TOTAL QUALITY MANAGEMENT

INTRODUCTION TO TQM

What is TQM?
TQM is the integration of all functions and
processes within an organization in order to
achieve continuous improvement of the quality
of goods and services. The goal is customer
satisfaction.
HISTORY OF TOTAL QUALITY

According to Phil Crosby, Quality is . . .

An attitude:
- Zero Defects
- Continuous Improvement

A measurement:
- Price of Conformance, plus
- Price of Nonconformance (defects)
TQ: TRANSFORMING AN
ORGANIZATION
From To

Motivation through fear and loyalty Motivation through shared vision

Attitude: “It’s their problem” Ownership of every problem

affecting the customer

Attitude: “the way we’ve always done Continuous improvement

it”

Decisions based on assumptions/ Decisions based on data and facts

judgment calls

Everything begins and ends with Everything begins and ends with
management customers

Crisis management and recovery Doing it right the first time

Choosing participative OR scientific Choosing scientific AND

management participative management
THE THREE QUALITY GURUS

• Deming: the best known of the “early” pioneers,

is credited with popularizing quality control in
Japan in early 1950s.Today, he is regarded as a
national hero in that country and is the father of
the world famous Deming prize for quality.
JURAN

• Juran, like Deming was invited to Japan in 1954

by the union of Japanese Scientists and
engineers.

• Juran defines quality as fitness for use in terms

of design, conformance, availability, safety and
field use. He focuses on top-down management
and technical methods rather than worker pride
and satisfaction.
PHILIP CROSBY: AUTHOR OF
POPULAR BOOK QUALITY IS FREE.
HIS ABSOLUTES OF QUALITY ARE:
• Quality is defined as conformance to requirements,
not “goodness”
• The system for achieving quality is prevention, not
appraisal.
• The performance standard is zero defects, not
“that’s close enough”
• The measurement of quality is the price of non-
conformance, not indexes.
COMMONALITY OF THEMES
OF QUALITY GURUS
• Inspection is never the answer to quality improvement, nor is
“policing”.

• Involvement of leadership and top management is essential to

the necessary culture of commitment to quality.

• A program for quality requires organization-wide efforts and

long term commitment, accompanied by the necessary
investment in training.

• Quality is first and schedules are second.

WHAT IS SIX SIGMA?

• A goal of near perfection in meeting customer requirements

• A sweeping culture change effort to position a company for greater

customer satisfaction, profitability and competitiveness
• A comprehensive and flexible system for achieving, sustaining and
maximizing business success; uniquely driven by close understanding of
customer needs, disciplined use of facts, data, and statistical analysis, and
diligent attention to managing, improving and reinventing business
processes(Source:The Six Sigma Way by Pande, Neuman and Cavanagh)
SIX SIGMA IMPROVEMENT
METHODS
Define

Measure

Analyze

Continuous Improvement Reengineering

Improve Design

Control Validate
 System

MANAGEMENT OF
PROCESS
QUALITY
CUSTOMER
FOCUS
Driver HUMAN RESOURCE AND
DEVELOPMENT AND SATISFACTION
MANAGEMENT
SENIOR
EXECUTIVE
LEADERSHIP
STRATEGIC
QUALITY QUALITY
PLANNING AND
OPERATIONAL
RESULTS
INFORMATION
AND ANALYSIS

System Approach for TQM

CHARACTERISTICS OF TQM
LEADER
• Visible, Committed and Knowledgeable
• A Missionary Zeal
• Aggressive Targets
• Strong Drivers
• Communication of Values
• Organization
• Customers Contact
TQO HRM

Five Principles are:

• Quality Work the First Time
• Focus on the Customer
• Strategic Holistic Approach to Improvement
• CI as a Way of Life
• Mutual Respect and Teamwork
 CUSTOMER SATISFACTION
THREE PART SYSTEM
Human Resource Customer Expectations
Management

