysis
identify the possible
cause and effect.

1.5.1 Check sheet
Check sheet is a format designed to collect data efficiently. Check sheet enables easy
collection and analysis of data. Check sheet is a simple data collection form consisting of
multiple categories with definitions. Data are entered on the form with a simple tally mark
each time one of the categories occurs. Check sheets are sometimes called data collection
sheets. They also get called tally charts, although as 'tally' means 'to count'. Purpose of a
check sheet is to facilitate the collection and analysis of data.
Telephone Interruptions
Day
Reason
Monday Tuesday Wednesday Thursday Friday Total
Wrong number 20
Info request 10
Boss 19
Total 12 6 10 8 13 49
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A check sheet is a simple means of data collection. The most straightforward check
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sheet is simply to make a list of items that you expect will appear in a process and to mark a
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check beside each item when it does appear. This type of data collection can be used for
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almost anything, from checking off the occurrence of particular types of defects to the
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counting of expected items (e.g., the number of times the telephone rings before being
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answered). The figure above shows a check sheet used to collect data on telephone
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interruptions. The tick marks were added as data was collected over several weeks. Steps in
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constructing check sheet are :-

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1. Clearly define the objective of the data collection.

2. Determine other information about the source of the data that should be recorded, such as
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shift, date, or machine.

3. Determine and define all categories of data to be collected.
4. Determine the time period for data collection and who will collect the data.
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5. Determine how instructions will be given to those involved in data collection.

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6. Design a check sheet by listing categories to be counted.

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7. Plot the check sheet.

8. Modify the check sheet based on results of the plot.
Benefits of check sheet :
1. Collects data with minimal effort.
2. Convert raw data into useful information.
1.5.2 Bar chart
A bar chart or bar graph is a chart with rectangular bars with lengths proportional to
the values that they represent. The bars can be plotted vertically or horizontally. Bar charts are
used for plotting discrete (or 'discontinuous') data i.e. data which has discrete values and is not
continuous. Bar chart is used for comparing classes/groups of data. Bar chart plots the number
of times a particular value/category occurs in a data set. For example, the bar chart in the
figure above plots the number of people, in millions, belonging to different countries ailing
from a certain disease.

Advantages :
1. Summarize a large data set in visual form.
2. Bar charts helps clarify trends.
3. Bar charts help to estimate key values at a glance.
4. Bar charts can be easily understood.
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60
50
40
30
20
10
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America Japan China Germany England France Italy Greece
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Disadvantages : En
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1. Require additional explanation
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2. Data can be easily manipulated to yield false impressions.

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3. Fail to reveal key assumptions, causes, effects, or patterns.

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1.5.3 Histogram
A histogram is a graphical way of presenting a frequency distribution. Histograms
provide a simple, graphical view of accumulated data, including its dispersion and central
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tendency. Histograms provide the easiest way to evaluate the distribution data.
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A histogram is a specialized type of bar chart. Histogram is a graph showing the

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number of data points falling in various ranges. Histogram is prepared by segmenting the data
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into equal sized groups. The groups of the data are called ‘classes’ and in the context of
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histogram, they are known as ‘Bins’ because they act as containers that accumulate data.
Consider the exam scores of a group of students. Number of students falling in an interval of
10 marks is tabulated in the frequency table below. To construct histogram groups or bins are
plotted in the x-axis and the frequencies in the y-axis. High bars indicate more points in a class
and low bars indicate fewer points. If too few or too many bars are used, the histogram can be
misleading. Shape of the histogram is sensitive to the number of bins. If the bins are too wide,
important information might get omitted. Steps in constructing a histogram are:
1. Decide the characteristic and description.
2. Collect the data on the characteristic with respect to the description.
3. Draw bars corresponding to the description.
4. Shade the bars for easy and quick interpretation.
Number of students falling in between different of range of marks scored in a subject is
given in the table below. A histogram is prepared based on this data :

Group Count
0-9 1
10-19 2
20-29 3
30-39 4
40-49 5
50-59 4
60-69 3
70-79 2
80-89 2
90-99 1
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0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99
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Comparison between bar chart and histograms :

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Bar Charts Histograms

All the bars are the same width. The columns may have different widths.
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The quantity on the vertical axis is frequency

Only one axis has a scale. density (or frequency per class of a given
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size).
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The height or length of the bar indicates the

The horizontal axis must have a scale.
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frequency.
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Types of histogram :
There are five types of histograms based on five times of distributions. Each
distribution type indicates a different type of behavior. The various types of distributions are:
1. Bell-shaped distribution : This is the normal pattern in which the histogram is

symmetrical.
2. Skewed distribution : In this type right or left side tail is longer.
3. Plateau distribution : Suggests that there is no clear pattern or process (not shown).
4. Double-peaked distribution : Suggests that there are two distributions.

Skewness in histogram
Skewness is the indication whether the process is balanced or not. If the histogram is
symmetrical or proportional, then skewness is zero. If the left hand tail is longer, skewness will
be negative. If the right hand tail is longer, skewness will be positive. Existence of skewness
shows variation in the process. When specification limits are placed on a histogram, we can
estimate how many items are being produced which do not meet specifications. This gives you
an idea of batch performance, that is, of how the process performed during the period that you
collected data. If the histogram shows that your process is wider than the specification limits,
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then it is not presently capable of meeting your specifications. This means the variation of the
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process should be reduced.
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1.5.4 Pareto charts or Pareto diagram En
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Vilfredo Pareto, a Italian economist, studied the distributions of wealth in different

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countries, concluding that minority about 20% of people controlled the society's wealth (about
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80%). This same distribution has been observed in other areas and has been termed the Pareto
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effect. The Pareto effect is used as a tool in quality improvement. It has been observed that
80% of problems are caused due to 20% of the causes. Pareto charts are used to display the
few vital factors that are causing most of the problems. Concentrating on the major problems
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can eliminate the majority of problems. The improvement efforts on these few will have a
greater impact and be more cost-effective. The purpose of the pareto chart is to highlight the
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most important among a (typically large) set of factors. The pareto diagram visually indicates
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which problem should be solved first. Steps in constructing pareto diagram are:
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1. Fix a time frame for the analysis.

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2. Create the list of categories under consideration. Tally the occurrences of each category.
Use a check sheet if necessary for recording the data. Then add these amounts to
determine the grand total for category.
3. Determine the percentage of grand total of each category (divide grand total of each
category by the grand total of all categories and multiply it with 100 to obtain percentage
of grand total of each category. .
4. Determine the cumulative percent of each category, (the sum of each category plus all
categories that precede it in the rank order, divided by the grand total and multiplied by
100.)
5. Re-order the categories being compared placing the one with the largest count first.
6. Draw the horizontal axis with the categories.
7. Draw and label the left vertical axis with the percentage of grand total of each category.
8. Draw the right vertical axis with the cumulative percentages (the cumulative total should
be equal 100 %).

9. Construct the vertical bar diagram beginning on the left with the highest percentage
classification and progressing to the lowest and ending with other. The height of each bar
should correspond with the value or number of occurrences on the left axis and the
percentage of the total on the right axis. The width of the bars should be the same. Label
the bars.
10. Plot the line graph showing the cumulative percentage.
11. Analyze the chart.
Following table lists the count of defects categorized under various causes in a casting process.
Defect Count/Frequency Percentage Cumulative percentage
Mismatch 67 46.5 46.5
Drop 24 16.7 63.2
Scab 17 11.8 75.0
Hot tear 10 6.9 81.9
Misrun 10 6.9 88.9
Inclusions 8 5.6 94.4
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Warpage 6 4.2 98.6
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Crush 2 1.4 100
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Total 144 100 -
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Pareto diagram for the above data is shown below.

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50 120
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Cummulative Percentage
98.6 100
35 94.4
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88.9 80
30 81.9
Percentage
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10
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Mismatch Drop Scab Hot tear Misrun Inclusions Warpage Crush
Defects
It can be seen from the diagram that to lower the amount of defects by 80%, it is
sufficient to solve the first four issues.
Advantages :
1. Summarize a large data set in visual form.
2. Bar charts helps clarify trends.
3. Bar charts help to estimate key values at a glance.
4. Bar charts can be easily understood.

Disadvantages :
1. Require additional explanation.
2. Data can be easily manipulated to yield false impressions.
3. Fail to reveal key assumptions, causes, effects, or patterns.
1.5.5 Brainstorming
Brainstorming is a process for generating creative ideas and solutions through
intensive and unrestrictive group discussion. Every participant is encouraged to think aloud
and suggest as many ideas as possible. Brainstorming is a great way to gather people together
to help throw out some great ideas to help find new ways of solving problems. Brainstorming
with a group of people is a powerful technique. Brainstorming creates new ideas, solves
problems, motivates and develops teams. Brainstorming motivates because it involves
members of a team in bigger management issues, and it gets a team working together.
However, brainstorming is not simply a random activity.
Brainstorming needs to be structured and it follows brainstorming rules. It is a
technique that can be used in almost any situation where solutions to a problem and new ideas
are required and can be used with a small or large group of people. Brainstorming is a
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relatively simple and cheap way of generating ideas. Use of brainstorming can bring excellent
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results in improving the organization, performance, and developing the team. Interactive
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brainstorming is both verbal and written and can also be combined to take advantage of the
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Brainstorming process consists of :

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1. Define and agree the objective.

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2. Brainstorm ideas and suggestions having agreed a time limit.

3. Categorize/condense/combine/refine.
4. Assess/analyze effects or results.
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5. Priorities options/rank list as appropriate.

6. Agree action and timescale.
7. Control and monitor follow-up.
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Advantages of brainstorming :
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1. It encourages creativity.
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2. Everyone equally involved.

3. Ideas grow quickly, by allowing everyone to offer any ideas that come to mind
4. Improvements in productivity
Disadvantages of brainstorming :
1. It is difficult to judge whether all the ideas has come out in a brainstorming session.
2. Brainstorming session can lead to criticisms of participants.
1.5.6 Cause and effect diagram
Cause and effect diagram is a graphic tool that helps identify, sort, and display
possible causes of a problem or quality characteristic. Cause and effect diagram was developed
by Ishikawa in 1943, and hence it is also called as Ishikawa diagram. Cause and effect
diagram is also called as Fishbone diagram because of its shape.

