Chapter three

Total Quality Management

 Evolution of Quality Management

 Inspection - Salvage, sorting, grading, blending, corrective

actions, identify sources of non-conformance

• The purpose of inspection was that the poor quality

product found by the inspectors would be separated from
the acceptable quality product and then would be
scrapped, reworked or sold as lower quality

• Eg. when Ford Motor Company’s ‘T’ Model car rolled off
the production line in 1910s
16-2
Cont.d

 Quality Control - Develop quality manual, process

performance data, self-inspection, product testing, basic
quality planning, use of basic statistics, paperwork
control.

• Statistical quality control by inspection — emerged,

control charts and accepting sampling methods were
developed by Shewhart and Dodge-Roming during the
period 1924–1931
Cont.d

• Shewhart introduced the idea that quality control can

help to distinguish and separate two types of process
variation; firstly the variation resulting from random
causes and secondly the variation resulting from
assignable or special causes.

• He also suggested that a process can be made to function

predictably by separating the variation due to special
causes.
Cont.d
• Further, he designed a control chart for monitoring such process
variation in order to decide when to interact with the process.

 Quality Assurance – contains all the previous stages in order to

provide sufficient confidence that a product or service will satisfy
customers’ needs. In addition,

• Quality systems development, advanced quality planning,

comprehensive quality manuals, use of quality costs,
involvement of non-production operations, failure mode and
effects analysis, SPC were developed.
Cont.d
 TQM – involves the understanding and implementation
of quality management principles and concepts in every
aspect of business activities - 1950 onwards

• Policy deployment, involve supplier & customers, involve

all operations, process management, performance
measurement, teamwork, employee involvement.
What is Total Quality Management?

• Definition: TQM is a management philosophy, a paradigm, a

continuous improvement approach to doing business through
a new management model.
• TQM is a comprehensive management system which:
 Focuses on meeting customers’ needs, by providing quality
services at a reasonable cost.
 Focuses on continuous improvement – quality is a journey
 Recognizes role of everyone in the organization.
Cont.d

 Views organization as an internal system with a

common aim.
 Focuses on the way tasks are accomplished.
 Emphasizes teamwork
 Do it right the first time
TQM & organizational Cultural Change
Traditional Approach
• Lack of communication
• Control of staff
• Inspection & fire fighting
• Internal focus on rule
• Stability seeking
• Adversarial relations
• Allocating blame
• Managers think and plan
TQM
• Open communications
• Empowerment
• Prevention
• External focus on customer
• Continuous improvement
• Co-operative relations
• Solving problems at their roots
• Managers guide and lead
Workers think, plan and do
16-9
W. Edward Deming’s 14 Points for TQM

• organization problems lie within the management process

and statistical methods can be used to trace the source of
the problem(Deming, 1982).

• In order to help the managers to improve the quality of their

organizations he has offered them the following 14
management points:-

1. Constancy of purpose: create constancy of purpose for

continual improvement of product and service
Cont.d

2. The new philosophy: adopt the new philosophy. live no longer with
commonly accepted levels of delays, mistakes, defective
workmanship.

3. Cease dependence on inspection: eliminate the need for mass

inspection as a way to achieve quality.

4. End ‘lowest tender’ contracts: end the practice of awarding business

solely on the basis of price tag.

5. Improve every process: improve constantly and forever every

process for planning, production and service.
Cont.d

6. Institute training on the job: institute modern methods of

training on the job.

7. Institute leadership: adopt and institute leadership aimed at

helping people and machines to do a better job.

8. Drive out fear: encourage effective two-way communication

and other means to drive out fear throughout the
organization - Create an environment of innovation
Cont.d
9. Break down barriers: break down barriers between department
and staff areas – avoid competion, promote collaboration with
each othe – establish company wide thinking

10. Eliminate exhortations: eliminate the use of slogans, posters

and exhortations - stop requesting productivity without
providing such methods to achieve it.