Company Operations Customer Satisfaction

(Processes)
INDICATORS FOR CUSTOMER
SATISFACTION
• Frontline empowerment
• Excellent hiring, training, attitude and morale for
front line employees
• Proactive customer service system
• Proactive management of relationship with
customers
• Use of all listening posts
• Quality requirements of market segment
• Commitment to customers
• Understanding customer requirements
• Service standards meeting customers requirements
THREE VIEWS ABOUT QUALITY
COSTS
Higher quality means higher cost.
• Quality attributes such as performance and features cost
more in terms of labor, material, design and other costly
resources.
• The additional benefits from improved quality do not
compensate for additional expense.
The cost of improving quality is less than the resulting
savings.
• The saving result from less rework, scrap and other direct
expenses related defects.
• This is said to account for the focus on continuous
improvement of processes in Japanese firms.
THREE VIEWS OF QUALITY
COSTS
Quality costs are those incurred in excess of
those that would have been incurred if the
product were built or the service performed
exactly right the first time.
This view is held by adherents of TQM
philosophy.
Costs include not only those that are direct, but
also those resulting from lost customers, lost
market share and the many hidden costs and
foregone opportunities not identified by modern
cost accounting systems.
QUALITY COSTS

COST OF QUALITY IS THE COST OF

NON QUALITY

“A stitch in time saves nine”

Types of Quality Costs
The cost of quality is generally classified into four
categories

1. Cost of Prevention
2. Cost of Appraisal
3. Cost of Internal Failure
4. Cost of External Failure
QUALITY COSTS

Cost of Prevention
• Prevention costs include those activities which
remove and prevent defects from occurring in the
production process.
• Included are such activities as quality planning,
production reviews, training, and engineering
analysis, which are incurred to ensure that poor
quality is not produced.
Appraisal
• Those costs incurred to identify poor quality
products after they occur but before shipment to
customers. e.g. Inspection activity.
QUALITY COSTS

Internal Failure
• Those incurred during the production process.
• Include such items as machine downtime, poor
quality materials, scrap, and rework.
External Failure
• Those incurred after the product is shipped.
• External failure costs include returns and
allowances, warranty costs, and hidden costs of
customer dissatisfaction and lost market share .
BENEFITS OF TQM

• Greater customer loyalty

• Market share improvement
• Higher stock prices
• Reduced service calls
• Higher prices
• Greater productivity
Significance of TQM

The importance of TQM lies in the fact that it encourages

innovation, makes the organization adaptable to change, motivates
people for better quality, and integrates the business arising out of a
common purpose and all these provide the organization with a
valuable and distinctive competitive edge.
Elements of TQM

• Be customer focused
It requires the company to check customers' attitudes regularly and
includes the idea of internal customers as well as external ones.

• Do it right the first time

This means avoiding rework, i.e., cutting the amount of defective
work.
• Constantly improve
Continuous improvement allows the company
gradually to get better.

• Quality is an attitude
Every one has to be committed to quality. That means
changing the attitude of the entire workforce, and
altering the way the company operates.

• Telling staff what is going on

This involves improved communication. Typically, it
includes team briefing.
• Educate and train people
An unskilled workforce makes mistakes. Giving more
skills to workers means they can do a wider range of
jobs, and do them better. It also means educating staff in
the principles of TQM, which is a whole new style of
working.

• Measure the work.

Measurement allows the company to make decisions
based on facts, not opinion. It helps to maintain standards
and keep processes within the agreed tolerances.

• Top management must be involved

If senior management is not involved, the programme
will fail.
• Make it a good place to work
Many companies are full of fear. Staffs are afraid of the
sack, their boss and making mistakes. There is no point in
running a TQM program unless the company drives out
fear.

• Introduce team work

Team work boosts employees' morale. It reduces conflict
and solves problem by hitting them with a wider range of
skills. It pushes authority and responsibility downwards
and provides better, more balanced solutions.

• Organize by process, not by function

This element of TQM seeks to reduce the barriers that exist
between different departments, and concentrates on getting
the product to the customer.
Reasons for FAILURE

TQM fails because:

• Top management sees no reason for change.

• Top management is not concerned for its staff.

• Top management is not committed to the TQM

programme.

• The company loses interest in the programme after six

months.
• The workforce and the management do not agree on
what needs to happen.

• Urgent problems intervene.

• TQM is imposed on the workforce, which does not

inwardly accept it.

• No performance measure or targets are set, so progress

cannot be measured.

• Processes are not analyzed, systems are weak and

procedures are not written down.
THANK YOU!!!