Cause and effect diagrams can also be drawn as tree diagrams, resembling a tree
turned on its side. The cause and effect diagram is used to explore all the potential or real
causes (or inputs) that result in a single effect (or output). This can help to search for root
causes, identify areas where there may be problems, and compare the relative importance of
different causes.
Cause & effect diagram consists of box listing the outcome or effect(indicated by the
box on the right side) and branches extend that represent major categories of inputs or causes
that create that single outcome(indicated in the boxes on either side of the line). For each main
branch, there will be sub-branches indicating the cause(indicated by small arrows). It is used
too analyze the cause of any quality problem and identify the factors leading to better results.
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Benefits of using cause and effect diagram :

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1. Helps determine root causes

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2. Uses an orderly, easy-to-read format

3. Indicates possible causes of variation
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4. Identifies areas for collecting data
Steps in constructing cause and effect diagram :

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1. Draw a horizontal arrow to the right, write the effect, and draw a box around it.
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2. Identify the main causes contributing to the effect.

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3. Draw boxes around the main categories and connect the boxes to the horizontal arrow with
diagonal arrows to form the fishbone.
4. For each branch, identify specific factors which may be the causes of the effect.
5. Add increasingly detailed levels of causes.
6. Analyze the diagram and circle causes that you can take action on.
Causes in a cause & effect diagram are usually arranged into four major categories. An
example of cause and effect diagram is shown below. Categories often used are :-
1. 3Ms and P - Methods, Materials, Machinery, and People (for manufacturing industry).
2. 4Ps - Policies, Procedures, People, and Plant (recommended for administration and
service).

1.6 Cost of quality

The "cost of quality" isn't the price of creating a quality product or service. It's the
cost of NOT creating a quality product or service. Every time work is redone, the cost of
quality increases. The costs of quality are the cost associated with the prevention, discovery,
and resolving of defects in parts. These costs can arise whether the product in the design
stages, manufacturing plant, or in the customer's hand. It is important to identify the cost of
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quality so that the expenses associated with producing a quality product can be determined.
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Joseph Juran divided the costs of quality into four categories as illustrated in the figure.
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1. Cost of prevention : It consists of the costs associated with personnel engaged in

designing, implementing, and maintaining the quality system. These costs are incurred to
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keep failure and appraisal costs to a minimum. Maintaining the quality system includes
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auditing the system. Cost of prevention includes:

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a) Cost of quality planning: It includes the costs associated with creating an overall
quality plan, the cost of market research and product development, inspection plan,
reliability etc.
b) Cost of documenting: It also includes cost of preparation of manuals and procedures
needed to communicate these plan to all concerned.
c) Process control cost: It is the cost associated with implementing the quality plans and
procedures to achieve fitness for use.
d) Cost of training: It consists of costs preparing training programs for attaining,
maintaining and improving quality performance.
e) Costs associated with preventing recurring defects: Engineering, technical and
supervisory costs of preventing re-occurring defects.
f) Costs of investigation, analysis, and correction of causes of defects.
g) Cost of cost consciousness programmes.

2. Cost of appraisal : The costs associated with the measuring, evaluating or auditing of
products, components and purchased materials to assure conformance with the quality
standards and performance requirements are called cost of appraisal. In other words the
costs of evaluating quality, and of identifying and segregating non-conforming parts and
assemblies. This consists of the costs of:
a) Inspection and test material.
b) Checking labour.
c) Set up for inspection and test.
d) Maintenance and calibration of test and inspection equipment.
e) Quality audits.
f) Review of test and inspection data.
g) Evaluation of field stock and spare parts.
3. Cost of internal failures : The costs associated with defective products, components, and
materials that fail to meet quality requirements and results in manufacturing losses are
called as costs of internal failures. This includes:
a) Cost associated with scrap, i.e., costs of material labour and burden of non-usable
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parts.
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b) Cost of rework and repair i.e., the cost of making defective and assemblies good.
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c) Cost of re-inspection and retest after the defective parts are repaired.
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d) Cost of deposition i.e., the cost associated with the efforts required to determine
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whether non-conforming products are usable for some other work and make final
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disposal.
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4. Cost of external failures : It consists of the costs which are generated because of defective
products being shipped to customers. This includes:
a) Cost processing complaints from customers.
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b) Cost of service to customers who receive defective items.

c) Cost of inspecting and repairing the defective items returned by the customers.
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d) Cost of replacing the defective materials or products.

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e) Cost of concessions made to customers for accepting substandard products.

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1.6.1 Cost of Poor Quality (COPQ)

Cost of poor quality (COPQ) is defined as the costs associated with providing poor
quality products or services. There are four categories:
Internal failure costs are costs associated with defects found before the customer receives the
product or service.
External failure costs are costs associated with defects found after the customer receives the
product or service.
Appraisal costs are costs incurred to determine the degree of conformance to quality
requirements.
Prevention costs are costs incurred to keep failure and appraisal costs to a minimum.
Quality-related activities that incur costs may be divided into prevention costs,
appraisal costs, and internal and external failure costs.

1.6.2 Goal of Quality Cost System

The goal of any quality cost system is to reduce quality costs to the lowest practical
level. Juran and Gryna (1988) present these costs graphically as shown in Fig. 8.3. In the
figure it can be seen that the cost of failure declines as conformance quality levels improve
toward perfection, while the cost of appraisal plus prevention increases. There is some
“optimum” target quality level where the sum of prevention, appraisal, and failure costs is at a
minimum. Efforts to improve quality to better than the optimum level will result in increasing
the total quality costs.
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Juran acknowledged that in many cases the classical model of optimum quality costs is flawed.
It is common to find that quality levels can be economically improved to literal perfection. For
example, millions of stampings may be produced virtually error free from a well-designed and
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well-constructed stamping die. The classical model created a mind-set that perfection was not
cost effective. The new model of optimum quality cost incorporates the possibility of zero
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defects and is shown in Fig. 8.4.

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Total quality costs
Failure cost
Cost of appraisal
plus prevention
Quality of conformance 100

New model of optimum quality costs.

Benefits of using quality costing

1. Greater accuracy in the evaluation and forecasting of resource use
2. Justification for investment in the prevention and appraisal of failures
3. Ability to cost and compare performance across all departments functions and activities
4. Identification and prioritization of activities, processes and departments in terms of
corrective action, investment, or quality improvement initiatives
5. Ability to set cost-reduction targets and then to measure and report progress
6. Ability to produce “local” data which improves understanding of resource utilization
objectives and targets at all levels throughout the company
7. Provision of data to support formal quality management system (including, especially;
those based upon the ISO9000)
8. Enable decisions about quality to be made in an objective and systematic manner
9. Promoting TQM and a company-wide quality improvement culture
1.7 Taguchi Loss Function
Taguchi Loss Function is a statistical method developed by Genichi Taguchi, a
Japanese business statistician that shows how manufacture of each non-perfect part results in a
loss for the company. This concept is a landmark in describing quality and has helped spread
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the concept of continuous improvement, and finds relevance in lean manufacturing and Six
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Sigma.
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scrap of items manufactured outside specification. Taguchi considered such private costs to the
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manufacturers as short-term costs, and introduced a new approach of understanding costs to

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society owing to non-conformance with specifications. He held that any item not manufactured
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to the exact specification results in some loss to the customer or the wider community. Such
losses come with the customer needing to make an additional purchase or repairs due to early
wear-out or the defect part not interfacing with other parts, and non-optimal utilization of the
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product owing to the need to build in safety margins and the like
Most manufacturers ignore the social costs of poor quality, oblivious to the fact that
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such social losses are actually long term costs for them, for it finds their way back to the
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manufacturer as negative feedback and reduced sales. Manufacturers looking to enhance brand
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reputation, gain market share and generate profits thereby need to eliminate such social costs
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by improving product quality.

Taguchi’s loss function explains that quality does not suddenly plummet and private
and social costs do not rise suddenly when products are not in conformance to specifications.
Instead, the losses to the manufacturer and the society are a function of the deviance or
variability from the target value or best quality level. The private and social loss is zero at the
target value, and the losses gradually increase as the product specifications deviate from the
target value.
A real life example of the Taguchi Loss Function would be the quality of food
compared to expiration dates.
While purchasing orange from a supermarket, there is a certain date that is ideal to eat
it. That would be the target date. There will also be limits for when to eat the orange (within
three days of the target date, Day 2 to Day 8).

In this example, Day 5 represents the target date to eat the orange. That is when the orange will
taste the best. If purchasing the orange on Day 1, and eating the orange on the same day, the
customer will be very dissatisfied, as it is not ready to eat. This would fall below the lower
limit. On Day 3 it would be acceptable to eat, but still dissatisfied because it doesn’t taste as
good as eating on the target date. On Day 5, the customer will be satisfied, because it is eaten
on the ideal date.
If the customer is eating on Day 7, he will be slightly dissatisfied, because it is one day
past the ideal date, but it will still be within the limits provided by the supermarket. On Day 9,
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the customer will be very dissatisfied, as it will be too far past the ideal date.
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Customers get slightly dissatisfied from Day 2 through 4, and from Day 6 through 8,
even though technically it is within the limits provided by the supermarket. The least amount
of dissatisfaction occurs on the target date, and each day removed from the target date incurs
slightly more dissatisfaction.

1.7.1 Characteristics of Taguchi function
The three characteristics that shape the definition of Taguchi loss function are:
1. Nominal, where the best characteristic or target value is the median of the specified upper
and lower acceptable limits, and the losses owing to deviance from the target value rise
proportionate to the extent of deviance on either side of the mean.
2. Smaller-the-Better, where the ideal target value or best quality standard is zero, and the
higher the actual value, the higher the private and social costs.
Examples of such instances include heat loss in heat exchanger, or carbon dioxide emissions.
3. Larger-the-Better, where the ideal characteristic or best quality standard is infinity, and the
higher the actual value, the better, and the lower the actual value, the more the private and
social costs.
Examples of such instances include maximizing product yield from a process, agricultural
output, and the like. For instance, the higher yields indicate better quality seeds, and lower
yields increase the social costs.
1.7.2 Taguchi’s loss function - Formula
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Taguchi’s loss function for one piece of product is:
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Loss = Constant x ( quality characteristic − target value )2
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LossinDollars = Constant x  standard deviation 2 + ( process mean − target value ) 

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‘Constant’ is the coefficient of the Taguchi Loss, or the ratio of functional tolerance and
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customer loss. Functional tolerance is the value at which 50 percent of the customers view the
product as defective, and customer loss is the average loss to the customer at this point.
‘Quality characteristic’ indicates the actual value of the characteristic such as diameter,
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concentration or the like used as the basis to determine quality.