11. Eliminate targets: eliminate work standards that prescribe

numerical quotas for the workforce and numerical goals for
people in management.
Cont.d
12. Permit pride of workmanship: remove the barriers that
rob hourly workers, and people in management, of the
right to pride of workmanship.

13. Encourage education: institute a vigorous programme of

education and encourage self-improvement for everyone.

14. Top management commitment: clearly define top

management’s permanent commitment to ever-improving
quality and productivity.
Philosophy, principles and concepts
of TQM

• TQM is a vision which the firm can only achieve through

long-term planning, by drawing up and implementing
annual quality plans which gradually lead the firm
towards the fulfilment of the vision, thus TQM can be
defined as:-

 A corporate culture characterized by increased customer

satisfaction through continuous improvements, in which
all employees in the firm actively participate.
 Cont.d
 TQM can be said to be the culmination of a hierarchy of
quality definitions:

1. Quality—is to continuously satisfy customers’ expectations.

2. Total quality — is to achieve quality at low cost.

3. Total Quality Management — is to achieve total quality

through everybody’s participation.

 Today, consumers can pick and choose between a mass of

competing products — and they do.
Cont.d

 Consumers choose the products that give the ‘highest

value for money’, i.e. those products and services which
give the highest degree of customer satisfaction in
relation to price, hence:-

 Companies without CWQC will sooner or later disappear

from the telephone directory (Professor Yoshio Kondo, of
Kyoto, 1992).
 The Foundation and the four sides of
the TQM Pyramid

 TQM is characterized by five principles:

1. management’s commitment (leadership);

2. focus on the customer and the employee;

3. focus on facts;

4. continuous improvements (KAIZEN);

5. everybody’s participation.
 1. management’s commitment
(leadership)
• A vital task for any management is to outline quality goals, quality
policies and quality plans in accordance with the four sides of the
TQM pyramid.

• these goals and policies should be clear and meaningful to all

employees in the firm.

• It is important, for example, that the firm’s quality goals signal to

employees that the firm’s principal task is to satisfy its external
customers and that this can only be achieved if the firm is able to
exceed customers expectations.
Cont.d
• The firm’s quality goals give all employees a clear
indication of what is going to be achieved concerning
quality.

• The firm’s quality policies describe in more detail how

employees are to achieve that goal

• Quality goals and quality policies must be followed by

meaningful action plans.

• short-term plans (one-year plans) and long-term plans(3-5

years) which are revised by annual quality audit.
Cont.d
 The annual quality audit gives top management the
opportunity to put a number of important questions to
departmental managers including the ff:-

1. How have ‘customers’ been identified (both internal and

external customers)?

2. How have customers’ requirements and expectations

been identified?

3. How have managers and employees tried to satisfy

customers?
Cont.d

4. What do customers think of our products and services and

how has this information been collected?

 These questions allow top management to check whether

employees are in fact seriously trying to fulfil the firm’s
quality goals and employees will be reminded that the
customer, not the product, is top priority.

 In the run-up to the action plan, management must answer

the following questions:
 Cont.d
1. Where are we now? (the present situation) - self-assessment
based on the criteria of internationally-recognized quality
awards.

2. Where do we want to be? (vision).

3. How do we get there? (action plans) – benchmarking

• Bench-marking - continuous process, the purpose of which is

to measure services, products and procedures against the
toughest competitors or leading procedures in a given market.
Cont.d

• to procure the information necessary for a firm to

become the best of the best

 Benchmarking is important to:-

• know your own strengths and weaknesses;
• know your competitors (opponents) and the best in the
field;
• learn from the best;
• achieve leadership.
Cont.d

 Benchmarking can be:-

• Internal benchmarking - comparing yourself with departments
and divisions in the same organization

• competitor-based benchmarking - the firm compares itself with

its direct competitors via indirect means

• Functional benchmarking - based on the functions which the

firm is concerned, the firm compares itself with the leading firm
in these functions (e.g. the use of robots, automation of the
assembly lines, etc.).
Cont.d
• generic benchmarking – based on procedures which are
common on all types of companies, such as order-taking,
the payment of wages, word processing and the like

 For the implementation of TQM, management has to do

the following (Deming,1982):-

1. Management must agree about goals, conditions and

obstacles to the introduction of TQM
Cont.d
2. Management must have the courage to break with
tradition.

