Module l

Topics: Theories, Principles and Concepts of Total Quality Management

History of Total Quality Management
Quality Gurus of Total Quality Management
Elements of Total Quality Management

I . LESSON / MODULE OBJECTIVES:

1. Understand the principles of TQM in both theories and practice.

2. Identify and explain the basic concepts of TQM.
3. Explain the different principles of quality gurus.
4. Describe the eight key elements of total quality management.
5. Define the role of leadership in building a foundation of ethical standards in the organization
6. Appreciate the best practices of different companies in line with total quality management.

II . OVERVIEW / INTRODUCTION

One of the most important factors determining the success of a business is quality. Quality is always
considered when customers purchase the business’s goods and services. In fact, in some cases, quality gets
prominence over price as well. Offering good quality of products and services gives every organization a
strong edge over its competitors. It also rewards the business with customer patronage, word of mouth and
goodwill making total quality management important.

Definitions of Total Quality Management

Total Quality Management (TQM) refers to management methods used to enhance quality and
productivity in business organizations. TQM is a comprehensive management approach that works
horizontally across an organization, involving all departments and employees and extending backward
and forward to include both suppliers and clients/customers.

TQM is a management philosophy that helps to focus every organizational function towards meeting the
needs of the consumer and achieving predefined corporate objectives. The different units in the
company (marketing, finance, sales, design, engineering, manufacturing, and even customer service) are
geared towards continuous improvement, and according to TQM, the organization is applied to a
collection of processes.
TQM is a continuous process of improvement for individual, groups as well as the entire organization,
whereby managers attempt to change the organization’s way of working by developing people’s
knowledge about what to do, how to do, doing it with the right methods and measuring the
improvement of the process and the current level of achievement.

Total Quality Management (TQM) is a business management strategy aimed at embedding awareness of
quality in all organizational processes.

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Total Quality Management, TQM, is a method by which management and employees can become involved in the
continuous improvement of the production of goods and services. It is a combination of quality and management
tools aimed at increasing business and reducing losses due to wasteful practices.

Total quality management is an approach that first originated in the 1950s and became popular in the
early 1980s. It is a continuous effort of an organization in which the management and employees ensure
customer satisfaction and customer loyalty by being completely involved in the production of goods and
services that satisfy their customers.

The History of TQM

1920s • Some of the first seeds of quality management were planted as the principles of
scientific management swept through U.S. industry.
• Businesses clearly separated the processes of planning and carrying out the plan,
and union opposition arose as workers were deprived of a voice in the conditions
and functions of their work.
• The Hawthorne experiments in the late 1920s showed how worker productivity could
be impacted by participation.

1930s • Walter Shewhart developed the methods for statistical analysis and control of quality.

1950s • W. Edwards Deming taught methods for statistical analysis and control of quality to
Japanese engineers and executives. This can be considered the origin of TQM.
• Joseph M. Juran taught the concepts of controlling quality and managerial
breakthrough.
• Armand V. Feigenbaum’s book Total Quality Control, a forerunner for the present
understanding of TQM, was published.
• Philip B. Crosby’s promotion of zero defects paved the way for quality improvement
in many companies.

1968 • The Japanese named their approach to total quality "companywide quality control." It
is around this time that the term quality management systems arises.
• Kaoru Ishikawa’s synthesis of the philosophy contributed to Japan’s ascendancy as
a quality leader.

Today • TQM is the name for the philosophy of a broad and systemic approach to managing
organizational quality.
• Quality standards such as the ISO 9000 series and quality award programs such as
the Deming Prize and the Malcolm Baldrige National Quality Award specify
principles and processes that comprise TQM.
• TQM as a term to describe an organization's quality policy and procedure has fallen
out of favor as international standards for quality management have been
developed. Please see our series of pages on quality management systems for
more information.

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 The Quality Gurus, their principles and contributions to total quality management

Meaning of Guru

guru

gu·ru | \ ˈgu̇ r-(ˌ)ü , ˈgü-(ˌ)rü also gə-ˈrü \

plural gurus

A. a personal religious teacher and spiritual guide in Hinduism

B. a teacher and especially intellectual guide in matters of fundamental concern has been
a guru to many young writers
C. one who is an acknowledged leader or chief proponent became the guru of the movement
D. a person with knowledge or expertise : EXPERT a computer guru

Philip Crosby:

The Four Absolutes of Quality Management with Kanban

• Quality is conformance to requirements

• Quality prevention is preferable to quality inspection
• Zero defects is the quality performance standard
• Quality is measured in monetary terms – the price of non-conformance

14 Steps to Quality Improvement:

1. Management is committed to quality – and this is clear to all

2. Create quality improvement teams – with (senior) representatives from all departments.
3. Measure processes to determine current and potential quality issues.
4. Calculate the cost of (poor) quality
5. Raise quality awareness of all employees
6. Take action to correct quality issues
7. Monitor progress of quality improvement – establish a zero defects committee.
8. Train employees in quality improvement
9. Hold “zero defects” days
10. Encourage employees to create their own quality improvement goals
11. Encourage employee communication with management about obstacles to quality
12. Recognize participants’ effort

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 13. Create quality councils
14. Do it all over again – quality improvement does not end

Dr. Edwards Deming

Deming’s Fourteen

1. Create constancy of purpose for improvement of product and service. Allocate resources to provide for long range
needs rather than only short term profitability
2. Adopt the new philosophy. We can no longer live with commonly accepted levels of delays, mistakes, defective
materials, and defective workmanship.
3. Cease dependency on mass inspection to achieve quality. Quality is achieved by building quality into the product
in the first place.
4. End the practice of awarding business on the basis of price tag alone. The aim is to minimize total cost, not
merely initial cost. Establish long term relationship with suppliers to develop loyalty and trust.
5. Improve constantly and forever every process for planning, production, and service. It is management’s job to
work continually on improving total system.
6. Institute training on the job for all, including management, to make better use of every employee. New skills are
required to keep up with changes in products and processes.
7. Adopt and institute leadership aimed at helping people do a better job. Management must ensure that immediate
action taken on issues that are detrimental to quality.
8. Drive out fear so that everybody may work effectively and more productively for the company.
9. Break down barriers between departments and staff areas. Everyone must work together to tackle problems that
may be encountered with products or service.
10. Eliminate slogans and exhortations for the work force as they create adversarial relationships. Also, bulk of the
causes of low quality & productivity belong to the system and lie beyond the power of the work force.
11. Eliminate arbitrary numerical targets for the workforce and management. Substitute aids and helpful leadership
in order to achieve continual improvement.
12. Remove barriers that rob people of pride of workmanship. This includes the annual appraisal of performance and
Management by Objective.
13. Encourage education. Institute a vigorous program of education and self-improvement for everyone
14. Clearly define top management’s permanent commitment to ever improving quality and productivity. Put
everybody in the company to work to accomplish the transformation. Support is not enough, action is required.