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‘Target value’ is the specified ideal value for this quality characteristic.
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Taguchi Loss Function uses include assessing economic loss from a deviation in
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quality without having to develop the unique function for each quality characteristic.
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1.8 Factors affecting quality :

1. Markets : Sale of a product depends, among the other things, up on the type of customers
and prices they are willing to pay.
2. Men : Men having knowledge and skills are required for producing a quality product.
3. Money : Quality costs money and therefore the full cost of achieving quality and
maintaining it should be estimated before the product goes into manufacture.
4. Management : Managements sets the company’s quality policy to provide men, materials
and money to implement the policy.
5. Materials : Choice of materials have a great impact on quality of a product.
6. Machines : Quality of products depends on the accuracy of the equipment used to
manufacture the product.
7. Methods :There should be a uniformly and well planned procedures understood by the
workers so as to develop a quality product.

Total Quality Management Module – II –30 –
Module – II
Basic concepts of Total Quality Management
Total Quality management is defined as a continuous effort by the management as
well as employees of a particular organization to ensure long term customer loyalty and
customer satisfaction. Total quality management is a structured effort by employees to
continuously improve the quality of their products and services through proper feedbacks and
research. Ensuring superior quality of a product or service is not the responsibility of a single
member.
Total Quality Management is a management approach that originated in the 1950's and
has steadily become more popular since the early 1980's. TQM is preferred method to increase
the user satisfaction. It reduces the defects of organization and increases the productivity. Total
Quality management increases customer satisfaction by boosting quality. It does this by
motivating the workforce and improving the way the company operates. In an increasingly
competitive market, firm with a continuous improvement culture and external focus are more
likely to survive and prosper. TQM is considered an important catalyst in the context.
Only by changing the actions of management will the culture and actions of an entire
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organization to be transformed. Total Quality Management is for the most part common sense.
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The words Total Quality Management stand for-
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Total - Made up of the whole;
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Quality - Degree of excellence a product or service provides;

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Management - Act, art or manner of handling, controlling, directing etc.;

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Therefore total quality management is the art of managing the whole to achieve
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excellence. The Golden Rule is a simple but effective way to explain it. It is defined as both a
philosophy and a set of guiding principles that represent the foundation of a continuously
improving organization. It is the application of quantitative methods and human resources to
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improve all the processes within an organization and exceed customer needs now and in the
future. It integrates fundamental management techniques, existing improvement efforts and
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technical tools under a disciplined approach.

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2.1 Evolution of TQM

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The concept of quality has existed for many years, though its meaning has changed
and evolved over time. In the early twentieth century, quality management meant inspecting
products to ensure that they met specifications. Later, the statistical sampling techniques were
used to evaluate quality, and quality control charts were used to monitor the production
process. After two decades, quality began to be viewed as something that encompassed the
entire organization, not only the production process. Since all functions were responsible for
product quality and all shared the costs of poor quality, quality was seen as a concept that
affected the entire organization.
The quality movement has a long and complex history, and not surprisingly its
evolution from the industrial revolution to present day has been interpreted in several different
ways. One version emphasizes four relatively distinct phases; another identifies two different
movements evolving more or less in parallel, while a third emphasizes a more continuous
development.

2.1.1 Four phase model

Perhaps the most common description of way in which quality and quality
improvements have evolved into the present day Total Quality Management (TQM) is that
which identifies the four phases or stages as illustrated in Figure below viz; Quality Inspection,
Quality control, Quality assurance and Total quality management
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Quality management started with simple inspection-based systems. Under such a

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system, one or more characteristics of a product are examined, measured or tested and
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compared with specified requirements to assess its conformity. This system is used to appraise
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incoming products, manufactured components and assemblies at appropriate points in the

production process. It is undertaken mainly by staff employed specifically for this purpose.
Products which do not conform to specification may be scrapped, reworked or sold as lower
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quality items. In some cases, inspection is used to grade the finished products. The system is
an after-the-fact screening process with no prevention content other than, perhaps, the
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identification of suppliers, operations or workers manufacturing nonconforming products.

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Simple inspection-based systems are usually wholly in-house and do not directly involve
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suppliers or customers.
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The quality inspection stage started about 1910 when the Ford Motor Company, then
one of the world’s largest manufacturers, employed teams of inspectors to check the quality of
the ‘T’ model car. The idea behind quality inspection was that poor quality products could be
found by inspection and then either scrapped, reworked or sold as lower quality products.
2 Quality Control
Under a system of quality control, product testing and documentation control became
the ways to ensure greater process control and reduced non-conformance. Typical
characteristics of such systems were performance-data collection, feedback to earlier stages in
the process, and self-inspection. While screening inspection was again the main mechanism for
preventing products which were outside the specification from being shipped to customers,
quality control measures led to greater process control and a lower incidence of non-
conformance.

By the 1920’s and 1930’s, Statistical Quality Control, developed by Walter A.
Shewhart, was being adopted by Ford and many other manufacturing companies in order to
identify problems earlier and control the manufacturing process, instead of rejecting or
repairing afterwards.
3 Quality Assurance
The quality assurance stage came with the change away from product quality towards
system quality. In this stage, an organization sets up a system for controlling what is being
done and the system is audited to ensure that it is adequate both in design and use. A major
part of this change is the use of both second-party and third-party audits to assess the
efficiency of the system. The major characteristics of this stage are the use of quality manuals,
procedures, work instructions, quality planning, quality audits, etc. The fundamental difference
is that quality assurance is prevention-based while quality control is inspection-based.
The Quality Assurance stage focuses on pre-production activities and relies on quality
standards suggested by organisations like ISO 9000 or instructions to assist with the reduction
of the risk of failures and mistakes in the processes used to produce a product or service. ISO
9000, which was first published by the International Organization for Standardization (ISO) in
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1987, is now used extensively throughout the world. Today, more than 6,70,000 organizations
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worldwide are third party certified to ISO 9001:2000.
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Total quality management stage is the highest level, involving the application of
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quality management principles to all aspects of the business. TQM requires that the principles
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of quality management be applied in every branch and at every level in an organization.

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Typical of an organization going through a total quality process would be a clear and
unambiguous vision, few interdepartmental barriers, time spent on training, excellent supplier
and customer relations and the realization that quality is not just product quality but also the
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quality of the whole organization, including sales, finance, personnel and other non-
manufacturing functions.
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Bergman & Klefsjö (2003) described TQM as “a constant endeavor to fulfill, or

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preferably exceed customer needs and expectations at the lowest cost, by continuous
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improvements work, to which all involved are committed, focusing on the processes in the
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organization”
2.2 TQM Framework
TQM has evolved over a period of time through practice and the contribution of
principles by various gurus. The whole system is focused towards the customer, who is the
basic purpose for which the organization exists. The products and services are realized by the
combination of various principles and practices based on people and relationships, and Tools
and Techniques, as shown above. The approach to product realization is by continuously
identifying activities and process for incremental and breakthrough improvement so as to
provide the best to the customer. This happens when at every stage all activities and process
have progressive performance measures which channelize the performance in the direction of
the set goal.

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2.2.1 Framework's system

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Figure below shows how the framework's system connects and integrates the
categories. This has three basic elements: Organizational profile, system, and information &
analysis.
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The main driver is the senior executive leadership which creates the values, goals and
systems, and guides the sustained pursuit of quality and performance objectives. The system
includes a set of well-defined and well-designed processes for meeting the organization's
direction and performance requirements.

Measures of progress provide a results-oriented basis for channeling actions to deliver
ever-improving customer values and organization performance. The overall goal is the
delivery of customer satisfaction and market success, leading, in turn, to excellent business
results.
2.2.2 European Foundation for Quality Management (EFQM) model TQM
The Baldrige Award led to a huge interest around the world in quality award frameworks that
could be used to carry out self- assessment and to build an organization wide approach to
quality, which was truly integrated into the business strategy. It was followed in Europe in the
early 1990s by the launch of the European Quality Award by the European Foundation for
Quality Management (EFQM). This framework was the first one to include ‘Business Results’
and to really represent the whole business model.
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Like the Baldrige, the EFQM model recognized that processes are the means by which
an organization harnesses and liberates the talents of its people to produce results/
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performance. Moreover, improvement in performance can be achieved only by improving the

processes through involving the people. This simple model is shown in Figure above.
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The EFQM publication for the new millennium of the ‘Excellence Model’ captures much
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of this learning and provides a new ten-step framework for organizations to follow:
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1. set direction through leadership;

2. establish the results required;
3. establish and drive policy and strategy;
4. set up and manage appropriately the approach to processes, people, partnerships and
resources;
5. deploy the approaches to ensure achievement of the policies, strategies and, thereby,
the results;
6. assess the ‘business’ performance in terms of customers, their own people and society
results;
7. assess the achievements of key performance results;
8. review performance for strengths and areas for improvement;
9. innovate to deliver performance improvements;
10. learn more about the effects of the enablers on the results.

2.2.3 The four Ps and three Cs framework of TQM
These ‘four Ps’ form the basis of a simple model for TQM which was developed by John
Oakland in the 1990s. To complete the model these were complemented by the all-important
three Cs: Culture, Communication and Commitment. This basic TQM model has been further
adapted to characterize all aspects of lean quality by wrapping the two key lean ideals of
maximize value for all customers and continuous improvement in all processes and outcomes
around it. This new model of TQM provides both the "hard’ and ‘soft’ management necessities
required to take organizations successfully into the twenty-first century.
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This new TQM model, based on all the excellent work done during the last century, provides a
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simple framework for excellent performance, covering all angles and aspects of an
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organization and its operation.

Performance is achieved, using a business excellence approach, and by planning the
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involvement of people in the improvement of processes. This has to include:

1. Planning - the development and deployment of policies and strategies; setting up
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appropriate partnerships and resources; and designing in quality.

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2. Performance - establishing a performance measure framework - a 'balanced scorecard'

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for the organization; carrying out self-assessment, audits, reviews and benchmarking.
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3. Processes - understanding, management, design and redesign; quality management

systems; continuous improvement.
4. People - managing the human resources; culture change; teamwork; communications;
innovation and learning.
2.3 Barriers to TQM implementation
The barriers to implementing total quality management (TQM) know no limits; they show
up in all sectors — manufacturing, services, government, and education. Therefore, it is
important for all organizations to understand and avoid these barriers both before and during
TQM implementation. It is found that there are 15 distinct barriers to TQM that are common to
all types of organizations and within all management levels. The eight that plague
organizations most often are discussed here in detail.

