Lecture Guide 

Introduction to Total Quality Management 

Defining Quality 
Quality is sometimes defined as meeting the requirements of the customer. According to
Quality Improvement Glossary, quality is “a subjective term for which each person or sector
has its definition.” 
One study asked the manager of 86 firms in the Eastern United States to define quality.  These are
some of the responses: 
− Perfection − Providing a good, usable product − Consistency − Delighting or pleasing
customers − Eliminating waste − Total customer service and satisfaction − Speed of
Delivery − Compliance with policies and procedures − Doing it right the first time 

Approaches (Perspectives) to Quality Definition 

According to Professor David Garin that was included in his book Managing Quality, there are five
principal approaches to defining quality: transcendent, product-based, user-based, manufacturing-
based and value-based.  

Transcendent 
According to the transcendent approach or perspective, quality is synonymous with innate
excellence, absolute and universally recognizable (quality cannot be precisely defined): “You will
know it when you see it.” The origin of quality as excellence dates back to the Greek
philosophers who referred to it as the best, the highest form, or the highest ideal. 

According to this approach, the title ‘quality’ should be attributed to those products and services
that achieve the highest standards. But what is to be said of the rest then?  This approach has
some shortcomings. Unlike the Greeks in ancient times philosophizing over the concept of
quality, practitioners in the business world seek something much more practical. For them,
quality should be capable of implementation, delivery, and measurement. We will therefore
consider several more sophisticated definitions of product quality.
Some examples of products associated with excellence are Rolex watches, Ritz-Carlton hotels,
and Lexus automobiles.  

Product-based 
The emphasis in the product-based approach is on quality as a precise and measurable variable.
Any differences (in quality) may reflect differences in the quantity of some ingredient or
attribute possessed by a product. 

Definition of quality can be related to the quantity of several product attributes (thread count for
bed sheets or shirts, or many features of automobiles or cellphones). Usually, good marketing
research is needed to understand what features the customer wants in a product. 

User-based 
This approach starts from the premise that quality lies in the eyes of the beholder.  Consumers
have specific wants or needs, and those products that best meet preferences have the highest
quality. 
 There are two problems with this approach. First, with so many different preferences in the
marketplace, it is hard to arrive at an agreed definition of quality. Second, it tends to equate
quality with satisfaction. A product that maximizes satisfaction is preferable to one that meets
fewer needs, but is it necessarily better? 

The user-based approach focuses exclusively on the customer in the determination of quality.
The strength of this approach is that it allows the customer the say in defining quality. However,
this strength may also be a sight as a weakness. The reason is that expectations can also be
highly varied and personal, which can be problematic.  Furthermore, customers may not be in
the position to articulate their expectations due to a lack of knowledge and understanding. 

Definition of quality can be related to the fitness for intended use, or how well the product
performs its intended function. 

Manufacturing-based  

The user-based approach to quality is rooted in the subjectivity of consumer preferences, while
the manufacturing-based focuses on internal matters. It relates to requirements for conformity.
Predetermined specifications are applied to develop and produce products. Quality control
procedures aid in the detection of deviations from specifications. 

In the case of services, measuring quality may be more difficult. However, under standardization
or routinization (McDonaldization of Services), services are subject to standard operating
procedures or models, which helps in the quality measurement. 

The term McDonaldization was brought about by George Ritzer, who defines it as “the process
by which the principles of the fast-food restaurant are coming to dominate more and more
sectors of American society as well as the rest of the world”.
Value-based 

In contrast to quality as absolute, the value-based approach regards quality relative to price.
According to this view, the buyer’s perception of value represents a mental trade-off between
the quality and benefits perceived to price paid. 

Perceived Value = Perceived benefits / Perceived sacrifice

Buyers, in effect, use price as an index of quality as an index of the sacrifice made in purchasing
it. Price does not always reflect quality. 

Quality Types 

Quality of Design 

Quality of design is the quality that the producer or supplier intends to offer to the customer.
The producer or supplier should ponder the customer's requirements to satisfy the product's
fitness for use. 

If it does not reflect the customer's requirements, the product would not probably satisfy the
customer, even if it does conform to the design. Quality of design is usually indicated by
 completeness and correctness of specifications, drawings, catalogs, and others and measured
with fitness for use. 

Quality of Conformance 

Quality of conformance is the extent of quality of product generated and provided by the
organization's manufacturing or service process following the specifications or design. When the
quality of a product entirely conforms to the specification (design), the quality of conformance is
deemed excellent. 