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 Dr. Armand Feigenbaum

• Developed Total Quality Control (TQC) philosophy

• Quote: “Quality is everybody’s job, but because it is everybody’s job, it can become nobody’s job without the
proper leadership and organization.”

Steps to quality:

• Quality leadership
• Modern quality technology
• Organizational commitment

Dr. Kaoru Ishikawa

• Known as father of Japanese quality control effort

• Established concept of Company Wide Quality Control (CWQC) – participation from the top to the bottom of an
organization and from the start to the finish of the product life cycle
• Started Quality Circles – bottom up approach – members from within the department and solve problems on a
continuous basis
• The fishbone diagram is also called Ishikawa diagram in his honor
• Introduced concept that the next process is your customer

Dr. Joseph Juran

Juran’s Quality Trilogy (compared to financial management):

• Quality planning (financial budgeting) – create process that will enable one to meet the desired goals
• Quality control (cost control) – monitor and adjust the process
• Quality improvement (profit improvement) – move the process to a better and improved state of control through
projects.

Key points of Juran’s approach to quality improvement:

• Create awareness of the need for quality improvement
• Make quality improvement everyone’s job
• Create infrastructure for quality improvement
• Train the organization in quality improvement techniques
• Review progress towards quality improvement regularly

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• Recognize winning teams
• Institutionalize quality improvement by including quality
• Concentration on both external and internal customers

Dr. Walter Shewhart

• Shewhart’s control charts are widely used to monitor processes. Problems are framed in terms of special cause
(assignable cause) and common cause (chance-cause).
• The Shewhart Cycle – PDCA Problem Solving Process:
• Plan – what changes are desirable? What data is needed?
• Do – carry out the change or test decided upon
• Check – observe the effects of the change or the test
• Act – what we learned from the change should lead to improvement or activity
• Referred to as the “Father of Statistical Quality Control”

Dr. Genichi Taguchi

• The lack of quality should be measured as function of deviation from the nominal value of the quality
characteristic. Thus, quality is best achieved by minimizing the deviation from target (minimizing variation).
• Quality should be designed into the product and not inspected into it. The product should be so designed that it is
immune to causes of variation.

Taguchi recommends a three-stage design process:

System Design (Stage 1):
• development of a basic functional prototype design
• determination of materials, parts and assembly system
• determination of the manufacturing process involved

7 Important Principles of Total Quality Management

Total Quality Management (TQM) is an approach that organizations use to improve their internal processes and
increase customer satisfaction. When it is properly implemented, this style of management can lead to decreased
costs related to corrective or preventative maintenance, better overall performance, and an increased number of
happy and loyal customers.

However, TQM is not something that happens overnight. While there are a number of software
solutions that will help organizations quickly start to implement a quality management system, there are
some underlying philosophies that the company must integrate throughout every department of the

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company and at every level of management. Whatever other resources you use, you should adopt these
seven important principles of Total Quality Management as a foundation for all your activities.

1. Quality can and must be managed

Many companies have wallowed in a repetitive cycle of chaos and customer complaints. They believe
that their operations are simply too large to effectively manage the level of quality. The first step in the
TQM process, then, is to realize there is a problem and that it can be controlled.

2. Processes, not people, are the problem

If your process is causing problems, it won’t matter how many times you hire new employees or how
many training sessions you put them through. Correct the process and then train your people on these
new procedures.

3. Don’t treat symptoms, look for the cure

If you just patch over the underlying problems in the process, you will never be able to fully reach your
potential. If, for example, your shipping department is falling behind, you may find that it is because of
holdups in manufacturing. Go for the source to correct the problem.

4. Every employee is responsible for quality

Everyone in the company, from the workers on the line to the upper management, must realize that
they have an important part to play in ensuring high levels of quality in their products and services.
Everyone has a customer to delight, and they must all step up and take responsibility for them.

5. Quality must be measurable

A quality management system is only effective when you can quantify the results. You need to see how
the process is implemented and if it is having the desired effect. This will help you set your goals for the
future and ensure that every department is working toward the same result.

6. Quality improvements must be continuous

Total Quality Management is not something that can be done once and then forgotten. It’s not a
management “phase” that will end after a problem has been corrected. Real improvements must occur
frequently and continually in order to increase customer satisfaction and loyalty.

7. Quality is a long-term investment

Quality management is not a quick fix. You can purchase QMS software that will help you get things
started, but you should understand that real results won’t occur immediately. TQM is a long-term
investment, and it is designed to help you find long-term success.

Before you start looking for any kind of quality management software, it is important to make sure you
are capable of implementing these fundamental principles throughout the company. This kind of
management style can be a huge culture change in some companies, and sometimes the shift can come

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 with some growing pains, but if you build on a foundation of quality principles, you will be equipped to make this
change and start working toward real long-term success.

Key elements of Total Quality Management:

In order to implement total quality management successfully, an organization must concentrate on the
eight elements. These elements drive the force behind improvement, leadership, design and planning
initiatives. These are:

In order to implement total quality management successfully, an organization must concentrate on the
eight elements. These elements drive the force behind improvement, leadership, design and planning
initiatives. These are:

1. Ethics
2. Integrity
3. Trust
4. Training
5. Teamwork
6. Leadership
7. Recognition
8. Communication

The eight elements are categorized into groups of four depending on their function. The groups are:

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1.Foundation:

The entire process of Total Quality Management lies on the foundation of the elements consisting of
ethics, integrity, and trust. TQM involves every employee in this level irrespective of their designation.

Ethics:

Ethics is an element that is concerned with the understanding of the good and bad in any situation at
the workplace. It is a subject related to the organization as well as the individual. Ethics of an
organization set up the business code which outlines the guidelines that every employee is expected to
follow. The individual ethics incorporate the rights and wrongs.

Integrity:

Integrity is an element which refers to the morals, honesty, values, and sincerity of an individual in the
organization. It involves respecting fellow workers and the policies of the organization. This is one of the
important characteristics for which the customers expect.

Trust:

The by-product of ethical conduct and integrity is trust. The framework of Total Quality Management
cannot be built without trust. It stimulates complete participation of all members in the organization. It
improves the relationship among employees which helps in better decision making. It also promotes
continuous improvement by individual risk-taking.

2. Building bricks:

Based on the foundation of ethics, integrity, and trust, bricks are a collection of elements which are
placed in order to reach the roof of recognition. The elements of the building bricks include:

Training:

To be highly productive, employees must be trained. This responsibility falls solely on the supervisors
who are responsible for implementing Total Quality Management in their respective departments.
Employees must be trained under decision making, problem-solving, interpersonal skills, technical skills,
and business economics. This is done so that the employees can work effectively and produce efficient
results.

