Module 1 Introduction

Total Quality Management

Aireen Y. Clores, M.B.A HRTM Instructor Dept. of Family & Consumer Sciences

Some questions . . . •

Does higher quality has any relation with business performance?

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Does higher quality means more cost and more time Or quality is free?

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Operational problems faced by organizations can be generalized?

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What management experts have advised to improve aver all operation?

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Shall we learn lesson from management experts or try our own methods Total Quality Management

Contents  Total Quality  Quality Definition  Quality Movements  History of Quality Paradigms  Quality Control & Assurance  Total Quality Management - Pillars of TQM - Other components of TQM Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives. Will A Foster Total Quality Management

What is TQM? Constant drive for continuous improvement and learning.

Result Focus

Actions not just words (implementation)

Management by Fact

Passion to deliver customer value / excellence

Process Management

Concern for employee involvement and development

Organisation response ability Partnership perspective (internal / external)

Total Quality Management TQM Philosophy 

Philosophy of TQM revolves around customer driven management.

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Its major emphasis is on determining customer need or expectation from the product.

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Total Quality is the culture of the organization.

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It is attitude of people how they perform their assigned work with aims to provide, customers with products and services that satisfy their needs.

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The culture change means all members of the organization participate in the improvement of process, products, and services. Total Quality Management

TQM Philosophy

“Do the right things, right the first time, every time”

You must put a quality product into QC before you can expect to get out one, otherwise wastage (or rework) will be very high.

Total Quality Management

Pillars of TQM 1- Customer Focus: Studying customer needs, gathering customer requirements, and measuring and managing customer satisfaction. Customer satisfaction is seen as the company's highest priority. The company believes that it will only be successful if its customers are satisfied. 2- Process Management: Develop a production process that reduce the product variations. Applying the same process; the same product should be produces with the same level of quality every time. Teams are process-oriented, and interact with their internal customers to deliver the required results. Management's focus is on controlling the overall process, and rewarding teamwork. Total Quality Management

Pillars of TQM

3- Employee Empowerment (Human side of Quality): TQM environment requires a committed and well-trained work force that participates fully in quality improvement activities. On-going education and training of all employees supports the drive for quality. 4- Continuous Improvement: TQM recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company's processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality. Measurement and analysis id the tool that has been used for that.

Pillars of TQM T. Q. M. Customer Focus

Process Management

Employee Training & Empowerment

Continuous Improvement (through measurement and analysis)

• Reduce rework activities • Shorter development cycle • Increased customer satisfaction

(Cost reduction) (Cost reduction) (Quality improvement)

Other elements of TQM  Leadership  Vision and Plan Statement  Employee Participation  Recognition and Reward  Education and Training  Supplier Quality Management  Performance Evaluation  Product Design Total Quality Management

LEARNING AND TQM Learning Process Improvement Quality Improvement Customer Satisfaction

Shareholder Satisfaction

Employee Satisfaction

BASIC PRINCIPLES OF TQM Approach

Management Led

Scope

Company Wide

Scale

Everyone is responsible for Quality

Philosophy

Prevention not Detection

Standard

Right First Time

Control

Cost of Quality

Theme

On going Improvement

Quality Definition

• Quality is the conformance to requirements. (Crosby in 1979)

• Fitness for use.

(Juran 1970)

• The degree to which a system, component, or process meets specified requirements. (IEEE)

Total Quality Management

Quality Gurus

• Walter A. Shewhrat

(Father of Quality, 1920-1940s)

• Dr. W. Edwards Deming • Dr. Joseph M. Juran • Philip Crosby • Kaoru Ishikawa

(14-points, 1945-1980s) (TQM, post WWII – 1980s) (Quality is Free, 1980s)

(Fish Bone, SPC, post WWII - 1980s)

Total Quality Management

Quality Movements •

Japanese were badly defeated in World War II. Their industrial and financial bases were in chaos.

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Japan had no natural resource and limited source of food for their people.

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The quality movement began in Japan in 1946 with the U.S. Occupation Force's mission to revive and restructure Japan's communications equipment industry.

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Dr. Deming was invited by the Union of Japanese Scientists and Engineers to Japan in 1947.

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In 1954, Dr. Joseph Juran of the United States raised the level of quality management from the factory to the total organization in Japan. Total Quality Management

Quality Movements 

Results from Japan’s implementation from American quality experts led to an industrial revolution that eventually left the American industry lagging behind.

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It was during the late 1980s that American industry began to finally look to their quality experts for methods to improve quality.

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In the late 1980s, an NBC documentary called If Japan Can Why Can’t We brought national attention to the needs for quality improvements for global competition.

Total Quality Management

History of Quality Paradigms 1- Customer-Craft quality Paradigm Design and build each product for a particular customer. Producer knows the customer directly.