3. In building up a new ‘quality organization’, management

must appoint a manager for quality improvements who
has direct access to top management.

4. Management must, as quickly as possible, build up an

organization to advise on the carrying out of continuous
improvements throughout the firm.
Cont.d
5. Management must explain to employees why changes
are necessary and that they will involve everybody in the
company

6. Management must explain that every activity and every

job has its own customers and suppliers.

7. Management must ensure that every employee in the

company participates actively in a team (work team,
quality circle).
 2. focus on the customer and the
employee
 The message in TQM is:-

1. In addition to focusing on external customers and their

expectations and demands, it is necessary to focus on
so-called internal customer and supplier relations.

• improving quality at lower and lower costs can only be

achieved if a company has good, committed and
satisfied employees
Cont.d
• Before you can satisfy external customers, however, you
must first eliminate some of the obstacles to the internal
customers (i.e. The employees) and create the conditions
necessary for them to produce and deliver quality.

• In order to produce and deliver quality, employees need

to know what both internal and external customers
want/expect of them - first step towards becoming a
‘TQM firm’.
Cont.d
2. To create customer satisfaction, it is not enough just to live up to
the customer’s expectations

• This point is the expanded concept of quality having the following

five types of quality:-

1. Expected quality, or must-be quality

2. Proportional quality

3. Value-added quality (‘exciting/charming quality’)

4. Indifferent quality

5. Reverse quality
Cont.d
1. Expected quality

In order to deliver the expected quality, firms have to know

what the customers expect. if firms have this knowledge, they
must then try to live up these expectations—this is so
obviously a ‘must-be’ quality otherwise customers will be

dissatisfied.

2. Proportional quality

If the product or service—or an attribute of a product or

service - lives up to some agreed physical condition
Cont.d

then satisfaction for some people will be the result and

if not, dissatisfaction will become the consequence.

• variety of the breakfast in a hotel service may be an

example of proportional quality.

• however, what is proportional quality to one customer

may be regarded as expected or value-added quality
by another customer
Cont.d

3. Value-added quality

• For many customers, just to live up to their expectations

by itself does not create satisfaction, it ‘only’ removes
dissatisfactions

• ‘value-added’ quality describes more directly that the

producer has added one or more qualities to the product
or service in addition to those the customer expects and
that these extra qualities give the customer extra value.
Cont.d
• These extra qualities will surprise the customer and
make him/her happy, satisfied, or excited with the
product

4. Indifferent quality

• Any product or service consists of a large number of

quality attributes and some of the customers will always
be indifferent if a specific attribute is or is not inherent
in the product - characteristic of ‘indifferent quality’.
Cont.d
5. Reverse quality

• For some specific quality attributes, sometimes customers

become dissatisfied if the attribute is inherent in the
product/ service and the customers become satisfied if it is
not. these attributes have a reverse effect on customer
satisfaction –hence, ‘reverse quality’.

 companies must always ensure customer’s satisfaction.

Satisfied customers today are a condition for a satisfactory
business result tomorrow. It is therefore imperative that
firms establish the means to check customer satisfaction
3. focus on facts

• In order to realize a TQM vision, companies must first set

up a system for the continuous measurement, collection
and reporting of quality facts.

 What kind of measurements are needed?

1. External customers’ satisfaction (CSI=Customer Satisfaction

Index)

2. Internal customers’ satisfaction (ESI=Employee Satisfaction

Index)

3. Quality checkpoints and quality control points

Cont.d
• Focus on the customer and the employee is the
cornerstone of TQM

• therefore, both employee and customer satisfaction

should be included as quality goals

• Satisfied customers and satisfied employees are

prerequisites for a good business result,
Measurement of Customer Satisfaction

• customer’s experience of the quality of a product or

service is the result of a large number of stimuli relating
to both the product itself, the services and the
circumstances under which it is delivered to the
customer

• customer’s satisfaction must therefore be measured in

many different dimensions (quality parameters) if it is to
form the basis of quality improvements
 Cont.d
• And the importance of the different quality parameters varies

• We assume that the customers evaluate the firm on n

different dimensions or sub-areas, both as regards the quality
individual areas and the importance of these areas.