Teamwork:

Teamwork is a crucial element of TQM. It helps the business to receive effective and efficient solutions
to the problems. Teams also provide a permanent improvement in process and operation. TQM
organizations usually adopt three types of teams. They are:

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• Quality improvement team: Also known as excellence teams whose purpose is to deal with the problems
that recur often. They are set up for 3 to 12 months.
• Problem-solving team: These teams are set up to solve certain problems and also to identify the root
cause of those problems. They usually last from 1 week to 3 months.
• Natural work team: These teams consist of a group of skilled individuals who share responsibilities and
tasks. They usually work for an hour to two every week.

Leadership:

Leadership is a quality trait of a person who provides an inspiring vision to the team and sets strategic
directions to be understood by all. This is one of the crucial elements which must be constructive,
effective and positive.

3. Binding mortar:

Binding mortar is an element which binds all the other elements together. The key element of this
category is Communication.

Communication:

Communication binds the organization together and is the core element of success. It is necessary to
make sure that all the levels of communication among the suppliers, member and the customers are
kept open. The communication among employees or the members of the organization is done in three
ways. They are:

• Downward communication: Downward communication is the central form of communication in any

organization. It is basically done through discussions and presentations.
• Upward communication: Upward communication provides a platform to build trust amongst the
employees and the supervisors.
• Sideways communication: This type of communication takes place among various departments. It allows
dealing with customers and suppliers in a professional way and helps break down the barriers between
the departments.

4. Roof:

The roof consists of a final element which tops off all the other elements of TQM. It is called recognition.

Recognition

This element involves the suggestions and achievements for the teams and the individuals including
positive feedback and encouragement. Every employee seeks recognition and it is the duty of the

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supervisor to detect and recognize the contributors and motivate them. This increases self-esteem and
boosts performance and morale in an individual.

These elements help an organization to effectively implement total quality and ensure they meet all the
requirements of its customers. This helps them to focus on customer satisfaction and can help in the
growth of the organization.

Various tools can be used to implement TQM such as PDCA cycle, fishbone diagrams, histograms etc.
These tools help can be used in any situation and can provide efficient outputs when used correctly.

III. EVALUATION ACTIVITIES

1. Identify the best practices of the following companies in relation to Total Quality
Management:
a. Motorola
b. Toyota Motor Company
c. Ford Motor Company
2. Analyze the impact of quality in the success of business.
3. Discuss the role of the following key players in total quality management
a. Customers
b. Suppliers
c. Employees
4. Discuss the importance of the principles and contribution of the quality gurus.
5. Explain the significance of the concept of total quality management from Western and
Japanese approach.
6. Define the role of leadership in building a foundation of ethical standards in the
organization.
7. Explain how can organizations implement total quality management successfully.

IV. Summary

Success is the hallmark of practicing Total quality management. It provides long lasting solutions to the
organizations plagued with problems of defects, high costs on accounts of rework and waste, and
delayed delivery of products and services and the like. TQM demands organizations in every sector to
focus on customer, by involving every employee in their process improvement projects. It is a concept
and strategy that leads to economic performance, improved employee morale, customer satisfaction,
increased market share and above all a deserving pride amongst their employee.

Total quality management is an approach that first originated in the 1950s and became popular in the
early 1980s. It is a continuous effort of an organization in which the management and employees ensure

11
customer satisfaction and customer loyalty by being completely involved in the production of goods and
services that satisfy their customers.

It is a combination of management and quality tools that focus on increasing the business prospects and
reducing the losses caused by uneconomical practices. Total quality is a collection of attitude,
organization, and culture of the company. It is infinitely adaptable and variable. It uses a set of tools and
techniques for process improvement called six sigma. It is one of the widely used processes in which
99.96% produced results are expected to be defect free. Many companies including Motorola, Toyota
Motor Company, Ford Motor company etc. have implemented Total Quality Management.

V. References:

Total Quality Management Total Quality Management from Wikipedia

Subburaj Ramasamy Internet - Smartsheet
McGraw-Hill International Edition Internet – Reference for Business

Reviewed: Approved:

JAY SASUMAN, MBA ENGR. SHARON ROSE B. ALBAYDA, PhD

Program Head Dean

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 Module II
Concept of Quality
Week 5-8

I. LESSON/MODULE OBJECTIVES:
At the end of this course, the student should be able to:
1. Discuss what is quality.
2. Identify the different dimensions of quality.
3. Explain the importance of quality.
4. List down factors affecting quality.

II. OVERVIEW/INTRODUCTION
Quality is an important aspect for any organization. Government, non-government and
private sector organizations consider the quality of goods or services as a prerequisite for
achieving their stated objectives. The uniqueness of goods and services that give satisfaction to
the consumers or service recipients.
Quality is progressively focused on the production of good goods and services at more
competitive prices. Quality is the totality of features and characteristics inherent in a product or
service that has the potential to satisfy a specified or implied need. The quality of a good or
service is assured compared to other goods or services. In this sense, quality can be both good
and bad, but overall quality is considered to be the good features and characteristics of a good
or service. Quality plays a crucial role in the marketing of goods and services. There is a close
relationship between the quality of the goods and services and the satisfaction of the consumer
or the customer. Similarly, if the quality of goods or services of the concerned organization is
good, it will directly help the organization to achieve the expected achievements.

Dimensions of Quality

The dimensions mentioned by David A. Garvin regarding quality are as follows:

Performance: The performance level of a goods or service determines the quality. For
example, the clarity of the picture on the television, the clarity of the sound
on the radio, etc., ensures the level of performance.
Features: Features inherent in goods or services also contribute to quality. Such as -
disc brakes on motorbikes, automatic arrangements, etc.
Reliability: Trust and reputation towards the goods or services also helps to ensure
quality.
Conformance: The uniformity or similarity established in the structure, texture, etc. of the
goods or services determines the quality of the goods or services.

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 Durability: Quality is determined on the basis of durability and sales of a goods or
services in the market.
Service ability: If the goods or services can be used through proper repair and
maintenance, such goods or services are considered quality.
Aesthetics: Goods and services that can attract more consumers are also tends to be
good quality.
Perceived quality: In relation to goods or services, the quality should be maintained as
expected by the customer, consumer or service recipient and such
customers should also have experienced the quality.

Importance of Quality

Quality is considered extremely important for any organization. It is only possible to satisfy
the consumers or the service recipients only if the quality of the goods or services provided by
the government, non-government and private sector organizations is good. Some of the
importance of the quality are:

• Competition
• Productivity
• Cost
• Support to marketing
• Reliability etc.

Factors Affecting Quality

The factors that affect the quality of goods or services produced by any organization are as
follows: -

Human Resources: - Maintaining the quality of goods or services depends on the qualifications
and efficiency of the employees working in the organization. It is only
possible to increase the quality of goods or services if performance of
employees is high.
Institutional Commitment: - It is necessary to have strong commitment from the management
and employees of the organization to maintain the desired quality of their
goods or services. Organizational culture should also be quality oriented.
Materials: - Goods used in the flow of goods and services also affect the quality determination.
Therefore, it is important to use good quality materials.
Machines and equipment: - The quality of the machines and tools used in the production of
goods and services is also affected by the use of new ones instead of the
old ones.
Procedures and technology: - The quality of goods or services can be determined by the use of
appropriate procedures and good mechanical technology.