2.3.1 Non-committed management
Many a times, management commitment is seen only in words and not in action. In all
types of organizations, including schools, manufacturing companies, health care organizations,
and public organizations, experience low employee participation and interest in their TQM
programs when management commitment is missing at any level. Missing or even minimal
support from the chief executive officer and administrators can hinder TQM’s successful
implementation.
For example, TQM will not succeed if upper management is only motivated by outside
pressures, such as needing to please the board of directors or meet an accrediting agency’s
standards. If employees see discrepancies in what management says and what it actually does,
they will lose interest and faith in TQM. For successful implementation, the administrative
team must have a clearly communicated purpose for adopting TQM, be consistent in its
application of TQM principles, and not treat it as the latest management fad.
2.3.2 Difficulty in changing organizational culture
By nature, human beings resists changing. To overcome this, everyone should be made
to understand the need for change. Many have found that changing a company’s culture to
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reflect TQM is difficult and requires a lot of time. W. Edwards Deming has stated that it takes
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three to five years to fully implement TQM into an organization. First, the fear of change must
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be removed from the organization, poor labor-management relations must be resolved, and the
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company’s focus must change from the status-quo. En
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For an organization’s culture to change, the effort must be targeted and continuous,
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administrators must be committed to it and support all change efforts, and TQM principles
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must be consistently used so they become an integral part of how the organization works.
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Upper management must identify and deal with inconsistencies in the organization and focus
on adhering to the principles of the new organization. Managers must support each other.
Open, non-threatening communication is critical as everyone works to implement TQM
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principles. It is useless for management to sell TQM to the staff and then revert to its old way
of doing business.
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2.3.3 Improper planning

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Another barrier is created by a lack of clarity in the implementation plan and the
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failure to promote open dialogue among the participants. The traditional concept of planning at
the top level & enforcing to implement by the others will not work. Everyone should be
involved in implementing TQM. Many implementation problems can be overcome with proper
planning. Three components of a successful TQM plan are:
• Obtaining companywide commitment
• Communicating company vision, mission, and goals
• Providing open communication about the company’s new focus
The board of directors or other controlling group must be involved from the beginning.
A time frame, such as a Gantt chart, should be developed and posted in public areas so that
everyone remains focused on TQM. The plan should remain flexible, however, so that
adjustments and improvements can be made as the culture evolves.

2.3.4 Insufficient training and education
Training and education should be conducted continuously. Training and education is
an ongoing process that facilitates continuous quality improvement in any organization.
Leaders involved in the TQM implementation should identify the educational needs of the
organization and be creative in meeting those needs efficiently and cost effectively. Training
and education should be both formal and informal.
For example, a health care organization used a leading consulting group to train its
vice presidents to be trainers for the rest of the organization. This approach demonstrates
management’s commitment to TQM and ensures the principles are consistently taught to all
employees. The vice presidents also continually learn the principles as they teach them.
Informal training could include circulating articles on TQM or displaying information about
TQM on company bulletin boards.
2.3.5 Improper organizational structure
Lack of coordination among departments and individuals due to improper
organizational structure is a barrier for the successful implementation of TQM. Autocratic
organizational structure and management policies can lead to TQM implementation problems.
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If organizational structure is a problem, part of the planning process should be restructuring
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with a defined purpose and explicit expected outcomes.
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When TQM principles are used, the isolation of individuals and departments will
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dissolve over time. Teamwork is an essential part of the TQM environment, and some success
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has been realized by managers who used TQM principles to resolve some of the most
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longstanding turf battles that prevailed in their organizations. Tools such as brainstorming,
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fishbone diagrams, and workflow diagrams can be successful in identifying the discrepancies
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and misinterpretations that are often the root cause of such feuds.
2.3.6 Difficulty in accessing data/results
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Data collection, storing, processing and retrieval poses problems. When new ideas are
implemented, techniques are to be used to measure them. Having no measurement process or
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ineffective measurement techniques, failing to maintain accurate and reliable data, and failing
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to provide sufficient access to data run counter to TQM principles. Data are critical to decision
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making in a TQM culture. Key quality characteristics should be measured consistently so that
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reliable, comparative data are produced over time. Data must be credible and reliable, or
decision makers will be unable to make appropriate and proper decisions. Quick, easy access
to data is important; data retrieval must be efficient, not time consuming or labor intensive.
Decision makers must also receive training in data analysis and interpretation so that the
measurement system will serve its intended purpose.
2.3.7 Lack of properly understanding customers
Customers need to keep changing. Hence a proper feedback system is needed for TQM
implementation. Organizations must pay attention to both their internal and external customers
so that they can understand the needs and expectations of both types of customers from both
perspectives. Too often, managers assume they know what customers need and expect, which
results in misdirected efforts and investments. A smart organization makes a high priority of
under-standing all customers’ changing needs and expectations.

2.3.8 Inadequate use of empowerment and teamwork
Complacency in teams will inhibit TQM progress. Ineffective teams that fail to stay
focused or complete their tasks are a big expense to organizations. To be effective, teams need
trained facilitators, a mission or purpose, a time frame for completing projects, members who
represent the functional areas of the process to be improved, and accountability. The mission
of the team must not be overwhelming; some tasks might need to be broken down into
manageable phases so this is not the case. Whenever possible, teams’ recommendations and
solutions should be implemented; this sends a powerful, positive message to employees about
the importance of empowerment and team-work.
Avoid TQM barriers by understanding them
While these barriers occur to varying degrees and with varying frequency, there is little doubt
that they exist in every organization. Management must understand that they do exist and
should not only deal with them in the implementation process but plan for them as well.
Awareness of these barriers should be emphasized when training organizations in TQM
concepts and methods. If these potential problems are understood and prepared for, plans can
be made to counter them. Any organization can benefit from better understanding and
knowledge of TQM
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2.4 Principles of Total Quality Management
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Total Quality Management ensures maximum effectiveness and efficiency within a
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business and secures commercial leadership by putting in place process and systems which
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will promote excellence and prevent errors. It ensures that every aspect of the business is
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aligned to the customer needs and the advancement of business goals without duplication or
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waste of efforts.
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Different companies have different approaches to implement Total Quality

Management (TQM). The following principles (which are common to all companies) must be
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adhered for the successful Total Quality Management (TQM) implementation:

2.4.1 Continuous improvement.
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This principle consists in involving all staff at all levels and in all entities in activities
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to improve the organization’s distinctive capabilities. TQM is a long-term process that entails
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achieving improvements in the company’s operations. This means that management should
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establish targets for improvement and measure progress by using reliable criteria. The quest
for quality and better service to the customer should be a continual, never-ending one.
Competitors will seek to provide better service and customers will come to expect it. Hence, to
cease improvement efforts will likely lead to loss of competitive advantage and a decreased
level of customer satisfaction.
Corresponding to this principle, the organization’s overall performance should be a
permanent objective of management. The phrase ‘continuous quality improvement’ can be
used only when, as specified in ISO 9000: 2005, quality improvement is permanent, temporary
actions to improve quality do not meet this principle. Currently, the requirements for product
quality and service have increase beyond the level implied by the phrase ‘quality assurance’,
and believe that customer satisfaction is no longer sufficient to overcome expectations by
promoting the concept of ‘Beyond Customer Satisfaction’ according provided that the product
must exceed customer requirements, to enthuse him.

Among the advantages of organizations applying this principle, it should provide:
• Continuous performance improvement becomes a permanent approach across the
organization
• Requires staff training methods and tools for continuous improvement;
• Continuous improvement of products and processes is a goal of every person in the
organization;
• Establishment of measures for continuous improvement and its tracking;
• Recognition and distribution of the improvements.
2.4.2 Customer focus

In TQM, the customer is believed to be the ultimate judge of quality. Therefore, the
company must remain close to the customer and understand how he or she views and judges
quality. For this, it is necessary, first, to identify external customers and internal customers.
Then the requirements, the needs and the expectations are determined and then they are
translated into specifications, based on which the products are made with certain quality
characteristics. The customers’ needs knowledge through market research is done on buyers,
consumers and even competitors’ customers. Also, if customers of the organization are other
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organizations, the study should be extended to their clients. Based on study results, a list is
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drawn up with the needs expressed by customers and the importance given to each need.
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The benefits of applying this principle can be summarized as follows:
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Allow the establishment of appropriate organizational objectives according to the customer

needs and expectations;
• Increase market share
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• Create the best conditions for customer loyalty;

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Allow to measure and analyze customer satisfaction and initiate actions based on results;
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• Managing the client relationship, ensuring a balance between satisfying customers and
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other direct stakeholders (shareholders, employees, suppliers, society etc.).

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2.4.3 Leadership
Structuring your system of organized leadership within a business will enhance overall
management and productivity within a company. Full commitment is needed at the top of the
business hierarchy. Eliminating performance ratings and placing an emphasis on stability and
consistency in effort will help to create small gains that will add up over time When making
large-picture changes to the business or the business model, include all team members in
decisions. Look for feedback and ideas from your staff, suppliers and clients.
The role of managers in promoting TQM to the structural operating levels must be:
• Top managers must focus their attention to the activities in which are directly responsible
for quality.

• Middle level managers (heads of departments) must focus their attention at process level to
optimize the activities of the departments they lead. Activities are evaluated, correlated
and made in a unitary manner.
• Employees must understand and comply with quality system at execution level: ‘well done
the first time and every time’ to remove non-quality and to the compliance with the
requirement of ‘zero defects’.
The benefits of applying this principle can be summarized as follows:
• Ensure compliance with the needs of all stakeholders;
• Enable the development of the objectives that will ensure increased competitiveness of
organization and thereby will establish a clear vision of the organization’s future;
• Providing the necessary resources for the training and the freedom to act with
responsibility and efficiency for the staff;
• Build confidence and eliminate fear, by encouraging and recognizing personal
contributions
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2.4.4 Strategic Planning
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Having a focus and a strong perspective on quality in production and in work levels
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allows personnel at all ranks to constantly plan for improvements. Awareness of a desire for
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perfection in workplace operations and an emphasis on consistency, stability and steadiness

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will help to promote productive processes for creating products and managing customer
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satisfaction. Strategic planning also encompasses quality control. Quality control is also
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eliminating waste within production and personnel and keeping every member of the team
focused on an emphasis on customer satisfaction.
2.4.5 Employee empowerment
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This principle consists in developing the capacity to act and to decide individually in
solving problems, and to engage in quality improvement projects. The staff has the main role
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at all organizational levels and only by total and conscious involvement and aware is possible
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that everyone’s skills should be involved to achieve quality policy. For this purpose it may act
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through measures to ensure full motivation of all staff to permanently participate to the process
of improvement, innovation and creativity, thus ensuring the organization’s objectives.
For the implementation of this principle it is very important to create an internal
environment based on the cult of quality, and for the ‘well done work for the first time and
every time’. Employee involvement in improvement (quality, cycle-time and loss), usually by
teams, can be achieved through various forms of training associated with participation in
management decisions and actions that give rise to employee empowering. The results of
applying this principle can be measured through the quality indicators, among which the most
important are the quality and cost of labor productivity.
The advantages of applying this principle are:
• Understanding by employees of the importance of their role and contribution in the
organization;
• Employees can evaluate their own performance compared to their personal goals;

• Employees will be permanently preoccupied to develop the knowledge and experience to

enhance their performance;
• It creates the framework in which employees openly share their knowledge and
experiences in solving involving problems.
2.4.6 Process approach to management
Keeping a team focused on the functional operation of work systems and devising
plans that help employees to be educated and well-trained in their particular fields will allow
for the company to grow and flourish. This principle is a fundamental concept underlying the
international standard ISO 9000 family, each process having inputs and outputs and involving
people and other resources.
More resource-intensive activities that contribute to achieving an output element (a
blank, subassembly products, part of a service, important activities of a project, etc.) can be
considered a process. Here, the process means a set of activities that relate and interact to
transform inputs into outputs. We observe that most times the output elements are elements of
a process of entry into the next process. Applying a system of processes within an
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organization, including identification and interactions between them and their management
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may be considered a ‘process approach’. This type of approach is aimed at fulfilling a dynamic
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cycle of continuous improvement and enable significant gains for the organization by reducing
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costs, shortening the implementation process by efficient use of resources and better results
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based on focusing to consistent and predictable opportunities of process improvement.

