GE8077 – TOTAL QUALITY MANAGEMENT

UNIT I - INTRODUCTION
Introduction
TQM is defined as both philosophy and a set of guiding principles that represent the foundation of
continuously improving organization. It is the application of quantitative methods and human
resources to improve all the process within the organisation and exceed customer needs now and
in the future.

Evolution of quality
Time Events
Until 1960s
Prior to the Quality is an art
20thcentury Demands overcome potential production
An era of workmanship
F.Taylor The scientific approach to management resulting in rationalization of work
1900s and its break down leads to greater need for standardization, inspection and
supervision
Shewart Statistical beginnings and study of quality control. In parallel, studies by R
1930s A Fisher on experimental design; the beginning of control charts at western
Electric in USA
Late Quality standards and approaches are introduced in France and Japan.
1930s Beginning of SQC, reliability and maintenance engineering
1942 Seminal work by Deming at the ministry of war in USA on quality control
and sampling
Working group setup by Juran and Dodge on SQC in US army
Concepts of acceptance sampling devised
1944 Daodge and Deming carried out seminal research on acceptance sampling
1945 Founding of the Japan standard association
1946 Founding of the ASQC
1950 Visit of Deming in Japan at the invitation of K Ishikawa
1951 Quality assurance increasingly accepted
1954 TQC in Japan ; Book published 1956
1957 Founding of European organization for the control of quality
After 1960s
1961 The Martin Co in USA introduces the zero defects approach while
developing and producing Pershing Missiles. Quality motivation is starting
in the US and integrated programmes begun
1962 Quality circles are started in Japan
1964 Ishikawa publishes book on Quality management
1970 Iskiawa publishes the book on the basics of quality circles and the concept
of Total Quality is affirmed and devised in Japanese industries
1970 to Just – in –Time and quality become crucial for competitiveness. A large
1980 number of US and European corporations are beginning to appreciate the
advance of Japan’s industries. Taguchi popularizes the use of environmental
design to design robust systems and products
1980+ Facing the rising sun challenge in quality management
Development and introduction of FMSs and greater dependence on supplier
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 contracts.
Growth of economic based on quality control, information software
packages
1990+ The management of quality has become a necessity that is recognized at all
levels of management
Increasing importance is given to off line quality management for the design
of robust manufacturing processes and products. The growth of process
optimization

QUALITY – DEFINITION
1. Predictable degree of uniformity and dependability at low cost and suited to the market -
Deming
2. Fitness for use-Juran
3. Conformance to requirements - Crosby
4. Minimum loss imparted by a product to society from the time the product is shipped -
Taguchi
5. A way of managing tile organization -Feigenbaum
6. Correcting and preventing loss, not living with loss - Hosffin .
7. The totality of characteristics of an entity that bear on its ability to satisfy stated and implied
needs – ISO
QUANITIFICATION OF QUALITY
P
Q=
E
P=Performance E =Expectations

If Q is greater than 1.0, then the customer has a good feeling about the product or service.

DIMENSIONS OF MANUFACTURING (product) Quality

The various dimensions of product quality are:
All these nine dimensions can be clearly explained with the example of Android Phone.
Performance - Primary product characteristics, such as signal strength, battery life
Features - Secondary characteristics, added features, such as remote control.
Conformance - Meeting specifications or industry standards, workmanship.
Reliability – Consistency of performance over time, average time for the unit to fail.
Durability – Useful life, includes repair
Service – Resolution of problems and complaints, ease of repair.
Response – Human-to-human interface, such as the courtesy of the dealer.
Aesthetics – Sensory characteristics, such as exterior finish
Reputation – Past performance and other intangibles, such as being ranked first

DIMENSIONS OF AND SERVICE QUALITY

Tangibles : Refers to a service’s look or feel
Reliability : Refers to the dependability of the service providers and their ability to keep their
promises.
Responsiveness : Refers to the reaction time of the service.
Assurance : Refers to the level of certainity a customer has regarding the quality of the service
provided.
Empathy : Being able to understand the needs of the customer as an individual and meet the
special requirements of the customer.
Others: Time, Timeliness, completeness, courtesy, consistency, accessibility, accuracy,
competence, access, communication, credibility and security
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Basic concepts of TQM
Total - Made up of the whole Quality- Degree of excellence a product or service provides
Management- Act, Art or manner of handling, controlling, directing, etc...
Why TQM:
1. A question of survival in the intense competitive environment
2. Increasing customer consciousness