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New Innovation: - Innovative activities such as research, development and analysis have an
impact on determining the quality of goods or services.
Standards: - Standards can maintain the desired quality.
Control system: Positive control system can also achieve the desired quality.

It seems possible to achieve quality if used in such a way that positive results come from the
above elements.

Similarly, in order to achieve quality, the following points can also be considered. Such as;

• Continuity of objectives for improvement

• Adoption of new philosophy
• Information and statistical evidence
• Clear recognition of quality
• Improvement in every working system
• Improvement of work training
• Institutional leadership development
• Overcoming fears
• Eliminating barriers
• Modern management structure
• Customer / service recipients
• Demand addressing
• Fast and quality service flow etc.

III. SUMMARY
Businesses that offer premium quality products and services usually have large market shares
and are early entrants into their markets. Quality does not cost time. Quality is positively and
significantly related to a higher return on investment for almost all kinds of products and
market situations. Companies with superior relative quality receive almost three times the
return on investment (ROI) as compared with those companies with inferior relative quality.
IV. EVALUATION ACTIVITIES

1. Discuss why product quality is an important determinant of business profitability?

2. Define quality according to the following;
a. Toyota
b. Ford
c. Krispy Kreme
d. McDonald
e. Jollibee Foods Corporation

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 Module III
Topic: Seven Quality Control Tools
Week 9-10

I. LESSON/MODULE OBJECTIVES:

At the end of this course, the student will be able to:

1. Give a basic description of the seven quality control tools of TQM.
2. Identify issues related to quality where the seven tools can be applied.
3. Discuss the importance of the seven quality control tools.
4. Discuss the uniqueness of each of the seven quality control tools.

II. OVERVIEW/INTRODUCTION
The seven quality control tools are structured and fundamental instruments that
help businesses improve their management and production process for achieving enhanced
product quality. From assessing and examining the production process, identification of key
challenges and problems to controlling the fluctuation present in the product quality and
providing solutions for prevention of defects in future, the easy to understand and implement,
the quality control tools are very effective. The following are some of the major business
benefits of the quality control tools:

• Provides a more structured path for problem-solving and quality improvement

• Easy to understand as well as implement yet extremely effective
• A scientific and logical approach for problem-solving
• Follows the 80/20 rule i.e. gain 80% result with 20% efforts
• Improve the quality of product and services
• Helps in identifying and analyzing problems during the process

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 • Fishbone training aides in root cause analysis and problem-solving
• Encourages team spirit and fosters a healthy culture
• Identifies roots cause and solve it permanently
• Enhance customer experience and customer satisfaction
Seven (7) Management Tools for Quality

Different tools are used for different problem-solving opportunities, and many of the
tools can be used in different ways.

1. Flowchart

Most of us are familiar with flowcharts. You have seen flowcharts of reporting
relationships in organizational structures. Flowcharts are also used to document work process
flows. This tool is used when trying to determine where the bottlenecks or breakdowns are in
work processes. Flow-charting the steps of a process provides a picture of what the process
looks like and can shed light on issues within the process. Flowcharts are also used to show
changes in a process when improvements are made or to show a new workflow process.

This example provides a picture so those checking children in will know the steps each
takes depending on whether it is their first time or a child who has been there before.

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Example Flowchart

2. Check Sheet

A check sheet is a basic quality tool that is used to collect data. A check sheet might be
used to track the number of times a certain incident happens. As an example, a Human
Resource Department may track the number of questions by employees, per category, per day.

In this particular check sheet, the tool shows the total number of questions received by the
human resources department.

This information helps that department identify opportunities to proactively share information
with employees in an effort to reduce the numbers of questions asked.

Example Check Sheet

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3. Cause and Effect (fish bone) Diagram

A cause and effect diagram, also known as a fish-bone diagram shows the many possible
causes of a problem. To use this tool, you need to first identify the problem you are trying to
solve and simply write it in the box (head of the fish) to the right.

Next, you will list the major causes of the problem on the spine of the fish. Causes are
typically separated into categories of people, process, materials and equipment. Causes are
then identified through brainstorming with a group familiar with the problem. Once all of the
possible causes are identified, they can be used to develop an improvement plan to help
resolve the identified problem.

Example Cause and Effect (Fish Bone) Diagram

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4. Pareto Chart

A Pareto chart is a bar graph of data showing the largest number of frequencies to the smallest. When
you look at the number of defects from the largest to the smallest occurrences, it is easy to see how to
prioritize improvements efforts. The most significant problems stand out and can be targeted f

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Example Pareto Chart

5. Control Charts

Control charts or run charts are used to plot data points over time and give a picture of the
movement of that data.

These charts demonstrate when data is consistent or when there are high or low outliers in the
occurrences of data.

It focuses on monitoring performance over time by looking at the variation in data points.

And it distinguishes between common cause and special cause variations. The Dow Jones
Industrial Average is a good example of a control chart.

Example Control (Run) Charts

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6. Histograms

Histograms are bar chart pictures of data that shows patterns that fall within typical process
conditions.

Changes in a process should trigger new collection of data.

A minimum of 50-75 data points should be gathered to ensure an adequate number of data
points have been collected.

The patterns that are detected demonstrate an analysis that helps understand variation.

In this example, it shows that the receptionist received the most phone calls about contribution
statements for that period.

Example Histogram

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7. Scatter Diagrams

Scatter diagrams are graphs that show the relationship between variables. Variables often
represent possible causes and effect.

As an example, a scatter diagram might show the relationship between how satisfied
volunteers are that attend orientation training.

The diagram shows the relationship between volunteer satisfaction scores and volunteer
orientation training.

Example Scatter Diagram

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Each of these quality tools has unique advantages for certain situations. And, not all tools are
used for all problem-solving.

Once a tool is learned, it can be adapted to different problem-solving opportunities.

When creating products, providing services, and achieving results, consistency is the goal of
quality management. It is achieved through the consistent application of the tools and
techniques associated with the processes of quality planning, control quality, and quality
assurance. An effective project manager must be familiar with and have an excellent working
understanding of the tools and techniques of quality, and should strive for continuous
improvement of the related processes. Only then will the work consistently lead to true
customer satisfaction.

III. SUMMARY

Once a tool is learned, it can be adapted to different problem-solving opportunities.

When creating products, providing services, and achieving results, consistency is the goal of
quality management. It is achieved through the consistent application of the tools and

24
techniques associated with the processes of quality planning, control quality, and quality
assurance. An effective project manager must be familiar with and have an excellent working
understanding of the tools and techniques of quality, and should strive for continuous
improvement of the related processes. Only then will the work consistently lead to true
customer satisfaction.