Specifications are targets and tolerances determined by the designer of a product.  Targets are
the ideal values for which a product is expected to strive; tolerances are acceptable deviations
from ideal values recognizing that it is difficult to meet the exacT targets all the time due to
variability in material, machine, men, and process. 

For example, in the case of a service product like maintenance of law and order by governmental
agencies, the quality of design is reflected in the relevant acts and rules, whereas the quality of
conformance depends upon the extent to which acts, and rules are comply by the enforcement
agencies. Despite having excellent rules and regulations, the quality of law and order of society
cannot be rated as good, if these rules and regulations are not adhered to properly. 

Fitness for use (quality of design) and conformance to specification (quality of conformance)
provide the fundamental basis for managing the processes to produce quality products. Good
quality can be attained only when both, the quality of design and quality of conformance are
good.
Quality of Performance 

It pertains to how sound the product functions or service performs when used. It also measures
the degree to which the product or service pleased the customer for the angle of quality design
with the quality of conformance. Meeting customer expectations is the focus of the quality
performance. 

For example, in the automobile industry, they perform test drives of vehicles to gather
information about mileage and oil consumption. Bulbs are being tested for their useful life. A
customer survey is carried out to discover customers’ perceptions about services rendered.  

Quality Levels 
∙ Organizational Level 
∙ Process Level 
∙ Performer/Job/Task Design Level 

Quality Paradigms 
∙ Custom-craft paradigm 
∙ Mass production and sorting paradigm 
∙ Statistical quality control paradigm 
∙ Total quality management paradigm 
∙ Techno-craft paradigm 

Cost of Quality 
Cost of quality (COQ) is defined as a methodology that allows an organization to determine the
extent to which its resources are used for activities that prevent poor quality, that appraise the
quality of the organization’s products or services, and that result from internal and external
failures. 

Prevention Costs 
Prevention costs are incurred to prevent or avoid quality problems. These costs are associated
with the design, implementation, and maintenance of the quality management system. They are
planned and incurred before actual operation, and they could include: 
∙ Product or service requirements – Establishment of specifications for incoming materials,
processes, finished products, and services 
∙ Quality planning – Creation of plans for quality, reliability, operations, production, and inspection
∙ Quality assurance – planning and continuance of quality system; describes any systematic
process for ensuring quality during the successive steps in developing a product or service. 
∙ Training – development, preparation, and continuance of a program 

Appraisal Costs 
Appraisal costs are associated with measuring and monitoring activities related to quality. These
costs are associated with the suppliers’ and customers’ evaluation of purchased materials,
processes, products, and services to ensure that they conform to specifications. They could
include: 
∙ Verification – Checking of incoming material, process setup, and products against agreed
specifications 
∙ Quality audits – Confirmation that the quality system is functioning correctly ∙ Supplier
rating – Assessment and approval of suppliers of products and services 

Internal Failure Costs 

∙ Waste – Performance of unnecessary work or holding of stock as a result of errors, poor
organization, or communication 
∙ Scrap – Defective product or material that cannot be repaired, used, or sold ∙ Rework or
rectification – Correction of defective material or errors ∙ Failure analysis – Activity required to
establish the causes of internal product or service failure 

External Failure Costs 

External failure costs are incurred to remedy defects discovered by customers. These costs occur
when products or services that fail to reach design quality standards are not  detected until after
transfer to the customer. They could include: 
∙ Repairs and servicing – Of both returned products and those in the field ∙ Warranty claims –
Failed products that are replaced or services that are re performed under a guarantee 
∙ Complaints – All work and costs associated with handling and servicing customers’ complaints 
∙ Returns – Handling and investigation of rejected or recalled products, including transport costs 
 What is Total quality management (TQM)?  
TQM is a set of systematic activities carried out by the entire organization to effectively and
efficiently achieve company objectives to provide products and services with a level  of quality
that satisfies customers at the appropriate time and price. 

To be successful implementing TQM, an organization must concentrate on the eight key

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

These elements can be divided into four groups according to their function. The groups  are:  
I. Foundation – It includes: Ethics, Integrity and Trust.  
II. Building Bricks – It includes: Training, Teamwork and Leadership.  III.
Binding Mortar – It includes: Communication.  
IV. Roof – It includes: Recognition.  