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2.4.7 System approach to management

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The principle requires global approach to quality management, including all structures
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of the company and all employees. A perfect work performed by a department of the company,
but neglected to another, loses all value. In fact, all departments of a company are, in one way
or another, customers or suppliers to one another, as are the customers and external suppliers
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to the company. Quality management system is part of the overall management of the
organization, along with other parties such as human resources management subsystems,
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suppliers, health and safety etc. Even if these subsystems are not enough visible, they are
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found in every organization.

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The principle involves understanding and conducting the quality management system
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in the company, given that its activities are embodied in interrelated processes, so as to ensure
efficiency improvement organization. Quality management system processes are managed as a
system by creating, understanding and conducting network-processes and their interactions.
Consistent operation of this network of processes is often called a ‘systemic approach’
management and applies to the entire quality management system. ‘The process’ is related to
the activities carried out and results obtained intermediate to produce the desired result for the
client. Every process in the system processes has clients (internal or external to the
organization) and other stakeholders who are influenced by process and defining the desired
outputs according to their needs and expectations.
Applying this principle results in
• Better achieve of the objectives pursued by integration and alignment of processes

• It provides confidence to the stakeholders on the existence, effectiveness and consistency
of the organization;
• Understanding the interdependencies between processes within the organization;
• A structured approach to harmonization and integration of processes;
• Achieving a better understanding of roles and responsibilities;
• Understanding the organization’s capabilities and prioritization of actions according to
material constraints;
• Defining how specific activities will take place within the system;
• Pursuing permanently the system improvement by measurement and evaluation;
2.4.8 Management by Fact:
This principle is difficult to institutionalize, because every employee in an
organisation has opinions, views and notions about how things should be done. They may tell
you what the root cause of a problem is but may not give you the facts for solving the problem.
This ways people may become the part of the problem itself rather than solvers. Facts are far
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better than opinions, although opinions, views and views and ideas cannot be ignored.
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The benefits of the principle can be:
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Decisions are pertinent and reliable because they are based on accurate and verified data
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and information;
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Data and information analyzing is made using established methods;

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• Making decisions and setting up actions based on an analysis of the facts, balanced with
experience and intuition;
• Providing access to data to those who need them.
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The entire organization must be subject to the search for improved ways of
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performing; nothing should be regarded as sacred or untouchable. A sometimes helpful view is

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to consider the internal customers and strive to satisfy them; that is, every activity in an
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organization has one or more customers who receive its output. By thinking in terms of what is
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needed to satisfy these customers, it is often possible to improve the system and, in doing so,
increase the satisfaction of the final customer.
2.5 Quality statements
Quality statements are part of the strategic planning process. Strategic planning is the
process of planning as to how to achieve organizational objectives with the available resources
and is undertaken by the central management of the business. There are three quality
statements namely, vision statement and mission statement and quality policy statement. Once
developed, they are reviewed and updated, some times. Each organisations, invariably have a
vision of and mission on, what quality is and how to achieve it.
1. Vision statement - Vision in general means view of future. This is the open declaration
made by the organization stating what it wants to be and look like after a specific
period of time. Vision statement of Ford is as “To become the world's leading
consumer company for automotive products and services”.

2. Mission statement - A mission statement defines the company's business, its
objectives and its approach to reach those objectives. A mission statements contains
who the organization is, the customers of the organization, what organization does and
how the organization does it. Mission statement of Harley-Davidson, Inc is as “We
fulfill dreams through the experience of motorcycling, by providing to motorcyclists
and to the general public an expanding line of motorcycles and branded products and
services in selected market segments”.
3. Quality policy statement - Quality policy statement is the guide for all activities in an
organization with respect to how they should provide products and services to the
customers.
The major elements described in quality policy are aimed at the following:
• To describe managements’ commitment to maintaining standards of the company’s
product or service.
• To identify the ownership and involvement within the organisation of all staff and
specifically those with key roles in maintaining the quality of the company’s
product or service.
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To state how the company’s product or service is monitored to ensure that it
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continues to meet customer and market place needs.
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• To state how the importance of meeting the customers’ needs it communicated
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within the organization.

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• To state how the company ensures customer satisfaction is achieved.

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• To detail how the company provides adequate resources to enable the above to
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happen.
• To state that the company systems or processes will be reviewed periodically to
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ensure that they remain effective in delivering customer satisfaction.

2.6 Customer Focus in Total Quality Management
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Customers are most important people in any business. A customer can be defined as
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one who purchases a product or services. It is obvious that business cannot survive without
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customers. The satisfied customers are expected to continue buying goods and services again
and again from companies that meet their needs. Feedback through questionnaire and
interviews is the process through which many companies closely monitor the satisfaction level
of the customers. The organisations develop good relationships with customers.
There are two distinct types of customers– external and internal.
a) External Customer - An external customer may be an individual or an enterprise that hires
or purchases the product(s) or service(s) from another person or business in exchange of
money. An external customer can be defined in many ways, such as the one who uses the
product or service, the one who purchases the product or service, or the one who
influences the sale of the product or service. or instance, McDonald’s determined the
customers be the child when they introduced their “happy meals.” The child never paid for
the meals but the child influenced the sale. Oftentimes, parents purchase lawnmowers and
yet the teenage children use the lawnmowers. The identity of the external customers is not
always easy to determine.

b) Internal customers - Internal customers are within the company-the colleagues working
together for delivering a service or product for the external customer. Every function,
whether it is engineering, order processing, or production, has an internal customer– each
receives a product or service and, in exchange, provides a product or service. Every person
in a process is considered a customer of the preceding operation. Each worker’s goal is to
make sure that the quality meets the expectations of the next person. When that happens
throughout the manufacturing, sales and distribution chain, the satisfaction of the external
customers should be assured.
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A basic concept of TQM is an unwavering focus on customers, both internal and
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external. Most of the employees know about the external customer or end user but may not
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think of other employees as internal customers of their output.
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2.6.1 Customer Needs
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The success of an organisation is dependent on its ability to create and deliver products
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and/or services according to the customer needs. Despite this fact, number of companies fails
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to do so. More specifically, the marketers fail to find the characteristics of the structured
customer need statement should possess. The first and foremost step to become a customer-
centric organization is to research and define customer needs accurately. Understanding
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customer need is must before developing solutions. It is the hallmark of the customer
satisfaction. A need assessment is a systematic process for determining and addressing needs,
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or finding the gaps between current conditions and desired conditions. Research with
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structured interviews by trained interviewers and structured questionnaire with clear, relevant
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statements are helpful in determining the real customer needs.

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Basic Requirements of the Customers

Some of the most common and basic requirements of the customers include:
• Customers always expect high levels of quality.
• Customers expect fast, efficient, accurate and timely service.
• Customers are price conscious. They expect high quality products/services at a
competitive price.
• Customers expect zero deviation from expected performance of products or services.
• The customers always expect friendly, helpful service staff ready to provide timely
information and ready to be served every time. They expect quick response of their
queries.

• The customers don’t expect long queues, waits or hold for long time.
• The customers expect easy to surf website(s). They don’t like unnecessary
advertisements or promos and unnecessary links.
Benefits of Meeting Expectations
When the organisations are able to accurately identify and adequately meet the
customers' expectations, the customer service Customers are transformed from first-time
visitors to loyal clients.
• The sales are increased as customers feel more comfortable doing business with the
organisation.
• More referrals from satisfied customers are generated who bring in additional business
by word of mouth.
There is no doubt that adequately meeting customer expectations is an essential part of
a robust customer service department. By accurately identifying those expectations, and
meeting or exceeding them consistently, the company is likely to enjoy happier customers and
a healthier bottom line.
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2.6 Customer orientation orientation
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Customer orientation is the prime issue Customer
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satisfaction Trust
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orientation is a key to achieve business goals. A

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firm can achieve marketing goals by Customer

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retention
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customer orientation approach means that the

company gives high importance to the customer and is a customer focused company. Such
customer oriented companies design customer oriented marketing strategies. The key to having
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customer orientation is to add value as much as possible to the product and services. The
customers are loyal to the companies which give them value.
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to focus on the changing wants and needs of its customers. In other words, the customer’s
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wants and needs are the first priority of management as well as employees. It refers to a series
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of actions taken by the management to support the needs of their customers by engaging their
employees in order to ensure customer satisfaction.
Customer orientation is a group of actions taken by a business to support its sales and
service staff in considering client needs and satisfaction. Business strategies that tend to reflect
a customer orientation might include: developing a quality product appreciate by consumers;
responding promptly and respectfully to consumer complaints and queries; and dealing
sensitively with community issues.
The consumer orientation is modern marketing philosophy and approach that guide the
marketing managers to design their marketing mix in such a way that the firm can offer
maximum possible satisfaction to target consumers. Every marketing effort and every decision
is aimed at satisfying needs and wants of the target consumers. Generally, most of the satisfied
consumers buy large quantities of same products and services more frequently. They generate
positive word-of-mouth and give valuable suggestions.