1. List down 5 food industries where the seven quality control tools can be applied.
2. What quality control tool used by the following companies in addressing quality issues?
a. Chevrolet Trailblazer EXT
b. GMC Envoy
c. Isuzu Motors Ascenders

Module IV
Cost of Quality
Week 11-12

I. The Most Essential Learning Outcomes:

At the end of the course, students will be able to:
1. Understand the importance of creating a standard for quality
2. Identify the benefits of quality
3. Discuss the cost of good quality.

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 4. Discuss the cost of poor quality.
5. Analyze the cost of quality as a method of assessing its effectiveness and as a means of
determining problem areas, opportunities, savings and action priorities.

II. Introduction

The ultimate objective for any business is to make money. If you have a product that people will buy,
then you’ve got a business. However, the businesses that make the most don’t focus on the profits
alone. They also consider the quality of the products and services they offer because they know how
important it is to their customers. But why does quality hold so much weight?

To answer that question, it’s important to look at the definition of quality as it pertains to
customers. The standard definition of the word is “the degree to which a set of inherent characteristics
fulfills requirements.” For customers, those requirements include the following:

• Longevity – how long the product performs its function

• Needs Fulfillment – whether or not the product fulfills a specific need or solves a specific
problem for the customer
• Cost vs. Need – how much the product costs compared with how much the client wants or
needs it
• Security – the safety level of the product, i.e. whether or not the customer feels comfortable
using it
• Usability – the ease of use associated with the product
• Efficiency – the product’s ability to save the customer money, help the environment, or
streamline a process

These are just a few of the many requirements that customers expect from any given product.
Companies that fulfill this list often experience a multitude of benefits, but first they have to put in the
effort.

Here are some of the reasons why creating a standard of quality with your products is so important for
keeping customers:

Competition

In niche-specific companies, using quality products to beat the competition is essential. Because they’re
focused on selling just a few products, they need something that can set their products apart from the
competition. Overall, quality always sells better than other factors, like low pricing.

For example, Earth Lite, a company that sells massage-related products, has built their company on a
foundation of high quality products, marketing them as handmade with eco-friendly materials that are
superior to what you might find elsewhere. As a result, they’ve managed to claim the number one spot
in massage-related retail.

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Customer Expectations

At first, your customers will appreciate quality. Then, as they tell more people about it and continue
shopping, they’ll begin to expect such. After expectation comes a demand for quality products. And if
you don’t deliver, your customer will leave.

When your company offers quality products every time, you can create a standard of satisfying
customers in the retail spectrum. In return, you’ll receive loyalty and continued lead generation that
allows your company to grow.

Business Reputation

Quality and your company’s reputation are more closely linked than many businesses realize. When
your products don’t match the standard of quality that was promised, people will hear about it on social
media, through review sites, on forums, and from their friends.

Nike is a great example of a company that links its brand reputation with the quality of their products.
They’ve built their company on great marketing and products that stand the test of time. People know
they can trust Nike and are willing to pay more because their products provide the quality they’ve come
to expect.

Customer Loyalty

Customers always come back when a product is good, even if the price is high. A quality product creates
unshakeable customer loyalty that generates increased leads. When customers find a product they
trust, they return, make repeat purchases, and recommend the product or service to others.

Consider Apple’s success in selling more than 800 million devices to more than 130 million users in the
last year alone. Those numbers show that customers have bought multiple products from the retailer,
and they wouldn’t have that kind of success if people didn’t love the quality, even though their products
are considerably more expensive than other options.

In the end, product quality is something companies should always emphasize. Creating quality products
will continue to be the most important thing to customers. In a world where it’s hard to predict the
demands of customers, this is an important concept to master.

Cost of Quality (COQ)

The business climate is becoming increasingly more competitive. There are multiple options available to
the consumer for nearly every product on the market. Companies must stay price competitive to
survive. The top performing companies set themselves apart from the competition by listening to the
voice of the customer and providing products that meet the customer’s requirements while maintaining
a high level of quality and dependability. These companies measure Cost of Quality and use the
information gained to their advantage. The principle of Cost of Quality is similar to a commercial that
aired years ago on television that advertised oil filters. The tag line was “Pay Me Now or Pay Me Later”.
The message was that preventive maintenance of your vehicle could prevent more costly repairs down
the road.

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Cost of Quality is much the same. An organization can choose to invest in upfront quality costs to
reduce or prevent failures or pay in the end when the defect is eventually discovered by the customer.
In too many cases organizations choose the latter. Product failures can result in increased warranty
costs and possibly even product recalls. The impact to the bottom line can be devastating. In addition,
there are the hard to measure costs incurred through loss of brand equity and possible decline in future
sales. Cost of Quality can have an immense impact on a company’s bottom line, positive or negative.

How to Measure Cost of Quality (COQ)

The methods for calculating Cost of Quality vary from company to company. In many cases,
organizations like the one described in the previous example, determine the Cost of Quality by
calculating total warranty dollars as a percentage of sales. Unfortunately, this method is only looking
externally at the Cost of Quality and not looking internally. In order to gain a better understanding, a
more comprehensive look at all quality costs is required.
The Cost of Quality can be divided into four categories. They include Prevention, Appraisal, Internal
Failure and External Failure. Within each of the four categories there are numerous possible sources of
cost related to good or poor quality. Some examples of typical sources of Cost of Quality are listed
below.
The Cost of Good Quality (CoGQ)
1. Prevention Costs – costs incurred from activities intended to keep failures to a minimum (for
spotting processes that are beginning to generate defective goods). A focus on prevention tends to
reduce scrap costs, because the scrap never occurs. These can include, but are not limited to, the
following:
• Establishing Product Specifications
• Quality Planning
• New Product Development and Testing
• Development of a Quality Management System (QMS)
• Proper Employee Training
• Robust design
• Supplier Certification

Prevention Cost: Cost incurred to prevent (keep failure and appraisal cost to a minimum) poor quality. Example: New
product review, quality planning, supplier surveys, process reviews, quality improvement teams, education and training.

2. Appraisal Costs – costs incurred to maintain acceptable product quality levels. Appraisal costs also
determine the degree of conformance to quality requirements (measuring, evaluating or auditing,
include;
• Incoming Material Inspections
• Process Controls
• Check Fixtures
• Quality Audits
• Supplier Assessments

Example: Inspection, testing, process or service audits, calibration of measuring and test equipment.