2- Mass production & inspection Paradigm Focus on designing and building products for mass consumption. - Push products on the customer

(limit customer choices).

- Quality is maintained by inspecting and detecting bad products.

Major innovation to this paradigm: statistical process control

3- TQM Paradigm Potential customers determine what to design and build. Higher quality obtained by focusing on preventing defects and continuously reducing variability in all processes. Total Quality Management

Quality Evolution Proactive Approach Prevention

Total Quality Management

Incorporates QC/QA activities into a company-wide system aimed at satisfying the customer. (involves all organizational functions)

4

Stop defects at source. Zero defects 3

Reactive Approach Detection

2

Finding & Fixing mistakes 1

Quality Assurance

Quality Control

Inspection

Planned and systematic actions to insure that products or services conform to company requirements

Operational techniques to make inspection more efficient & to reduce the costs of quality. (example: SPC) Inspect products

Quality Control  The purpose of quality control is to uncover defects and have them corrected so that defectfree products will be produced.  Quality control is limited to looking at products .  Quality control is testing the final product against product quality standards.  Quality control is operational techniques that are used to fulfill requirements for product quality. Juran says, software quality control is the process of measuring actual quality, comparing this to some standard, and then acting on the discrepancy. Total Quality Management

Quality Assurance  Quality assurance is oriented toward preventing defects.  It is defined by those activities that modify the development processes to prevent the introduction of defects.  Quality assurance is more concerned with the processes that produce the final product, and making sure that quality is part of each phase.  QA is about maturing the process towards minimum defect.  It is about balancing methodology, leadership, and technology.  It is about taking into account human factors as well as technological ones. Total Quality Management

FOUR KEY PRINCIPLES

•Measure quality so you can affect it •Focus on a moving customer •Involve every employee •Think long term - Act short term

THE CONCEPT OF QUALITY • • • • •

Perfection Consistency Eliminating waste Speed of delivery Compliance with policies and procedures

• Providing a good, usable product • Doing it right the first time • Delighting or pleasing customers • Total customer service and satisfaction

THE IMPORTANCE OF QUALITY • Quality share.

drives

market

• Quality can also reduce costs. • As quality improves, so does cost, resulting in improved market share and hence profitability and growth.

THE CASE FOR QUALITY 1 Success of competitors who take quality seriously 2 Rising expectations of customers 3 Quality differentiates companies from the competition 4 Narrowing of supplier bases by quality conscious companies .

THE CASE FOR QUALITY 5 Growing evidence that growth in market share comes from sustained quality. 6 Cost advantages 7 High cost of catastrophic failure 8 Inspection poor substitute for right first time

Leadership •

The ability of top management to establish, practice, and lead a long-term vision for the firm, driven by changing customer requirements, as opposed to an internal management control role.

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Lack of top management commitment is one of the reasons for the failure of TQM efforts (Brown et al. 1994).

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A predominant requirement for quality management is that strong commitment from top management is vital.

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To be an effective leader in most modern firms, the top manager must continue to develop and learn.

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Knowledge of the business and continual learning are essential prerequisites to effective leadership (DuBrin, 1995).

Total Quality Management

Leadership •

In order to effectively lead the firm, top management must be committed to provide education and training to employees and regarding them as valuable resources of the firm.

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Top management must be committed to allocating sufficient resources to prevent, as well as repair, quality problems.

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Top management should discuss quality frequently; by having session on the topic and asking questions about quality at every staff meeting.

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Top management must train and coach employees to assess, analyze, and improve work processes (Deming, 1986).

Total Quality Management

Vision & Plan Statement Vision statement describes how a firm wants to be seen in its chosen business. Vision describes standards, values, and beliefs of the organization. Intent of a vision statement is to communicate the firm’s values, aspirations and purpose, so that employees can make decisions that are consistent with and supportive of these objectives. Plan statement is a detailed road map of actions; what and how organization intended execute that plan in future. Organization may have many kinds of plan; - Strategic business performance plan - Quality goal plan - Quality improvement plan

Total Quality Management

Vision & Plan Statement Strategic business performance plan can be divided into longand short-term business performance plans that include, for example, market share, profits, annual sales, exports, and sales growth. Quality goal plan can involve, for example, conformity rate, defect rate, internal failure costs, external failure costs, performance, reliability, and durability. Quality improvement plan aims for quality improvement, which are actions taken throughout the organization to increase the effectiveness and efficiency of activities and processes in order to provide added benefits to both the organization and its customers (ISO 8402, 1994).

Total Quality Management

Employee Participation 

Employee participation can be defined as the degree to which employees in a firm engage in various quality management activities.

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By participating in quality management activities, employees acquire new knowledge, see the benefits of the quality disciplines, and obtain a sense of accomplishment by solving quality problems.