Customer orientation is of ultimate importance to deliver value added products. There
are four fundamental stages for customer orientation.
1. Develop - Development has to be done keeping customer needs into mind. Products should
be customer oriented. The development cycle time should be minimal.
2. Manufacture - As per the product, the manufacturing should be such that it gives the best
products to the customer. Quality should not be compromised. Manufacturing cycle time
should be reduced.
3. Market - Identifying and targeting the right customer. Process the demand as early as
possible. Customisation of the products for the market.
4. Deliver - Deliver to the target customer and reduce delivery time. Value for money
products.
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2.6.1 Steps by Companies to bring Customer Orientation
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Customer orientation requires following steps to be taken by organisation:
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1. The organisation should conduct research and define the target market carefully.
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2. Find out customers’ actual and genuine needs and wants after collecting relevant
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3. The development of the product has to be done keeping the end user in mind. It must
be as per their expectations.
4. To match the expectation of the customers, the production must be according to the
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demand. Long wait for products or services affect the satisfaction level of the
customers. Always maintain equilibrium in demand and supply.
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5. The organisation must have fair deal with customers and ensure commitment toward
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them.
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6. Establish and maintain long-term relations with consumers. Good relationships with
customers are helpful in getting feedback for further development. (Customer
Relationship Management etc.)
7. The customers always consider value for their money. If they get value for their
money, they are satisfied. The delighted customers are those who receive products
beyond their expectations.
8. Provide them correct information as and when demanded.
9. Safeguard their long-term interest/welfare.
10. Treat them as business partners.
11. Always be ready to get consumers’ suggestions, feedbacks and resolve grievances.
12. Find out the best way to greet them, and meet their expectations.

2.7 Customer satisfaction
Customer satisfaction, a business term, is a measure of how products and services
supplied by a company meet or surpass customer expectation. In today’s competitive world,
customer satisfaction has become a measure of quality. An organizations success depends
largely on its customers. The primary goal of an organization should be customer satisfaction
and not profit maximization. Customer satisfaction is the goal of TQM. Measuring customer
satisfaction provides an indication of how successful the organization is at providing products
and/or services to the marketplace.
Various steps to evaluate the customer satisfaction are listed as follows :
1. Study the buying procedures of each customer organisation and map them with respect to
individuals.
2. Determine the factors of buyer-seller interactions.
3. Analyse the trends of the above and formulate the indices, to represent of all relevant
features such as repeat orders, switching, and number of customers lost, as well as gained.
Factors determining customer satisfaction:
1. Quality of supply.
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2. Product installation/commissioning.
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3. Product performance, ease of operation and control,
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Customer perception of quality :

1. Performance: It means `fitness for use` which shows that the product or service is ready
for the customer’s use at the time it is sold.
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2. Features: Attributes or features of a product or services.

3. Services: Customer service is not quantifiable. Providing excellent customer service is
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4. Warranty: It represents the manufacturer’s promise on quality, supported by a guarantee

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satisfy customer.
5. Price: Customer’s are constantly valuing the products and the services against the
competitors, to know who provides a better value. Organisations have to maintain contact
with customers to identify, verify, and raise their precipitation of value on each product
and services.
6. Reputation and good will: The customer satisfaction depends upon the lasting experience
with the company, beyond product or services.
Customer expectations
2.7.1 Teboul model of customer satisfaction Satisfaction level
In this model, square represents the product/service
offered by an organization. Circle represents customer Organizations offer
expectations. Total satisfaction is achieved when square
encloses the circle within. A sensible organization always Teboul model
strives to make the overlap as high as possible.

2.7.2 Kanos customer satisfaction model
Customer Excitement
Customer satisfaction model satisfied factors
developed by N.Kano is used to Performance
measure client happiness. This Excitement s factors
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customers. In other words, it is a fulfillment
Threshold Attributes
useful technique for deciding which
features the organisations should
include in a product or service. This
is Kano’s theory: For some customer Basic
Customer
factors
requirements, customer satisfaction dissatisfied
is proportional to the extent to which The Kano model of Customer satisfaction
the product or service is fully
functional. Kano identified three different factors influencing customer satisfaction. They are
1. Basic factors : Are the minimum requirement factors which will cause dissatisfaction if
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not fulfilled but won’t increase the customer satisfaction if fulfilled. eg. A cell phone
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having basic functionality.
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2. Excitement factors : Excitement factors(value addition factors) are those factors which
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cause customer satisfaction if delivered but do not cause dissatisfaction if not delivered. It
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is schematically represented in figure below. eg. Cell phone having features like mp3
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3. Performance factors : Factors will cause customer satisfaction if high and cause customer
dissatisfaction if low. eg. Mobile phone having more battery backup, life etc.
According to this model, a product or service can have three types of attribute or property:
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1. Threshold Attributes: The customers expect threshold attributes to be present in the

product.
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2. Performance Attributes: These are not absolutely necessary, but increase the customer's
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3. Excitement Attributes: The customers are unknown about these attributes but are delighted
when they find them.
Based on the above view, customers are classified into :
1. Type A customers
Type A customers are those who have expectations on value addition (i.e., a movement
towards positive of x axis). When their expectations are met they will make no comments,
with the satisfaction at normal. When their expectations are not met they will become
dissatisfied customers.
2. Type B customers
Type B customers are those who are without any expectations. When there is no value
addition, since there is no expectations their satisfaction will be at normal. When there is
some value addition, these customers become delighted.

Steps in the customer satisfaction model. Process
Kano developed a questionnaire to identify the basic, performance andexcitement

factors as well as the other three additional factors.
1. For each product feature a pair of questions is formulated to which the customer can
answer in one of five different ways.
2. The first question concerns the reaction of the customer if the product shows thatfeature
(functional question);
3. The second question concerns the reaction of the customer if the product does NOT show
this feature (dysfunctional question).
4. By combining the answers all attributes can be classified into the six factors.
2.7.3 The ACSI Model
The American Customer Satisfaction Index (ACSI) model was developed at the Ross
School of Business, University of Michigan's. In this model, various multivariable components
are measured by several questions that are weighted within the model. Further, it uses
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customer interviews as input to a multi-equation econometric. The ACSI model is a cause-and-
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effect model with indices for drivers of satisfaction on the left side (customer expectations,
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perceived quality, and perceived value), satisfaction (ACSI) in the center, and outcomes of
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satisfaction on the right side (customer complaints and customer loyalty, including customer
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retention and price tolerance). The arrows in the model represent ‘impacts.’ The ACSI model
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loyalty. Looking at the indexes and impacts, users can determine which drivers of satisfaction,
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if improved, would have the most effect on customer loyalty.

Perceived Customer
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ACSI Model
1. Customer Satisfaction (ACSI)
The customer satisfaction (ACSI) index score is calculated as a weighted average of
three survey questions that measure different facets of satisfaction with a product or service.
ACSI researchers use proprietary software technology to estimate the weighting for each
question.
2. Customer Expectations
Customer expectations combine customers’ experiences with a product or service and
information about it via prior personal usage/ experience, media, advertising, salespersons, and
word-of-mouth from other customers. Customer expectations influence the evaluation of
quality and forecast (from customers’ pre-purchase perspective) how well the product or
service will perform. It is a measure of the customer's anticipation of the quality of a
company's products or services.

3. Perceived Quality
Perceived quality proves to have the greatest impact on customer satisfaction. It is a
measure of the customer's perception about the quality and the recent consumption experience
of the company's products or services. Perceived quality is measured through three constructs:
(1) overall quality, (2) reliability, and (3) the extent to which a product or service meets the
customer’s needs.
4. Perceived Value
Perceived value is a measure of quality relative to price paid. The perceived value
directly influences customer satisfaction, and is affected by customer expectations and
perceived quality.
5. Customer Complaints
Customer complaints are measured as a percentage of respondents who indicate they
have complained to a company directly about a product or service within a specified time
frame. More complaints mean more dissatisfaction.
6. Customer Loyalty
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Customer loyalty is measured by likelihood to purchase a company’s products or
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services at various price points. It is the customer's likelihood to repurchase from the same
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supplier in the future. Customer satisfaction has a clear effect on loyalty. Customer loyalty is
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the critical component of the model as it stands as a proxy for profitability.

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Benefits of customer satisfaction :

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1. Customers are retained by the organization for a long period of time.

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2. Customer deeper their relations with the organization.

3. Customer becomes less sensitive to changes in price of products or services.
4. Customer recommends the products to others.
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2.8 Customer complaint

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A customer complaint is an expression of dissatisfaction with a product/service, either

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misunderstanding or an unreasonable expectation of a product or services.

When customers complain and they are satisfied with the way their complaint is
handled, they are more likely to purchase another product or service from the same company.
Companies that resolve complaints on the first contact increase customer satisfaction and
product loyalty, improve employee satisfaction, and reduce costs.
Companies even encourage complaints. Most dissatisfied customers do not complain.
By making it easy for customers to complain, more customers will come to you with their
problems, giving you greater opportunity to correct your service delivery or production
processes. Customers who get their problems satisfactorily and quickly solved tell their friends
and neighbors, and they are not easily won over by the competition.
Customer complaints also represent valuable information about recurrent problems.
They can point the way to understanding the root causes of customer problems and help an
organization target core processes that need improvement.

If acted upon to improve core processes, customer complaints can be a source of
information that can reduce costs as well as improve services.
2.8.1 Benefits of customer complaints
Following are the benefits of accepting customer complaints
1. To discover customer dissatisfaction
2. To identify customer’s needs
3. To discover relative priorities of quality
4. To compare performance with the competitors
5. To determine opportunities for improvement.
2.8.2 Factors causing the consumers to complain
Attitude
Cultural Likelihood of
Diversity success
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the problem
Personality
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External and Employee
Internal Relationship
attribution of Demographic
blame Variables
Factors causing the consumers to complain
1. Attitude - A lot of factors affect customer complaining. One of them is the attitude of the
customer. It is the attitude which differs among the complainers and non complainers.
Complainers have a positive attitude towards complaining. If they are dissatisfied with the
product/ service of a firm, they believe complaining as their right.

Non complainers in contrast have a negative attitude towards complaining. They believe
that complaining will not make a difference. More positive the attitude of a person towards
complaining higher the complaining intention the person has. A personal norm refers to
consumer’s perception of complaining to the service provider and societal benefits refer to
the social benefits consumers perceive to be resulting from complaining. Personal norms
are found to affect private actions of the consumers (negative word of mouth).
2. Likelihood of success -It refers to the probability that the retailer will remedy the customer
problem without protest. Consumers were found to complain only when they felt their
efforts of complaining will not go futile.
3. Subjective norm - Subjective norm also affects the complaining intention among the
customers. “Subjective norm” refers to the extent to which a person feels that his parents,
siblings, close friends, partners etc. want him/ her to perform a behaviour in question. The
higher the subjective norm for a person, the lower is the complaining intention
4. Time/Money/skills - Difficulties encountered in complaining and resources such as time,
money, skills etc can also hinder a person from complaining. Inconvenience caused during
making a complaint also has an effect on consumer complaining behaviour.
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5. Product Characteristics (Cost/durability/importance) - Customer dissatisfaction is more in
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services than products. Apart from dissatisfaction product characteristics like cost,
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durability, importance might also affect the complaining behaviour.
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6. Severity of the problem - Severity of the problem determines complaining by the

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customers than the effort involved in complaining.