The Cost of Poor Quality (CoPQ)

3. Internal Failures – costs associated with defects found before the product or service reaches the
customer. Internal Failures may include, but are not limited to, the following examples:

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 • Excessive Scrap
• Product Re-work
• Waste due to poorly designed processes
• Machine breakdown due to improper maintenance
• Costs associated with failure analysis

Internal Failure Cost: Cost associated with defects found before the customer receives the product or
service. Example: Scrap, rework, re-inspection, re-testing, material review, material downgrades

4. External Failures – costs associated with defects found after the customer receives the product or
service. External Failures may include, but are not limited to, the following examples:
• Service and Repair Costs
• Warranty Claims
• Customer Complaints
• Product or Material Returns
• Incorrect Sales Orders
• Incomplete BOMs
• Shipping Damage due to Inadequate Packaging

These four categories can now be applied to the original Cost of Quality equation. Our original equation
stated that the Cost of Quality is the sum of Cost of Good Quality and Cost of Poor Quality. This is still
true however the basic equation can be expanded by applying the categories within both the Cost of
Good Quality and the Cost of Poor Quality.
• The Cost of Good Quality is the sum of Prevention Cost and Appraisal Cost (CoGQ = PC + AC)
• The Cost of Poor Quality is the sum of Internal and External Failure Costs (CoPQ = IFC + EFC)
By combining the equations, Cost of Quality can be more accurately defined, as shown in the equation
below:
COQ = (PC + AC) + (IFC + EFC)
One important factor to note is that the Cost of Quality equation is nonlinear. Investing in the Cost of
Good Quality does not necessarily mean that the overall Cost of Quality will increase. In fact, when the
resources are invested in the right areas, the Cost of Quality should decrease. When failures are
prevented / detected prior to leaving the facility and reaching the customer, Cost of Poor Quality will be
reduced.

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 Summary of Total Cost of Quality

III. Learning Inputs

1. Lecture/Discussion
2. Quiz
3. Pre-final Exam
4. Assignment/Activity

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 Module V
Continuous Improvement
Week 13-14

I. The Most Essential Learning Outcomes:

At the end of the course, students will be able to:
1. Explain what is continuous improvement.
2. Discuss the concept of the “plan, do, check, act process”.
3. Discuss what is KAIZEN, the model and its culture of continuous improvement.
4. Explain value stream mapping and its importance.

II. Introduction

No process is perfect, there’s always room to improve.

Continuous improvement is a mindset whereby organizations strive to always be looking for

better ways to do things – this search for better ways of doing things lead to the evolution of products,
services and other aspects of the organization so they become more optimal and efficient over time.
Total quality management means gradual and continuous improvements of the processes within
the organization. It consists of finding new opportunities for improvements of process, improving them,
measuring improvement and then repeating the cycle again and again

KAIZEN Model of Continuous Improvement

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Kaizen

A Japanese word meaning ‘improvement, Kaizen’s ultimate goal is waste elimination. Its origins are in
post-WWII Japanese businesses but it now used worldwide.

Kaizen is a popular continual improvement strategy that has been around since the 1980s. This concept
helps focus on improvements that are based on making a lot of small changes rather than fewer larger
changes. The ideas for the changes typically come from the front-line employees rather than the
management team or other planning department. This is effective because those working on the front-
line are directly impacted by problems and will be able to more easily identify where improvements can
be made.

Some of the benefits of Kaizen include:

• Capital Investments - By focusing on smaller, incremental changes, the company doesn't

typically need to come up with significant capital resources to implement the changes.

• Engaged Workplace - By encouraging employees to contribute the improvement ideas, they

become more engaged.

• Long-term Improvement - Each small improvement made builds on previous improvements,

leading to a snowball effect.

5S tools of Kaizen

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 1. Seiri (sort)
2. Seiton (straighten)
3. Seiso (scrub)
4. Seiketsu (systematize)
5. Shitsuke (standardize)
Separate out all unnecessary things and eliminate them.
Arrange the essential things in order, so that they can be
easily accessed.
Keep machinery and working environment clean.
Make cleaning and checking as a routine practice
Standardize the previous four steps.

A continuous improvement strategy is any policy or process within a workplace that helps keep the focus
on improving the way things are done on a regular basis. This could be through regular incremental
improvements or by focusing on achieving larger process improvements.

Facilities that focus on improving continuously become more competitive over time and can maintain
their advantages in their industry, but only if the improvement efforts are done correctly. Taking good
baseline measurements and taking ongoing measurements will help identify the effectiveness of the
efforts being made.

Continual Process Improvement Model

Many strategies and methodologies can be used when focusing on continuous improvement. Finding
the right one for a given industry is important as it will help maximize the results. All the continual
improvement models, however, will focus on similar types of improvement, as seen in this image:

Making ongoing improvement in performance, commitment, strategy, and process all help build up the
company's bottom line. This image also illustrates that any improvements in these four categories will
also help build up improvement in the overall quality being produced by the facility.

Plan-Do-Check-Act

Another helpful concept is the "plan, do, check, act" process. This is a cyclical process that walks a
company or group through the four steps of improvement. By continuing to cycle through these steps,
improvement is always being worked on and evaluated.

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Each step builds on the previous step, and then feeds into the next.

• Plan - In the planning phase, teams will measure current standards, come up with ideas for
improvements, identify how those improvements should be implemented, set objectives, and
make the plan of action.

• Do - Implement the plan that was created in the first step. This includes not only changing
processes, but also providing any necessary training, increasing awareness, and adding in any
controls to avoid potential problems.

• Check - Taking new measurements to compare with those taken prior to the change is an
important step here. Analyze those results and take any corrective or preventative actions to
ensure the desired results are being achieved.

• Act - All the data from the change is analyzed by management teams to determine whether the
change will become permanent or if further adjustments are needed. The act step feeds into the
plan step since once a change has been fully implemented, it is time to begin looking for new
ways to make further improvement.

Improvement Strategies

The concept of continuous improvement is an umbrella term covering many methodologies used to
achieve the goal. Choosing the right strategies for a facility will help maximize results and ensure the
long-term success of the efforts. A facility can choose to have multiple continuous improvement
strategies in place at any given time. Different areas of the company, or even different departments
within an area, can each work off of a separate strategy to maximize results.

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Lean & Continuously Improving

Lean continuous improvement is a strategy designed to help eliminate waste throughout a company.
Waste is anything that doesn't add value for the customer. In many ways, this continuous process
improvement strategy works to eliminate problems rather than directly improve a process. The results
are similar, but by taking a waste-focused approach, it is often easier to come up with goals from which
improvement strategies can be developed.

Value Stream Mapping

Value stream mapping is one of the most important continuous improvement strategies because it can
be used within almost all others. This process looks at the design and flow of processes within a
company to see where value is being added. A value stream map can also be a great brainstorming tool
for areas that could be improved.

A good value stream map will be very detailed and formatted like a flow chart. It is utilized to help
isolate each of the steps in a process to see where value is being added and where it is not. This makes it
easier to eliminate or modify the areas where value is either missing or could be increased in the

35
process. The idea of value stream mapping was originally developed for manufacturing processes, but it
can be adapted to other industries as well.