DEFINITION:
1. TQM is the management approach of an organization, centered on quality, based on
me participation of all its members and aiming at long-term success through
customer satisfaction. and benefits to all members of me organization and to
society.- ISO
2. TQM is an integrated organizational approach in delighting customers (both internal
and external) by meeting their expectations on a continuous basis through every one
involved with the organization working on continuous improvement in all products,
services, and processes along with proper problem solving methodology - INDIAN
STATISTICAL INSTITUTE ( ISI)
3. TQM is a. people - focused management system that aims at continual increase in
customer satisfaction at continually lower cost. TQM is a total system approach (not
a separate area of program), and an integral part of high level strategy. It works
horizontally across functions and departments, involving all employees, top to
bottom, and exceeds backwards and forward to include the supply chain and the
customer chain – TOTAL QUALITY FORUM OF USA

CHARACTERISTICS
1. Customer Oriented
2. Long term commitment for continuous improvement of all process
3. Team work
4. Continuous involvement of top management
5. Continuous improving at all levels and all areas of responsibility

BASIC CONCEPTS OF TQM:

1. Top management commitment
2. Focus on the customer – Both internal and external
3. Effective involvement and utilization of entire workforce
4. Continuous improvement
5. Treating suppliers as partners
6. Establishing performance measures for the processes

PRINCIPLES OF TQM:
1. Customers requirements - ( both internal & external) must be met first time & every
time
2. There must be agreed requirements, for both internal and external customers.
3. Everybody must be involved
4. Regular two way communication must be promoted
5. Identify the training needs and supply it to the employees
6. Top management commitment is must

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 7. A culture of continuous improvement must be established.
8. Emphasis should be placed on purchasing and supplier management.
9. Every job must add value
10. Eliminate waste & reduce total cost
11. There must be a focus on the prevention of problems.
12. Promote creativity
13. Performance measures are a must at all levels to meet objectives of quality.
14. Focus on team work.

Four Pillars of TQM house:

1.Problem solving discipline 2. Interpersonal skills 3. Team work 4. Quality improvement
process.
PRINCIPLES OF TQM:
1. Customers requirements - ( both internal & external) must be met first time & every
time
2. Everybody must be involved
3. Regular two way communication must be promoted
4. Identify the training needs and supply it to the employees
5. Top management commitment is must
6. Every job must add value
7. Eliminate waste & reduce total cost
8. Promote creativity
9. Focus on team work.

CONTRIBUTIONS BY QUALITY GURUS

To fully understand the TQM movement, we need to look at the philosophies of notable
individuals who have shaped the evolution of TQM. Their philosophies and teachings have
contributed to our knowledge and understanding of quality today.
American Quality Gurus
1. Walter Shewhart (1920 -1940s)
2. W.Edeards Deming (post world war II through 1980s)
3. Joseph .M.Juran (post world war II through 1980s)
4. Philip Crosby (1980s)
5. Armand Feigenbaum (1970s -1980s)

Japanese Quality Gurus

1. Kaoru Ishikawa (post world war II through 1980s)
2.Genichi Taguchi (1960s – 1980s)
3. Shigeo Shingo (post world war II through 1980s)
4. Masaaki Imai (1980s)

Deming Contributions:
1.Deming’s 14 points on route to quality
2.Deming (PDCA) cycle
3.Seven deadly diseases of management

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1.Deming’s 14 points for Management:

1. Create and publicize to all employees the aims and purposes of the organization.
2. Adopt the new philosophy (of customer satisfaction, continuous improvement, defect
prevention, management-labour cooperation, etc.).
3. Stop dependence on inspection to achieve quality. (Managers must understand how
variation affects their processes and take steps to reduce the causes of variation.
Workers must take responsibility for their own work).
4. End the practice of awarding business on the basis of price tag alone. (Costs due to
inferior materials/components increase costs in the later stages of production.
Suppliers themselves are part of the whole system and hence should be treated along-term
partners).
5. Improve constantly and forever the system of production and service .(Aim for small,
incremental, continuous improvements – not merely in the area of production but also covering
transportation, maintenance, sales, service, administration, etc. – all areas of the organization).
6. Institute training. (Employees need the proper tools and knowledge to do a good job,
and it is management’s responsibility to provide these. Training not only improves quality and
productivity, but also enhances workers’ morale).
7. Adopt modern methods of supervision and leadership. (Managers, Supervisors should act
as coaches, facilitators and not as policemen).
8. Drive out fear. (Fear in work manifests as fear of reprisal, fear of failure, fear of change, fear
of the unknown. Fear encourages short-term, selfish thinking, not long term improvement for the
benefit of all).
9. Break down barriers between departments and individuals. (Promote teamwork).
10. Eliminate the use of slogans and exhortations. (Workers cannot improve solely through
motivational methods when the system in which they work constrains their performance. On the
contrary, they will become frustrated, and their performance will decrease further).
11. Eliminate work standards, numerical quotas, and MBO. (Numerical quotas reflect short-
term perspectives and do not encourage long-term improvement. Workers may shortcut quality
to reach the goal. The typical MBO system focuses on results, not processes, and encourages
short-term behavior).
12. Remove barriers to pride in workmanship. (Treating workers as commodities; giving
them monotonous jobs, inferior tools; performance appraisals, management assuming it is
smarter than workers and not using the workers’ knowledge and experience to the fullest extent).
13. Encourage education and self-improvement for everyone.
14. Take action to achieve the transformation. (The TQ philosophy is a major cultural change,
and many firms find it difficult. Top management must take the initiative and include everyone
in it).

2.Deming Cycle:

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 3.Seven Deadly disease of Management
1. Lack of constancy of purpose.
2. Emphasis on short term profits.
3. Reliance on performance appraisal and merits.
4. Staff Mobility.
5. Reliance on Financial figures.
6. Excessive Medical cost.
7. Excessive Legal cost.

CROSBY'S CONTRIBUTIONS
Philip Crosby, author of Quality is Free. Crosby emphasized meeting customer
requirements by focusing on prevention rather than correction.
His "Absolutes" are:
(1) Quality is defined as conformance to requirements, not goodness;
(2) The system for achieving quality is prevention, not appraisal;
(3) The performance standard is zero defects, not that's close enough; and
(4) The measure of quality is the price of non-conformance, not indexes.

14 Principles of Crosby
1. Management commitment, that is, top level management must be convinced and
committed and communicated to the entire company.
2. Quality improvement team composed of department heads to oversee improvements.
3. Quality measurement is established for every activity.
4. Cost of quality is estimated to identify areas of improvement.
5. Quality awareness is raised among all employees.
6. Corrective action is taken.
7. Zero defects are planned for.
8. Supervisor training in quality implementation.
9. Zero defects day is scheduled.
10. Goal setting for individuals.
11. Error causes are removed by having employees informed management of problems.
12. Recognition is given, but it is non-financial, to those who meet quality goals.
13. Quality councils meet regularly.
14. Do it all over again (i.e., repeat steps one through thirteen).
Juran’s Contributions
It can be studied under the following topics:
1. Quality planning

– Establish quality goals.

– Identify who the customers are.
– Determine the needs of the customers.
– Develop product features that respond to customers' needs.
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– Develop processes able to produce the product features.
– Establish process controls; transfer the plans to the process.
2. Quality control
– Evaluate actual performance.
– Compare actual performance with quality goals.
– Act on the difference.
3. Quality improvement
– Prove the need.
– Establish the infrastructure.
– Identify the improvement projects.
– Establish project teams.
– Provide the teams with resources, training, and motivation to:
. Diagnose the causes, and; . Stimulate remedies.
– Establish controls to hold the gains.
Meanwhile, Juran drew “a graph with time on the horizontal axis and cost of poor quality
on the vertical axis”, to describe the zones an areas that belong to the parts of “Juran's Trilogy”.
As depicted in Figure 3, the graph illustrate the three processes of the “Juran's Trilogy” are
interrelated. The first zone is “quality planning”, that planners should find the requirements of
customers by accurate information. Next zone is quality control planners have to design a proper
process to produce the product/s accordant to the needs of customers. In the third zone of
“Juran's Trilogy”, the planners turn the plans over to the operating forces: “You run the process,
produce the product features, and meet the customers’ needs”