Foundation 
TQM is built on a foundation of ethics, integrity and trust. It fosters openness, fairness  and
sincerity and allows involvement by everyone. This is the key to unlocking the ultimate potential
of TQM. These three elements move together, however, each element  offers something different
to the TQM concept. 
1. Ethics – Ethics is the discipline concerned with good and bad in any situation. It is a  two-faceted
subject represented by organizational and individual ethics.  Organizational ethics establish a
business code of ethics that outlines guidelines  that all employees are to adhere to in the
performance of their work. Individual  ethics include personal rights or wrongs. 

2. Integrity – Integrity implies honesty, morals, values, fairness, and adherence to the  facts and
sincerity. The characteristic is what customers (internal or external)  expect and deserve to
receive. People see the opposite of integrity as duplicity. TQM  will not work in an atmosphere of
duplicity. 

3. Trust – Trust is a by-product of integrity and ethical conduct. Without trust, the  framework of
TQM cannot be built. Trust fosters full participation of all members.  It allows empowerment
that encourages pride ownership and it encourages  commitment. It allows decision making at
appropriate levels in the organization,  fosters individual risk-taking for continuous
improvement and helps to ensure that  measurements focus on improvement of process and are
not used to contend  people. Trust is essential to ensure customer satisfaction. So, trust builds
the  cooperative environment essential for TQM. 

Building Bricks 
Basing on the strong foundation of trust, ethics and integrity, bricks are placed to reach  the roof
of recognition. It includes: 
 4. Training – Training is very important for employees to be highly productive.  Supervisors
are solely responsible for implementing TQM within their departments,  and teaching their
employees the philosophies of TQM. Training that employees require are interpersonal skills,
the ability to function within teams, problem  solving, decision making, job management
performance analysis and improvement,  business economics and technical skills. During the
creation and formation of TQM,  employees are trained so that they can become effective
employees for the  company. 

5. Teamwork – To become successful in business, teamwork is also a key element of  TQM. With the
use of teams, the business will receive quicker and better solutions  to problems. Teams also
provide more permanent improvements in processes and  operations. In teams, people feel
more comfortable bringing up problems that may  occur, and can get help from other workers to
find a solution and put into place.  There are mainly three types of teams that TQM organizations
adopt: 
∙ Quality improvement teams or excellence teams (QITs) – These are temporary  teams with the
purpose of dealing with specific problems that often recur. These  teams are set up for period
of three to twelve months. 
∙ Problem solving teams (PSTs) – These are temporary teams to solve certain  problems and also
to identify and overcome causes of problems. They generally  last from one week to three
months. 
∙ Natural work teams (NWTs) – These teams consist of small groups of skilled  workers who share
tasks and responsibilities. These teams use concepts such as  employee involvement teams,
self-managing teams and quality circles. These  teams generally work for one to two hours a
week. 

6. Leadership – It is possibly the most important element in TQM. It appears  everywhere in

organization. Leadership in TQM requires the manager to provide an  inspiring vision, make
strategic directions that are understood by all and to instill  values that guide subordinates. For
TQM to be successful in the business, the  supervisor must be committed in leading his
employees. A supervisor must  understand TQM, believe in it and then demonstrate their belief
and commitment  through their daily practices of TQM. The supervisor makes sure that
strategies,  philosophies, values and goals are transmitted down throughout the organization  to
provide focus, clarity and direction. A key point is that TQM has to be introduced   and led by top
management. Commitment and personal involvement is required  from top management in
creating and deploying clear quality values and goals  consistent with the objectives of the
company and in creating and deploying well  defined systems, methods and performance
measures for achieving those goals. 

Binding Mortar 
7. Communication – It binds everything together. Starting from foundation to roof of  the TQM
house, everything is bound by strong mortar of communication. It acts as  a vital link between
all elements of TQM. Communication means a common  understanding of ideas between the
sender and the receiver. The success of TQM  demands communication with and among all the
organization members, suppliers  and customers. Supervisors must keep open airways where
employees can send  and receive information about the TQM process. Communication coupled
with the  sharing of correct information is vital. For communication to be credible the 
message must be clear and receiver must interpret in the way the sender intended

There are different ways of communication such as: 

 ∙ Downward communication – This is the dominant form of communication in an  organization.
Presentations and discussions basically do it. By this the supervisors  are able to make the
employees clear about TQM. 
∙ Upward communication – By this the lower level of employees are able to provide  suggestions
to upper management of the effects of TQM. As employees provide  insight and constructive
criticism, supervisors must listen effectively to correct  the situation that comes about
through the use of TQM. This forms a level of trust  between supervisors and employees. This
is also similar to empowering  communication, where supervisors keep open ears and listen
to others. 
∙ Sideways communication – This type of communication is important because it  breaks down
barriers between departments. It also allows dealing with  customers and suppliers in a more
professional manner. 