III. Learning Inputs

5. Lecture/Discussion
6. Quiz
7. Pre-final Exam
8. Assignment/Activity
9. Video Presentation: youtube.com/watch?v=_go109ME
Youtube.com/watch?v=Wc6b16xuko
Youtube.com/watch?v=2SWfCf6b0vM
Youtube.com/watch?v=0dZYC2XPF2U

IV. Summary

There are many strategies and methodologies available to help companies implement continual
improvement. These are a great way to start since they offer guidance on taking those first steps, as well
as longer-term ideas for how to keep this strategy moving forward when it becomes more difficult.

Most companies don't strictly implement just one strategy, but rather adapt existing methodologies to
meet their specific needs. Using something like Lean as a base from which to build on can be a very
effective strategy to keep a facility focused on improvement strategies today and long into the future.

V. Evaluation

1. Discuss when to use the PDCA process. Give example.

2. Illustrate Kaizen in the following;
a. Toyota
b. Ford
c. General Motors

Sources

• https://en.wikipedia.org/wiki/Kaizen
• https://en.wikipedia.org/wiki/Total_quality_management

Reference:
Total Quality Management International Edition 2009
Subburaj Ramasamy

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 Module VI
Six Sigma
Week 15

I. The Most Essential Learning Outcomes:

At the end of the course, students will be able to:
1. Understand the importance of Six Sigma in making business processes more efficient and
effective.
2. Discuss the early adopters of Six Sigma.
3. Discuss the statistical tools to eliminate defects and to identify the cause of error.
4. Trace the roots/history of Six Sigma.
5. Discuss the methodologies of Six Sigma.
6. Explain the impact of people in implementing the Six Sigma.
7. Explain the principles and goals of Six Sigma.

II. Introduction

How Six Sigma Began

In the 19th century, German mathematician and physicist Carl Fredrich Gauss developed the bell curve.
By creating the concept of what a normal distribution looks like, the bell curve became an early tool for
finding errors and defects in a process.

In the 1920s, American physicist, engineer and statistician Walter Shewhart expanded on this idea and
demonstrated that “sigma imply where a process needs improvement,” according to “The Complete
Business Process Handbook: Body of Knowledge From Process Modeling to BPM Vol. 1” by Mark von
Rosing, August-Wilhelm Scheer and Henrik von Scheel.

In the 1980s, Motorola brought Six Sigma into the mainstream by using the methodology to create more
consistent quality in the company’s products, according to “Six Sigma” by Mikel Harry and Richard
Schroeder.

Motorola engineer Bill Smith eventually became one of the pioneers of modern Six Sigma, creating
many of the methodologies still associated with Six Sigma in the late 1980s. The system is influenced by,
but different than, other management improvement strategies of the time, including Total Quality
Management and Zero Defects.

37
Does it work? Motorola reported in 2006 that the company had saved $17 billion using Six Sigma.

What Six Sigma Means

Six Sigma is a set of management tools and techniques designed to improve business by reducing the
likelihood of error. It is a data-driven approach that uses a statistical methodology for eliminating
defects.

Six Sigma is a set of methods and tools for business process improvement and quality management. Six
Sigma aims to improve quality by finding defects, determining their cause, and improving processes to
increase the repeatability and accuracy of process results. By improving efficiency and decreasing
defects, the quality and timeliness of product delivery improves, and with it, ideally, employee
enthusiasm and confidence--and the company’s bottom line.

Experts credit Shewhart with first developing the idea that any part of process that deviates three sigma
from the mean requires improvement. One sigma is one standard deviation.

The Six Sigma methodology calls for bringing operations to a “six sigma” level, which essentially means
3.4 defects for every one million opportunities. The goal is to use continuous process improvement and
refine processes until they produce stable and predictable results.

Six Sigma is a data-driven methodology that provides tools and techniques to define and evaluate each
step of a process. It provides methods to improve efficiencies in a business structure, improve the
quality of the process and increase the bottom-line profit.

The Importance of People in Six Sigma

A key component of successful Six Sigma implementation is buy-in and support from executives. The
methodology does not work as well when the entire organization has not bought in.

Another critical factor is the training of personnel at all levels of the organization. White Belts and
Yellow Belts typically receive an introduction to process improvement theories and Six Sigma
terminology. Green Belts typically work for Black Belts on projects, helping with data collection and
analysis. Black Belts lead projects while Master Black Belts look for ways to apply Six Sigma across an
organization.

As for goals, Six Sigma seeks to:

• Find and eliminate causes of defects and errors

• Reduce cycle times and cost of operations
• Improve productivity
• Better meet customer expectations
• Achieve higher asset utilization
• Provided an improved return on investment

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 (viilanova.com/resources/six-sigma)

Methodologies of Six Sigma

Six Sigma Principles

There are five main principles of Six Sigma:

1. Customer focus

The main objective is to maximize the benefits for customers. Hence, a business must understand the
needs of their customers and the drivers of sales. It requires establishing quality standards according to
the market or customer demands.

2. Assess the value chain and find the problem

Outline the steps of a process to find out unwanted areas and gather related data. Define goals for data
collection, purposes for data gathering, and expected insights. Verify that the data is assisting in
achieving the objectives, whether more information is needed to be collected, or if data cleansing is
required. Find out the problem and its root cause.

3. Eliminate defects and outliers

After the identification of the problem, make appropriate modifications in the process to eliminate
defects. Eliminate any activity in the given process that does not contribute to the customer value. If
the value chain is unable to reveal the problem area, various tools are used to find out the problem
areas and outliers. Eliminating the outliers and defects removes the bottlenecks in a given process.

4. Involve stakeholders

A structured process should be adopted where all stakeholders collaborate and contribute to finding
solutions to complex issues. The team needs to achieve proficiency in the methodologies and principles
applied. Hence, specialized knowledge and training are required to lower project failure risks and ensure
optimal performance of the processes.

5. Flexible and responsive system

Whenever an inefficient or faulty process is eliminated, the employee approach and work practices need
to be changed. A flexible and responsive environment to the changes in processes can lead to the
efficient implementation of the projects.

39
The departments involved should be capable of adapting easily to the change. Companies that
periodically examine the data and make appropriate changes to their processes may achieve a
competitive advantage.

Methodologies of Six Sigma

There are two major methodologies used within Six Sigma, both of which are composed of five
sections, according to the 2005 book “JURAN Institute Six Sigma Breakthrough and Beyond” by Joseph A.
De Feo and William Barnard.

DMAIC: The DMAIC method is used primarily for improving existing business processes. The letters
stand for:

• Define the problem and the project goals

• Measure in detail the various aspects of the current process
• Analyze data to, among other things, find the root defects in a process
• Improve the process
• Control how the process is done in the future

DMADV: The DMADV method is typically used to create new processes and new products or services.
The letters stand for:

• Define the project goals

• Measure critical components of the process and the product capabilities
• Analyze the data and develop various designs for the process, eventually picking the best one
• Design and test details of the process
• Verify the design by running simulations and a pilot program, and then handing over the process
to the client

III. Learning Inputs

1. Lecture/Discussion
2. Assignment/Activity
3. Quiz
4. Final Exam
5. Video Presentation https://www.youtube.com/watch?v=wEBPVQ7W2wg
https://www.youtube.com/watch?v=4EDYfSl-fmc

IV. Summary

Six Sigma initiated by Motorola has given remarkable gains. GE and many other leading
companies in USA contributed to the evolution of six sigma. 6 sigma aims at controlling variations very
significantly. Six sigma is aimed at nearly eliminating wastes and rework and grammatically improving
profit margin.