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7. Customer Employee Relationship - Tendency of the customers to complain is also

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affected by the strength of the relationship between the customer and the employee. If the
relationship between the two is weak then the customers would not hesitate to complain
because they think that it will not affect their relationship.
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8. Demographic Variables - Several factors are found to influence complaint behaviour of

customers. Some demographic variables are: age, income and education level. It was
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9. External and Internal attribution of blame - If there is an external attribution of blame

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(product failure is due to product’s fault) customers are more likely to complain. Whereas
in case of internal attribution of blame (product failure is due to customer’s use of the
product), customers are not much inclined to complain.
10. Personality Variables - Personality variables are also linked with the complaining
behaviour of customers. Those customers who complain are more confident, socially
responsible and independent. Also such customers are not afraid to feel embarrassed when
complaining.
11. Complaint handling procedures - It is the social benefits and other benefits which
motivate a customer to complain. If complaining procedure became easier, then also
customers are more likely to complain. Complaining provides an opportunity to the firms
to improve themselves on the basis of the feedback given by the customers. So the firms
must encourage the customers to complain as much as possible.

12. Previous experience of complaint handling - Previous experiences of complaint handling
by the firms also influences customer’s attitude towards complaining. Positive past
experience of complaint handling by the firms helps develop in customer’s positive
attitude towards complaining.
13. Previous experience with the product/service - Customers not having any previous
experience of the product or service will have more complaint intentions after an
unsatisfactory experience, because they will be less committed to the supplier and their
evaluations will be based on their own perception.
14. Level of involvement - Level of involvement also affects complaining intention among the
customers. More the customers are involved with the product, more likely they are to
sacrifice resources (time, effort, money etc) for complaining. If the customer involvement
level is low customers are not bothered much to complain.
15. Cultural Diversity - Various cultural dimensions like individualism and collectivism etc
might affect intentions of the consumer to complain. Consumers in a collectivist culture
are less likely to complain than the ones in individualist culture. Individuals with high
degree of uncertainty avoidance are less likely to ask for redress or engaging in negative
word of mouth. For e.g Chinese consumers are less likely to complain to the service
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providers due to face saving and maintaining interpersonal harmony.
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1. Provide customers with the opportunity to complain.

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2. Give customers your full and undivided attention.

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3. Listen carefully.
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4. Ask key questions to fully understand the complaint

5. Agree that a problem exists; never argue.
6. Apologize for the problem.
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7. Resolve the complaint.

8. Thank the customer for bringing the complaint to your attention.
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Customer complaints are mainly either related to a product itself or after sales and service.
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Complaints related to the product itself Complaints related to after sales-service
• Product is defective/non-functioning • Service department responding to the

problem
• Product did not meet the basic
requirements • Product complaint not resolved even
after repair
• Customer expectation is higher than
what the product could deliver • Basic behavior and courteousness of the
service personnel
• Frequent breakdown of product
• Speed of response to a complaint call
• Product has defective parts

2.8.4 Tools of Customer Feedback:
1. Comment Card: Comment card can be attached to the warranty card & included with the
product at the time of the purchase. Intent of this card is to get simple information such as
name, age, address, occupation & what made the customer buy that product. This can have
simple open questions so that customer can answer it quickly.
2. Customer Questionnaire: This is the most popular tool for obtaining opinion &
perceptions about an organisation/ Product/ services. Most surveys ask the customer to
grade the question on a 1-5 or 1-10 likert scale. Design of questionnaire is of utmost
importance to get timely and relevant information. The main disadvantage of this system is
that only those who feel very good or very bad respond to the questionnaire.
3. Focus Groups: It is the most popular way to obtain feedback. Surveying a focus group is a
research method used to find out what customers are really expecting. Group of customers
is assembled in the meeting room to collect information. Carefully prepared questions are
asked by skilled moderator who probes into participant’s ideas, thoughts perceptions &
comments. People selected have the same profile as the expected customer. Focus groups
are sometimes used within the organization to address internal issues.
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4. Toll Free Telephone Numbers: Toll free telephone number is an effective technique for
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complaint feedback. Organization can respond faster & cheaply to the complaints.
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5. Customer Visits: Visit to a customer’s place of business is an effective way to gather
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information. Accurate information obtained people can see firsthand how the product is
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6. Report Cards: Report cards are another effective technique for complaint feedback.
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7. Social Networking Sites: There are certain sites where visitors can share good or bad
experience with a product or service. These sites give real insight into customer’s minds.
On other social networking sites, like Twitter and Facebook, people share their
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experiences and sometimes, unknowingly may give opinion about a company. Now certain
companies are having devoted teams to analyse these data.
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8. Employee Feedback: Employees are untapped source of information. Conventionally

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companies listen more to the external customers & less to the internal customer.
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Employees usually provide deeper insight into conditions. Also employee feedback will
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provide valuable insights into their motivational level, the moral, etc.
9. Mass Customization: Mass customization is another good tool to know about changed
preferences. Levi’s gives a facility on its website which enables a potential customer to
choose certain fabric, colour and design. Once the customer places an order Levi’s gets the
jeans stitched and delivered at customer’s doorstep.
2.9 Customer retention
Customer retention refers to the activities and actions companies and organizations
take to reduce the number of customer defections. The goal of customer retention programs is
to help companies retain as many customers as possible, often through customer loyalty and
brand loyalty initiatives. Successful customer retention starts with the first contact an
organisation has with a customer and continues throughout the entire lifetime of a relationship.

Customer retention also refers to the number of relationships which an organisation
can maintain on a long-term basis. It is a very natural and simple concept that if the customers
are feeling delighted satisfied and communicated regularly; they will keep coming back to the
organisation. The cost of acquiring a new customer is several times more than that of retaining
an existing customer. There are varieties of strategies and tools are available for retaining the
customer, among these tools, the most necessary tools are providing quality products and
services.
The key to customer retention is customer satisfaction. According to Philips Kotler,
satisfied customers stay loyal longer, talk favorably about the organization, pay less attention
to the competition, are less price sensitive , offer service ideas to the organization and cost less
to serve them than new customers.
2.9.1 Importance of Customer Retention
1. It helps in building strong relations with the customers
Serving a repeat customer is more beneficial for the company rather than acquiring a new
one. Thus, it is very important for the retailers to maintain hormonal relations with their
customers. In this regards retention strategies play an important role as through such
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strategies companies can provide benefits to its customers without affecting its cash flow.
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If customers get good quality products and services at competitive price, they get satisfied
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2. It enhances the goodwill of a brand

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Retention strategies involve giving extra or added benefits to the customers at the same
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price. In the present business environment, companies can attract and retain its loyal and
potential customers only if they deliver something new and unique or extra to its
customers as competitive price.
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3. It identifies future needs of the customers

Several retention strategies involve collecting personal information of the customers and
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their shopping patterns. For example, if a company has its loyalty cards, it collects
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information of the customers and with every purchase of that particular customer they
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update the profile of the customers. On the basis of this information, companies can
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determine the market trend and thus can identify the future needs of the customers.
4. It identifies and explores various sales opportunities
Customer retention strategy is beneficial for the companies. It plays a huge role in
increasing the sales and profits for the firms. For example, if a retailer is able to offer
various attractive strategies to its customers, it is able to attract more and more customers.
Thus, the retention strategy helps the company to design and explore various sales
opportunities.
5. It rectifies the flaws within the organisation's policies and processes
Many times it may be the case that any strategy designed by the company is not able to
achieve its purpose. In that case, retention strategies such as club cards can help the
companies to accumulate information regarding the customers and thus can design the
strategies as per their shopping behaviour.

6. Through this customers can easily provide feedback to the companies

Many customer retention strategies help the retailers to collect data regarding the
shopping pattern of the customers. Companies record the items that are frequently
purchased by the customers and on that basis determine the needs and wants of the
customers. Moreover, through such strategies customers can also provide feedback to the
companies regarding their products and services.
7. Organisations can increase revenue and reduce acquisition costs of the customers
It is beneficial for the company to serve existing customers rather than attracting new or
potential customers. Through such scheme, companies can earn the loyalty of the
customers and thus can increase their revenue streams. Moreover, if the companies have a
huge base of loyal customers, there is no need for looking new customers and thus they
can save a lot on acquisition cost
2.9.2 Strategies for customer retention
For the long-term success of any business, customer retention strategy plays a very
significant role. If an organisation has strong customer retention strategies, then it can quickly
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attain its goals and achieve higher customer lifetime value. It is quite cheaper to retain an
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existing loyal customer than to acquire a new one. Following are the different types of
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retention strategies practiced by the companies:
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a) Implementing a Customer Loyalty Program - It is a great way to retain the customers by

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providing them rewards for their repeat purchase. The rewards can be in the form of
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discount coupons, reward points, vouchers, early access to the sale, etc. If the customer is
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loyal towards the store, then the firm should reward and show appreciation towards the
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customers for choosing it against its competitors.

b) Sales Promotion - For acquiring new customers, sales promotion strategy is quite useful.
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To encourage customers for a repeat purchase, sales promotion technique should be used.
For Examples – rebate or cash back, premiums for regular purchase, collection schemes
and so on.
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c) Training of employees - Various training programs are carried out by the organisations so
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that their employees can easily learn about the new product and services, team building
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skills, social skills, etc. It will also help in reducing employee turnover rate. With the
execution of these types of training programs, the organisation can easily create the
atmosphere of integrity which can be easily identified by the customers as well as by the
employees.
d) Customer Satisfaction Surveys - Customer surveys are the best tools for identifying the
points of improvement in a customer’s experience and also help in identifying the
customers' needs. Various survey techniques like feedback forms, suggestion drop box,
etc. can be practiced by the companies for this purpose
e) Excellent Customer Services - To keep the customers happy and satisfied, the business
organisation should provide extraordinary services to their customers. It includes on-time
delivery, best after-sales services, keep in touch with the customers and ask about their
experience with the product, connect with your customers through social media sites &
emails and regularly update the customers for the new products and services.