He introduced “Ten Steps to Quality Improvement” for improving the satisfaction of

customer, these steps are listed below
1. “Build awareness of the need and opportunity for improvement;
2. Set goals for improvement;
3. Organize to reach the goals (establish a quality council, identify problems, select projects,
appoint teams, and designate facilitators);
4. Provide training;
5. Carry out projects to solve problems;
6. Report progress;
7. Give recognition;
8. Communicate results;
9. Keep score, and;
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10. Maintain momentum by making annual improvement part of the regular systems and
processes of the company”.
Barriers to TQM Implementation
1. Lack of management commitment
2. Lack of faith in and support to TQM activities among management personnel
3. Failure to appreciate TQM as a cultural revolution. In other words, inability to change
organizational culture
4. Misunderstanding about the concept of TQM
5. Improper planning
6. Lack of employees commitment
7. Lack of effective communication
8. Lack of continuous training and education
9. Lack of interest or incompetence of leaders
10. Ineffective measurement techniques and lack of access to data and results
11. Non-application of proper tools and techniques
12. Inadequate use of empowerment and teamwork

Potential Benefits of TQM

Tangible Benefits Intangible Benefits

 Improved product quality  Improved employee participation
 Improved productivity  Improved teamwork
 Reduced quality costs  Improved working relationships
 Increased market and customers  Improved customer satisfaction
 Increased profitability  Improved communication
 Reduced employee grievances  Enhancement of job interest
 Enhanced problem solving capacity
 Better company image

Costs of quality
Costs of quality are costs that occur because poor quality may exist or actually does exist. More
specifically, quality costs are the total of the costs incurred by (1) investing in the prevention of
nonconformance to requirements; (2) appraising a product or service for conformance to
requirements; and (3) failure to meet requirements.
Quality costs are classified into three broad categories: prevention, appraisal, and failure costs.
Prevention Costs. These are costs that are incurred to prevent defects. Amounts spent on quality
training programs, researching customer needs, quality circles, and improved production
equipment are considered in prevention costs. Expenditures made for prevention will minimize
the costs that will be incurred for appraisal and failure.
Appraisal Costs. These are costs incurred for monitoring or inspection; these costs compensate
for mistakes not eliminated through prevention.
Failure Costs. These may be internal, such as scrap and rework costs and reinspection, or
external, such as product returns due to quality problems, warranty costs, lost sales due to poor
product performance, and complaint department costs.
There are two views concerning optimal quality costs:
1. Traditional view that uses an acceptable quality level.
2. World-class view that uses total quality control.

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Optimal Distribution of Quality Costs: Traditional View.
The traditional approach uses an acceptable quality level (AQL) that permits a predetermined
level of defective units to be produced and sold. AQL is the level where the number of defects
allowed minimizes total quality costs. The reasoning of the traditional approach is that there is a
tradeoff between failure costs and prevention and appraisal costs. As prevention and appraisal
costs increase, internal and external failure costs are expected to decrease. As long as the
decrease in failure costs is greater than the corresponding increase in prevention and failure
costs, a company should continue increasing its efforts to prevent or detect defective units.

Optimal Distribution of Quality Costs: World-Class View.

The world-class view uses total quality control and views the optimal level of quality costs as the
level where zero defects are produced. The zero-defects approach uses a quality performance
standard that requires:

1. Prevention costs.
2. Appraisal costs.
3. Internal failure costs.
4. External failure costs.
In addition, each category of quality costs is expressed as a percentage of sales.

Performance reports:
There are four types of performance reports to measure a company's quality improvement.
They are:
Interim Quality Performance Report. It measures the progress achieved within the period
relative to the planned level of progress for the period.
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  One-Year Quality Trend Report. It compares the current year's quality cost ratio with
the previous year's ratio. More specifically, it compares (1) the current year's variable
quality cost ratio with the previous year's variable quality cost ratio, and the current year's
actual fixed quality costs with the previous year's actual fixed quality costs.
 Multiple-Period Quality Report. It shows the overall trend of quality costs by category
since the inception of the quality enhancement program. Once the quality-related
activities are identified for each category, resource drivers can be used to improve cost
assignments to individual activities. Root or process drivers can also be identified and
used to help managers understand what is causing the cost of the activities.

The principal objective of reporting quality costs is to improve and facilitate managerial
planning, control, and decision-making. Potential uses of quality cost information include:

 Quality program implementation decisions.