Roof 
8. Recognition – Recognition is the last and final element in the entire system. It should  be provided
for both suggestions and achievements for teams as well as individuals.  Employees strive to
receive recognition for themselves and their teams. Detecting  and recognizing contributors is
the most important job of a supervisor. As people  are recognized, there can be huge changes in
self-esteem, productivity, quality and  the amount of effort exhorted to the task at hand.
Recognition comes in its best form  when it is immediately following an action that an employee
has performed.  Recognition comes in different ways, places and time such as, 
∙ Ways – It can be by way of personal letter from top management. Also by award  banquets,
plaques, trophies etc. 
∙ Places – Good performers can be recognized in front of departments, on  performance boards
and also in front of top management. 
∙ Time – Recognition can give at any time like in staff meeting, annual award  banquets, etc. 

Core Concepts of TQM 

∙ Customer satisfaction  
∙ Internal customers satisfaction 
∙ All work is process 
∙ Measurement  
∙ Synergy in teamwork  
∙ People make quality  
∙ Continuous improvement cycle 
∙ Prevention 

Strategic Dimensions of Quality 

The eight dimensions of quality were defined by David A. Garvin. He was a Professor of  Business
Administration at Harvard Business school and his publications on quality  were based on his
research on U.S. manufacturers. 

What are the eight dimensions of quality?

A quality product is a product that meets the expectations of the customers. The eight  dimensions
of quality help producers to meet these expectations. It is a strategic  management tool that can
be used as a framework to analyses characteristics of quality.  The eight dimensions are
performance, features, reliability, conformance, durability,  serviceability, aesthetics, and
perceived quality. 
Performance 
Performance has to do with the expected operating characteristics of a product or  service. Does a
service or product do what it’s supposed to do? The primary operating  characteristics involve
measurable elements, which makes it easier to objectively  measure the performance. 

Some of the performance requirements are related to subjective preferences, but when  they are
the preference of almost every consumer they become as powerful as an  objective requirement. 

Features 
What the dimension ‘performance’ doesn’t focus on are the features, the characteristics  that
decide how appealing a product or service is to the consumer. Such features are the  extras of a
product or service and complement its basic functioning. This means that the  ones designing a
product or service should be familiar with the end-users and should  be updated on developments
in consumer preferences. Often it’s difficult to see a clear  line between primary performance
attributes and additional features. 

An example of features in service is offering free drinks on a plane. An example of  features in
products is adding a drink cooler in the car. 

Reliability 
Reliability is usually closely related to performance. The focus of the dimension  reliability is
more on how long a product will perform consistently according to the  specifications of that
product. This is important to customers who need the product to  work without any errors and
contributes to a brand or company’s image. 

The dimension reliability shows the probability of the product having signs of error  within a
specific time of period. For measuring reliability you should measure the time  to the first failure,
how much time there is between failures, and the failure rate per a  specific time of period? 

These measures are usually applied to products that are expected to last for a longer  time and
not so much for products that are meant to be used directly and for a shorter   time period. Usually
when the costs for maintenance or downtime increase, reliability  as a dimension of quality
becomes more important to consumers. 

For example, for parents with children who depend on a car, the reliability of the car  becomes an
important element. Also for most farmers, reliability is a key attribute. This  group of consumers
is sensitive to downtime, especially during the shorter harvest  seasons. For a farmer, reliable
equipment can be crucial in preventing spoiled crops.  Also, the reliability of computers is key for
many consumers.
Conformance 
This dimension is closely related to the dimensions performance and features. The  dimension of
conformance is about to what extent the product or service conforms to  the specifications. Does
it function and have all the features as specified? Every product  and service has some sort of
specifications that comes with it. 