40
 Six sigma provides a strict approach for improving the product and process quality. Six
sigma uses DMAIC and DMADV, which are modified Plan, Do, and ///check & Act cycles. A major
advantage of six sigma is that it is perceived to be a business system that improves the bottom-line.
One of the causes for the success of six sigma is that six sigma projects set ambitious targets to achieve
3.4 defects per million opportunities.

Six sigma implementation is top-down. The CEO is usually the driving force and top
management team provides a champion for each project. The champion is responsible for the success
of the project, providing necessary resources and breaking down organizational barriers. Involvement of
the upper management champions ensures that the projects will have a larger impact on the business.

V. Evaluation

1. Discuss what is Six Sigma according to the following:

a. Motorola
b. General Electric
c. Boeing
d. Toshiba
2. Identify and discuss the challenges of Six sigma.
3. Is Six Sigma a TQM? Discuss.

Reference/Source

Total Quality Management

Mc Graw-Hill International Edition 2009

41
 Module VII
ISO 9000
Week 16

I. The Most Essential Learning Outcomes:

At the end of the course, students will be able to:

1. Discuss the meaning and functions of ISO.
2. Trace the beginnings of ISO
3. Explain the objectives of ISO.
4. Identify the benefits of ISO to companies.

II. Introduction

ISO 9000 is defined as a set of international standards on quality management and quality
assurance developed to help companies effectively document the quality system elements needed to
maintain an efficient quality system. They are not specific to any one industry and can be applied to
organizations of any size.

ISO 9000 can help a company satisfy its customers, meet regulatory requirements, and achieve
continual improvement. It should be considered to be a first step or the base level of a quality system.

• ISO 9000 vs. 9001

• 30 years of ISO 9000
• ISO 9000 resources

ISO 9000 VS. 9001

ISO 9000 is a series, or family, of quality management standards, while ISO 9001 is a standard within the
family. The ISO 9000 family of standards also contains an individual standard named ISO 9000. This
standard lays out the fundamentals and vocabulary for quality management systems (QMS).

ISO 9000 series of Standards

The ISO 9000 family contains these standards:

• ISO 9001:2015: Quality Management Systems - Requirements

• ISO 9000:2015: Quality Management Systems - Fundamentals and Vocabulary (definitions)
• ISO 9004:2018: Quality Management - Quality of an Organization - Guidance to Achieve
Sustained Success (continuous improvement)
• ISO 19011:2018: Guidelines for Auditing Management Systems

ASQ is the only place where organizations can obtain the American National Standard Institute
(ANSI) versions of these standards in the ISO 9000 family.

42
ISO 9000 history and revisions: ISO 9000:2000, 2008, and 2015

ISO 9000 was first published in 1987 by the International Organization for Standardization (ISO), a
specialized international agency for standardization composed of the national standards bodies of more
than 160 countries. The standards underwent major revisions in 2000 and 2008. The most recent
versions of the standard, ISO 9000:2015 and ISO 9001:2015, were published in September 2015.

ASQ administers the U.S. Technical Advisory Groups and subcommittees that are responsible for
developing the ISO 9000 family of standards. In its standards development work, ASQ is accredited by
ANSI.

ISO 9000:2000

ISO 9000:2000 refers to the ISO 9000 update released in the year 2000.

The ISO 9000:2000 revision had five goals:

1. Meet stakeholder needs

2. Be usable by all sizes of organizations
3. Be usable by all sectors
4. Be simple and clearly understood
5. Connect quality management system to business processes

ISO 9000:2000 was again updated in 2008 and 2015. ISO 9000:2015 is the most current version.

ISO 9000:2015 principles of Quality Management

The ISO 9000:2015 and ISO 9001:2015 standards are based on seven quality management principles that
senior management can apply to promote organizational improvement.

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 ISO 9000 Quality Management Principles

1. Customer focus

• Understand the needs of existing and future customers

• Align organizational objectives with customer needs and expectations
• Meet customer requirements
• Measure customer satisfaction
• Manage customer relationships
• Aim to exceed customer expectations

2. Leadership

• Establish a vision and direction for the organization

• Set challenging goals
• Model organizational values
• Establish trust
• Equip and empower employees
• Recognize employee contributions

44
 • Learn more about leadership
• Engagement of people
• Ensure that people’s abilities are used and valued
• Make people accountable
• Enable participation in continual improvement
• Evaluate individual performance
• Enable learning and knowledge sharing
• Enable open discussion of problems and constraints

3. Process approach

• Manage activities as processes

• Measure the capability of activities
• Identify linkages between activities
• Prioritize improvement opportunities
• Deploy resources effectively

4. Improvement

• Improve organizational performance and capabilities

• Align improvement activities
• Empower people to make improvements
• Measure improvement consistently
• Celebrate improvements

5. Evidence-based decision making

• Ensure the accessibility of accurate and reliable data

• Use appropriate methods to analyze data
• Make decisions based on analysis
• Balance data analysis with practical experience

6. Relationship management

• Identify and select suppliers to manage costs, optimize resources, and create value
• Establish relationships considering both the short and long term
• Share expertise, resources, information, and plans with partners
• Collaborate on improvement and development activities
• Recognize supplier successes
III. Learning Inputs:
1. Lecture/discussion
2. Assignment/activity
3. Quiz/final exam

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IV. Summary

Certification of businesses to the ISO 9000 series standards is increasing rapidly around the
world. Many companies see implementation of the standards as an investment in the future. They are
convinced that the program will pay for itself as it results in lower production costs and greater
efficiency in operation as well as access to new markets and new customers. In many industries,
certification has almost become a necessity for doing business. And in some countries, such as in the EU,
certification is mandatory in certain industries.
Yet, the ISO 9000 series standards are process standards, not product standards. Their widespread use
throughout the world is creating desirable harmonization in terms of providing goods to the public. But
the ISO 9000 series standards do not guarantee quality products from the companies that participate in
the program.

V. Evaluation
1. Name 10 local and foreign companies who are ISO certified.
2. Discuss the strengths and weaknesses of ISO 9000.
3. What is the latest version of ISO 9000? Discuss.

Reference:
Total Quality Management
McGraw-Hill International, 2009

Sources:
https://www.referenceforbusiness.com/encyclopedia/Int-Jun/ISO-9000.html#ixzz6p5ioa2PK
https://www.referenceforbusiness.com/encyclopedia/Int-Jun/ISO-9000.html

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