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A remarkable characteristic of employee participation is teamwork. Breakdown barriers between departments. People in research, design, sales, and production must work as a team (Deming’s 9th point).

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If several knowledgeable people are brought into the decisionmaking process, a number of worthwhile possibilities may be uncovered. Total Quality Management

Employee Participation  TQM implementation practice is formation of short-term problemsolving teams (SEPG).  Problem-solving teams work on a wide variety of tasks, ranging from cross-functional involvement in tackling quality problems to solving within-functional quality problems.  TQM firms create employee suggestion systems. Production workers should regularly participate in operational decisions such as planning, goal setting, and monitoring of performance.  They are encouraged to make suggestions and take a relatively high degree of responsibility for overall performance.  Employees should be encouraged to inform managers or supervisors concerning conditions that need correction (e.g., process defects, incompetent staff and poor tools). Total Quality Management

Recognition & Reward  Recognition is defined as the public acknowledgment of superior performance of specific activities.  Reward is defined as benefits, such as increased salary, bonuses and promotion, which are conferred for generally superior performance with respect to goals (Juran and Gryna, 1993).  Public recognition is an important source of human motivation.  Important feature of any quality improvement program is the showing of due recognition for improved performance by any individual, section, department or division within the firm.  A large majority of firms implementing TQM modify their performance measurement and reward systems so that achievement of specific quality goals can be assessed and rewarded. Total Quality Management

Education & Training 

Training programs attempt to teach employees how to perform particular activities or a specific job.

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Institute a vigorous program of education and self-improvement (Deming’s 13th point).

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According to Deming, Japanese firms obviously regard their employees as their most significant competitive assets and provide good general orientation as well as training in specific skills.

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According to Feigenbaum, a brief and general course for first-line supervision is modern methods of planning and controlling quality, concentrating essentially upon the physical elements affecting product quality.

Total Quality Management

Performance Evaluation  Evaluation can identify the difference between actual and the expected performance.  Evaluation information should be communicated to employees in order to encourage employees to make things better.  Uncontrolled variance in processes or outcomes is the primary cause of quality problems and must be evaluated and controlled by those who perform the firm’s front-line work.

It is important to note that the major aim of evaluation is improvement, NOT criticism. Total Quality Management

Product Design (SW Dv’mt)  Product design translates customer expectations or requirements into specific engineering and quality characteristics, which can be called specifications.  It is an important practice for design engineers to have some marketing knowledge, making it easier for them to understand customer needs, expectations, and future requirements.  Different departments in a firm should participate in new product design.  Before production, new product design should be thoroughly reviewed in order to avoid problems during production.

Total Quality Management

Good Managers (Leaders) 1. 2. 3. 4. 5. 6.

Give priority attention to customers and their needs Empower, rather than control, subordinates. Emphasize improvement rather than maintenance. They emphasize prevention. Encourage collaboration rather than competition. They train and coach, rather than direct and supervise.

Total Quality Management

Good Managers (Leaders) 7. 8. 9.

Learn from problems. They continually try to improve communications. They continually demonstrate their commitment to quality. 10. Choose suppliers on the basis of quality, not price. 11. Establish organizational systems to support the quality effort. 12. Encourage and recognize team effort.

Total Quality Management

Understand People  People,normally, need security and independence at the same time.  People are sensitive to rewards and punishments and yet are also strongly self-motivated.  People like to hear a kind word of appreciation.  People can process only a few facts at a time; thus, a leader needs to keep things simple.  People trust their gut reaction more than statistical data.  People don’t trust a leader (or boss) if the words are inconsistent with the his/her actions.

Total Quality Management

Old vs. TQM Approach Quality Element

Previous Approach

TQM Approach

Definition

Product-oriented

Customer-oriented

Priorities

2nd to service and cost

Equals of service and cost

Decisions

Short-term

Long-term

Emphasis

Detection

Prevention

Errors

Operations

System

Responsibility

Quality control

Everyone

Problem Solving

Managers

Teams

Procurement

Price

Life-cycle costs,partnership

Manager’s Role

Plan, assign, control, and enforce

Delegate, coach, facilitate and mentor Total Quality Management

QoQ vs Performance Improvement By Herb Krasner

Software Quality

10

Cost of Quality

Improvement Multiplier

Business Performance 5

1

1

2

3

4

5

6

7

Years

Total Quality Management

Advantages of TQM • create an organizational atmosphere of excitement and sense of accomplishment through the rewarding of creativity. • Eliminating errors and doing things right the first time saves time and resources

• higher productivity, increased morale, reduced costs, and greater customer commitment may lead to greater public support and improvement of an organization’s public image.

Advantages of TQM • gives employees the • Total Quality experience of Management may be problem solving and a "profit generator," using their knowledge even for public and experiences in a organizations collaborative effort

Disadvantages of TQM •

Long-range plans advocated by TQM may limit an organization’s flexibility and agility. – Objectives the plan was designed to accomplish are forgotten; achieving the transformation becomes the most important objective.