f) Membership Cards - This is the newest way of attracting and retaining customers to shop
from the same players. Retailers nowadays are issuing membership or loyalty cards to its
customers to retain them and to motivate them for a repeat purchase. Through such
membership cards, companies give points to the customers which they can redeem on
their next shopping and thus gets discounts equal to the points available in their cards.
g) Seamless Online and Offline Experiences - Another strategy that companies are
practicing these days is offering seamless online experience. Now customers can get their
desired products and services just in one click. They do not even have to leave the comfort
of their chair and home or office. The online platform has provided retailers with an
opportunity to remain 24*7 in touch with the customers and serve them in a better manner.
h) Integrating Technology for Retaining Customers - With the advancement of technology,
more and more companies are integrating their operations with technology to deliver
better results. In this line, retailers are integrating technology into their daily operations.
The best example of this is the beacons. With the help of this device, retailers can
communicate with the customer's smart-phone while they go through the entire store.
Moreover, such devices also communicate relevant promotions and product details to the
customers.
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2.10 Total quality control (TQC)
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Armand Vallin Feigenbaum, an American quality control expert and businessman
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introduced the concept of Total Quality Control, later known as Total Quality Management
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(TQM). TQC is an effective system for integrating the quality development, quality
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TQC is the application of quality management principles to all areas of business from design to
delivery instead of confining them only to production activities. All divisions and all
employees become involved in studying and promoting TQC. It calls for team work.
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The successful implementation of the TQC strategy depends on several factors that
have to be considered by the companies. These factors are as follows –
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Actions must be guided by principles of continuous quality improvement;

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Decisions must be based on facts, data, and statistical information;

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• Organization members must be dedicated to serving extended customers;

• Quality progress must be measured against valid customer requirements; and
• Teamwork must be rewarded.
The positive impact of the TQC strategy arrives from the fact that this is a
management tool which is looking not only at the quality of the product but of every single
system in the company. The TQC concept affects positively inventory through reducing
rework and scrap and moving products through the plant more quickly. The mastering of the
TQC management strategy also increases facility's productivity, reduces costs, increases
market share, and enhances the overall profits of the company.

2.11 Total waste elimination

Any activity that does not add value to the product or service in the eyes of the
customer is a waste. Poor product design such as the inclusion of fancy functions not required
by the customer is a waste. A product design causing difficulty in manufacturing is a waste.
Standardization reduces the planning and control efforts, the number of parts, and the
inventory required. A poor product design without enough standardization leads to waste.
2.11.1 7-Wastes of Continuous Improvement
In addition to waste resulting from poor design, Toyota identifies seven examples of
waste resulting from poor manufacturing methods.
1. Waste of overproduction
Overproduction is the production of goods more than what are immediately needed.
Overproduction causes extra material handling, quality problems, and unnecessary inventories.
Consuming materials for unnecessary products may cause a shortage of material for other
products that are needed. Never overproduce products to keep men and machines busy. If the
required loading is less than the capacity, leave it alone. The labor can be switched to other
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departments, cleaning or maintaining the machines, accepting training and education, etc.
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2. Waste of waiting
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A material waiting in queue is a waste. An operator waiting for material or instruction
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and having no productive work to do is a waste.
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3. Waste of movement
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Poor plant layout results in materials having to be moved extra distances and cause
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unnecessary material handling costs. Work centers should be close to each other in order to
reduce the move distance. Someone may say that close work centers provide no room for WIP
inventories. That is fine! No room for WIP inventory forces the WIP to decrease.
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4. Waste of inventories
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Inventory causes costs of interest, space, record keeping, and obsolescence. Moreover,
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inventory can mask problems which could cause more inventory buildup. For example, WIP
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inventory between work centers can hide the symptoms of an unbalanced production rate.
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Finished goods inventory can mask poor forecasting, poor quality, and poor production
control. Inventory is not an asset; it is a waste!
5. Waste of motion
Improper methods of performing tasks by the operators cause wasted motions.
Reaching far for materials or machine buttons is a waste of motion. Searching for tools is a
waste of motion. Any activity that does not add value to the products should be eliminated.
Bad layout or training causes waste of motion.
6. Waste of making defects
The cost of scraps is a waste. But it is the least important compared with other wastes
caused by making defects. Defects interrupt the smooth flow of materials in the production
line. If the scrap is not identified, next workstation will try using it to produce more wastes, or
waste time waiting for good materials.

7. Waste of process itself
Bad process design is a waste. For example, wrong type or size of machines, wrong
tools, and wrong fixtures are wastes.
2.11.2 Principle of eliminating the wastes
The principle of eliminating the wastes includes:
1. All waste should be eliminated.
2. Waste can gradually be eliminated by removing small amounts of inventory from the
system, correcting the problems that ensue, and then, removing more inventory.
3. The customers' definitions of quality should drive product design and manufacturing
system.
4. Manufacturing flexibility is essential to maintain high quality and low cost with an
increasingly differentiated product line.
5. Mutual respect and support should exist among an organization, its employees, its
suppliers, and its customers.
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6. A team effort is required to achieve world class manufacturing capability.
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7. The employee who performs a task is the best source of suggested improvements.
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2.12 Total employee involvement

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Employee involvement is the concept of using the experience, creativity, and

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intelligence of all employees by treating them with respect, keeping them informed, and
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including them and their ideas in decision making processes. Each individual in a company is
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an important asset. Education and training are frequently conducted to enhance the capability
of the employees. it is the direct participation of staff to help an organization fulfil its mission
and meet its objectives by applying their own ideas, expertise, and efforts towards solving
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problems and making decisions. this ensures the regular participation of employee in deciding
how work is done, making suggestion for improvement, goal setting, planning and monitoring
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of their performance.
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Objectives of worker’s participation in management are:

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1. To achieve industrial peace.

2. To motivate workers.
3. To make managing the subordinates easy.
4. To minimize the number of grievance and therefore industrial disputes.
5. To satisfy workers by making they feel that they have their voice in management.
2.12.2 Types of employee involvement:
Employee involvement in management may take many forms. They are discussed below.
1. Formal involvement : Formal involvement of workers is to a some extent is recognized by
the management usually through an union. Workers and management may work together
to find solutions for accident prevention, elimination of waste and defective work,
attendance and absenteeism, employee insurance plans etc. Formal Participation has 2
types. They are

a) Ascending involvement : In Ascending type of participation, the elected
representatives of workers participate in managerial decisions at higher levels.
b) Descending involvement : In Descending type of participation, of workers participate
in planning and deciding their own work. For example a forman taking a decision to
reduce absenteeism of workers.
2. Informal involvement : Informal participation need not be recognized by the management.
This type of participation is usually at the work-group level.
Conditions for success of employee involvement in management :
1. There must be proper understanding between management and workers.
2. Workers should be allowed to express themselves.
3. Participation of workers should not affect his job.
4. Discussions should be frank and free without any reservation.
The employee involvement model was developed by Tannenbaum and Schmidt in the year
1958 acts as an effective guide for the accomplishment of the employee involvement. The
model provides the method which the organization is involved in the decision making process.
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There are four levels which the organizations follow depending on the mode of operation.
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1. Tell: In the telling kind of the leadership the leader makes the decision without the
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consultation and informs the decision to the staff. The tell kind of strategy is useful on
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strategies like the safety concerns, government legislations and for the decisions that do
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not require any employee input.

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2. Sell: In the sell strategy, the decision is taken by the company and then an attempt is made
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to communicate the decision so as to gain commitment from the staff. This strategy is
used when the employees do not have much influence over the decision, but there is a
requirement of complete employee commitment.
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3. Consult: In the employees are invited to pool in their opinions about the decision however
the final decision authority rests with the supervisor himself.
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4. Join: In this the employee and the supervisors take the decision in consensus. Both of
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them have an equal voice in the decision making process.

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Employee empowerment is defined as giving employees authority and responsibility to

make decisions about their work without supervisory approval. This helps to improve
employee motivation, job satisfaction and loyalty to the organization. This also promotes
employee-customer relations. Objective of employee empowerment is for achieving
organizational goals & objectives.

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Total Quality Management

For 8th semester B-Tech. students (Global Elective)

As per APJ Abdul Kalam Technological University syllabus, 2015

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Our special thanks to Prof. Jayasree S, HOD, Department of Mechanical Engineering,

We are obliged to all the staff members of Department of Mechanical Engineering of

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1.5.4 Pareto charts or Pareto diagram................. 20

2.11 Total waste elimination ............................58

2.11.1 7-Wastes of Continuous Improvement ......... 58

1.6 Cost of quality .......................................... 24

2.12 Total employee involvement.....................59

1.6.2 Goal of Quality Cost System ........................ 26

3.1.2 Quality assurance vs Quality control .......... 62

2.2 TQM Framework ..................................... 32 64

(EFQM) model TQM ................................................. 34 3.2.1 Objectives of Vendor rating ........................ 65

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4.6.4 Types of Requirements................................. 108

4.6.5 Application area of QFD ............................. 108

4.6.6 Steps involved in QFD process .................... 109

4.6.8 Steps to the House of Quality....................... 111

5.1.1 Characteristics of Six Sigma........................ 122

5.1.4 Six Sigma - Methodology ............................. 124

Six Sigma Training .................................................... 126

5.1.6 Application of Six Sigma in various Industries

5.2 Failure Mode and Effect Analysis (FMEA)

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means beautiful eyes” (cosmetics) are example.

2. Product-Based View: Product based definitions are different. Quality is viewed as

quantifiable and measurable characteristics or attributes. For example durability or reliability

benchmark for measurement may be misleading.

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‘excellence’ is similar to the ‘traditional’ definition and identifies the component of

only attainable in limited circumstances. The best is required in order to achieve

by the producer and can be described as ‘conformance to standards’.

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The transformative view of quality is rooted in the notion of ‘qualitative change’, a

experiences an increase of temperature. Whilst the increase in temperature can be measured

the transformation involves a qualitative change.

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promotes the importance of interim improvements.

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work required, ill-maintained machines from which is demanded maximum output

13. Institute a Vigorous Programme of Education and Self-Improvement - Integrate and

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individual is the loser - neither has realised their full potential.

the very visibility that crisis management provides.

5. Running the Company on Visible Figures Alone - A company cannot be successful on

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6. High medical costs

commitment to quality were needed to combat

Profound Knowledge. This is, perhaps, the least

Appreciation of a system depends on quality leaders’ understanding the interconnectedness

aim for the good of all.

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4. ACT: Institutionalization of process improvement requires Do

more that just selecting a strategy. Check

1.3 Juran's Contribution and Principles PDCA Cycle

been revised several times and continues to be a popular reference.

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1.3.2. Cost of Quality:

i. Quality planning - In the planning stage, it