 Evaluation of the effectiveness of quality programs.
 Strategic pricing decisions; for example, improved reporting of quality costs might be
used by managers to target specific quality costs for reductions. A reduction in quality
costs might enable a firm to reduce its selling price, improve its competitive position, and
increase market share.
 Inclusion of quality costs in cost-volume-profit analysis; for example, overlooking
quality cost savings results in a higher break-even and possible rejection of a profitable
project.
The control process involves comparing actual performance with quality
standards. This comparison provides feedback that can be used to take corrective action, if
necessary.

THE CUSTOMERS
• The most important people in the business
• Not dependent on the organization, but the organization depends on them.
• Not an interruption to work but are the purpose of it.
• Doing a favor when they seek business and not vice-versa.
• A part of business, not outsiders and they are life blood of the business
• People who come with their needs and jobs
• Deserve the most courteous and attentive treatment.

TYPES OF CUSTOMERS

Internal Customer: The customer inside the company are called internal customers
External Customers: An external customer is the one who used the product or service or who
purchase the products or service or who influences the sale of the product or service.

CUSTOMER SATISFACTION

The Customer is the King - Emphasized by Today's Buyers Market. TQM's Purpose is meeting
or exceeding customer expectations, so that the customers are delighted. The customer
satisfactions must be the primary goal of any organization.

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CUSTOMER SATISFACTION MODEL

Teboul‘s Model of customer satisfaction as shown in figure

From the above diagram it is understood that the company should strive for increasing the
intersection portion i.e. Customer Satisfaction.

CUSTOMER COMPLAINTS (FEEDBACK)

Customer feedback must be continuously solicited and monitored to reduce the dissatisfied
customers as much as possible.

CUSTOMER FEEDBACK OR CUSTOMER COMPLAINT IS REQUIRED

1. To discover customer dissatisfaction

2. To identify customer‘s needs
3. To discover relative priorities of quality
4. To compare performance with the competition
5. To determine opportunities, for improvement
TOOLS USED FOR COLLECTING CUSTOMER COMPLAINTS

• Comment card - Low cost method, usually attached to warranty card

• Questionnaire - Popular tool, costly and time consuming - by mail or telephone preferably
multiple choice questions or a point rating system (1 to 5) or (1 to 10)
• Customer Focus groups - Meeting by a representative of the company with the group of
customers. Imprint analysis is an emerging technique to obtain intrinsic feelings using customer
meetings, word associations, discussion, relaxation techniques etc.
• Phone - Toll free Telephone numbers
• Customer visits - Visit customer's place of business.
• Report cards - Usually, send to customer on a quarterly basis.
• The internet and computer - It includes newsgroups, electronic bulletin board mailing lists,
• Employee feedback.
• Mass Customization - Capturing the voice of customers using data of what customer want
instead of what customer is thinking about buying and manufacturing exact what they want.

SOLVE CUSTOMER COMPLAINTS

_ Complaints can be collected from all sources (letters, phone -calls, meetings and verb inputs)
_ Develop procedures for complaint resolution that includes empowering front-line personnel.
_ Analyze complaints, but understand that complaints do not always fit into new categories
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_ Work to identify process and material variations and then eliminate the root cause.
_ When a survey response is received, a senior manager should contact the customer and strive
to resolve the concern.
_ Establish customer satisfaction measures and constantly monitor them.
_ Communicate complaint information, as well as the result of all investigation solution, to
all people in the organization. .
_ Provide a monthly complaint report to the quality council for their evaluation and needed, the
assignment of process improvement teams.
_ Identify customer's expectations beforehand rather than afterward through complaint analysis.

CUSTOMER RETENTION.

More powerful and effective than customer satisfaction It is the process of retaining the existing
customer Customer care can be defined as every activity which occurs within the organization
that ensures that the customer is not only satisfied but also retained.

SIGNIFICANCE OF CUSTOMER RETENTION

• 60% of organizations future revenue will come from existing customers

• 2% increase in customer retention has 10% decreases in operating cost.
• 96% of unhappy customers do not complain but 3 times likely to convey to other customers
about their bad experience.
• 91% of unhappy customers never purchase goods and services from you.
• It costs 5 times more to attract the customer than retaining the existing customer.
• Customer retention creates customer loyalty and moves customer satisfaction to a next level
called customer delight.

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