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TQM detractors also that although Total Management calls organizational change, not demand organizational reform

argue Quality for it does radical

– Real quality improvement requires radical structural change, such as flattening organizational structures. It requires liberation of employees from stifling control systems and the tyranny of functionalism, both of which stifle teamwork.

Disadvantages of TQM •

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Total Quality Management calls for the elimination of the goals and objectives required by Management-byObjectives. Total Quality Management calls for the elimination of performance assessments that rate employees in relation to each other.

• Total Quality Management calls for its implementation to be immediate and complete. •

Total Quality Management develops its own bureaucracy. TQM detractors contend its statistical burden and committee structure is cumbersome, slows organizational momentum, and consumes too much time and resources.

Disadvantages of TQM • Opponents of Total Quality Management maintain that it appeals to egotism.

• Total Quality Management calls for a cultural transformation. – Some argue it creates a process-crazed organization, similar to a cult, where the impression is that only total commitment to TQM can save the organization from ruin.

Thanks

ASSIGNMENT: CASE ANALYSIS The Reservation Nightmare 

H. James Harrington, a noted quality consultant, related the following story in Quality Digest magazine: I called to make a flight reservation just an hour ago. The telephone rang five minutes before a recorded voice answered. ‘’Thank you for calling ABC Travel services,’’ it said. ‘’To ensure the highest level of customer service, this call may be recorded for future analysis.’’ Next I was asked to select from one of the following choices: ‘’ If the trip is related to company business, press 1.Personal business, press 2. Group travel, press 3.” I pressed 1.

 

DISCUSSION QUESTIONS

Summarize the service failures associated with this experience. What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?   •

 

ASSIGNMENT: CASE ANALYSIS The Reservation  Nightmare 

  DISCUSSION QUESTIONS

Summarize the service failures associated with this experience. What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?

I was then asked to select from the following choices: “If this is a trip within the United States, press 1.International, press 2.Scheduled training, press 3. Related to conference, press 4.” Because I was going to Canada I pressed 2. Now two minutes into my telephone call, I was instructed to be sure that I had my customer identification card available. A few seconds passed and a very sweet voice came on, saying, “All international operators are busy, but please hold because you are a very important customer.’’ The voice was then replaced by music. About two minutes later, another recorded message said, “Our operators are still busy, but please hold and the first available operator will take care of you.’’ more music. Then yet another message: ‘’ Our operators are still busy, but please hold. Your business is important to us.’’ more bad music.

ASSIGNMENT: CASE ANALYSIS The Reservation  Nightmare 

  DISCUSSION QUESTIONS

Summarize the service failures associated with this experience. What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?

Finally the sweet voice returned, stating, ‘’to speed up your service, enter your 19-digit costumer service number.’’ I frantically searched for their card, hoping that I could find it before I was cut off. I was lucky; I found it and entered the number in time. The same sweet voice came back to me, saying, ‘’ to confirm your service number, enter the last four digits of your customer service number, enter the last four digits of your social security number.” I pushed the four numbers on the keypad. The voice said: ‘’ Thank you. An operator will be with you shortly. If your call is emergency, you can call 1-800-CAL-HELP, or push all of the buttons on the telephone at the same time. Otherwise, please hold, as you are a very important customer.” This time, in place of music, I heard a commercial about the service that the company provides.

ASSIGNMENT: CASE ANALYSIS The Reservation  Nightmare 

  DISCUSSION QUESTIONS

Summarize the service failures associated with this experience. What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?

At last, a real person answered the telephone and asked,’’ Can I help you? ‘’ I replied, ‘’ Yes, oh yes.’’ He answered, “Please give me your 19-digit customer service number, followed by the last digit of your social security number so I can verify who you are.’’ (I thought that I gave these numbers in the first place to speed up service. Why do I have to rattle them off again?

ASSIGNMENT: CASE ANALYSIS The Reservation  Nightmare 

  DISCUSSION QUESTIONS

Summarize the service failures associated with this experience. What might the travel agency have done to guarantee a better service experience for Mr. Harrington? How do your suggestions relate to the TQ principles?

• I was now convinced that he would call me Mr. 5523-3675-0714-1313-040. But, to my surprise, he said: “Yes, Mr. Harrington. Where do you want to go and when?” I explained that I wanted to go to Montreal the following Monday morning. He replied: ‘’ I only handle domestic reservations. Our international desk has a new number: 1-800-1WE-GOTU. I’ll transfer you.’’ A few clicks later a message came on, saying. ‘’All of our international operators are busy. Please hold and your call will be answered in the order it was received. Do not hang up or redial, as it will only delay our response to your call. Please continue to hold, as your business is important to us.”