• let the resulting evaluation for the ith subarea be Ci and the
associated importance Wi.

• Overall customer satisfaction—the Customer Satisfaction

Index, or CSI—can then be calculated as
Cont.d
• a simple weighted average:

CSI=W1C1+W2C2+…+ WnCn

• The main use of this index is to provide the company with an

instrument to choose the vital dimensions of customer
satisfaction and to allocate resources to these areas.

• While evaluating each quality parameter, If the importance is

high and the satisfaction is low the company is faced with a
serious problem which may lead to loss of customers in the
future.
Cont.d

• Similarly if the importance is low and the satisfaction is

high the company has allocated its resources in the
wrong way. Being good at something which the
customers do not evaluate means a loss of money.
Instead these resources could be used for improving the
situation in the high/low square
Cont.d
 Measuring Employee Satisfaction

• to satisfy external customers depends on having satisfied

internal customers

• In TQM, the main interest is in ‘human quality’. To instil quality

into people has always been fundamental to TQM. A firm that
manages to build quality into its employees is already half way
towards the goal of making quality products (Imai,1986)

• One of the main control points of ‘human quality’ is employee

satisfaction – its measurement is similar to customer
satisfaction
 Quality Control Points And Quality
Checkpoints

• Any firm can be described as a collection of connected

processes producing some ‘result’ or other—either input
to subsequent processes (the internal customers) or
output to external customers.

• When measuring the quality of a process result, we say

that we have established a ‘quality control point’

• Eg. Yarn quality, fabric quality and quality of finishing

 Cont.d
• As TQM is process-oriented, The most common internal
quality measurement that can be used as a control point in
most processes is:

Total defects per unit = number of defects/number of units

produced or tested

• A defect is anything which causes customer dissatisfaction,

whether specified or not

• A unit is any unit of work

Cont.d
• While quality control points are ‘R criteria’ (=result criteria),
quality checkpoints are ‘P criteria’ (=process criteria)

• quality checkpoint measures the state of the process

• a quality control point for one process can also be seen as a

quality checkpoint for another

• Eg. employee satisfaction is a quality control point for the

firm’s human resource process, but a quality checkpoint for
other business functions.
 4. Continuous Improvements

• A way can always be found to achieve higher quality at lower

cost

 Higher quality both should and can be achieved through:

1. internal quality improvements

2. external quality improvements.

• The main aim of internal quality improvements is to make the

internal processes ‘leaner’, i.e. to prevent defects and problems
in the internal processes which will lead to lower costs.
Cont.d
• external quality improvements are aimed at the external
customer, the aim being to increase customer
satisfaction and thereby achieve a bigger market share
and with it, higher earnings

• Education and training for employees

• A leadership style that appreciate and motivate ideas for

continuous improvement
 5. Everybody’s Participation

• Internal customers, together with their requirements and

expectations, must be identified in all the processes

• Planning how these requirements and expectations can

be fulfilled

• Getting feedback from the customers, so that their

experiences and problems become known in all processes

• Needs every body’s participation

Cont.d
• Management must ensure that every employee in the
company participates actively in a team (work team, quality
circle)

• Management must build up an organization to advise on the

carrying out of continuous improvements throughout the firm

• management should invest in the education and training of

all employees at all levels in:

1. Identifying defects and problems.

Cont.d

2. Finding the causes of defects and problems.

3. Prevention, i.e. preventing the causes of defects and

problems. A condition for effective prevention is that
employees have completed points 1 and 2 and that, on
the basis of a causal analysis, they make suggestions for
and implement quality improvements.

4. Start again
 Is TQM suitable for Ethiopian textile factories?
Thank you!