For example, the materials used or the dimensions of a product can be specified and set  as a
target specification for the product. Something that can also be defined in the  specification is the
tolerance, which states how much a product is allowed to deviate  from the target. Problematic
with this approach is that it makes it easier for producers  to focus less on if the specifications
have been met as long as they’ve met the tolerance  limits. 
When it comes to service businesses, conformance is measured by focusing on the  accuracy, the
number of processing errors, unexpected delays and other common  mistakes. 

Durability 
Out of the eight dimensions of quality, the dimension durability is about how long a  product will
last or perform and under what conditions it will perform. Estimating the  length of a product’s
life becomes complicated when it’s possible to repair the product. For such products, the
durability will be counted until it is no longer economically  beneficial to use it. This is when the
repairs and the costs of repairing increase.  Customers then must weigh the costs for future
repairs against the costs of investing in  a new one together with its operating expenses. In other
cases, durability is measured  by the amount someone can use a product before it stops working
and repair is  impossible. 

This, for example, is the case when a light bulb burns up and must be replaced by a new  one. In
this case, repairing it is impossible. 

Serviceability 
Serviceability is one of the eight dimensions of quality that reflects on if the product is  relatively
easy to maintain and repair. This becomes important for consumers who are  more focused on the
total cost of ownership as criteria for selecting a product.  Serviceability reflects on how easy it is
for the consumer to obtain repair service, how  responsive the service personnel is, and how
reliable the service is. It also focuses on  the speed with which a product can be repaired and also
the competence and behavior of the personnel. 

Customer’s concerns are mainly about the product getting defects, but also how long it  takes for
the product to be repaired. It is not only important if a product can be fixed,  but also how
satisfied the customer is about the company’s complaint handling  procedures.
This can affect how the customer evaluates the service quality and eventually the  company’s
reputation. Each company has a different way of dealing with complaint  handling and not every
company attaches the same level of importance to serviceability. For example, there are
companies that do their best to resolve the complaints they  receive, while others don’t offer any
service when it comes to complaints. An example  of improving a company’s serviceability is by
installing a cost-free phone number to  reach the helplines. 

Aesthetics 
The aesthetics dimension is all about the way a product looks and contributes to the  company’s
identity or a brand. Aesthetics is not only about how a product looks but also  about how it feels,
tastes, smells or sounds. 

This is clearly determined by individual preference and personal judgement, however,  there is a
way to measure this dimension. There are some clear patterns found in the  way consumers rank
products based on personal taste. Still, the aesthetics of a product  is not as universal as the
dimension ‘performance’. 

Not all people prefer the same taste or smell, which makes it impossible to please every  single
customer. For this reason, companies end up searching for a niche. 

Perceived Quality 
The perception of something is not always reality. Meaning that a product or service can  have
high scores on each of the seven dimensions of quality, but still receive a bad rating   from
customers as a result of negative perceptions from customers or the public. 

Customers sometimes lack information about a service or product and for comparing  brands will
rely on indirect reviews. This is usually the case when it comes to a product’s  durability because
in most cases it can’t be observed directly. 

Also, reputation plays a significant role when it comes to perceived quality. It’s easier  for a
customer to trust the quality of a company’s new product when the established  products
received positive reviews. 

Dimensions of Service Quality 

What exactly is service quality? It refers to how a  company's customer service compares to the  
expectations of its consumers. 

An increase in customer loyalty and happiness  arises when a company provides a customer  

experience that meets or exceeds its expectations.  Service quality is an essential component of
the  whole customer experience, and knowing how to measure service quality is critical.

Dimension Definition Example

Tangibles Includes the physical appearance of  the Cleanliness of the

physical service facilities, the  equipment, the environment; personnel 
personnel who do  the servicing, the uniform; vehicles; flight
communication  materials and all tangible
elements  of service provider facilities or 
surroundings

Service Differs from the product reliability  in that it Achieving delivery times 
reliability relates to the ability of the  service provider stated on the website
to perform the  promised service dependably
and  accurately

Responsiveness The willingness of the service  provider to be The speed of helping 

helpful, be prompt in  providing services, and customer online or by 
to respond  to customers’ requests, problems telephone
or  complaints

Assurance The knowledge and courtesy of  employees The excellent reputation 
and their ability to  inspire trust and and high levels of trust 
confidence – creating trust and confidence based on previous
will  gain the customers’ loyalty experiences with the 
company

Empathy Caring, individual attention paid to  Employees’ high

customers by the service firm to  meet each emphasis on customer 
customer’s demands  properly. requests to achieve
 higher satisfaction

Gurus of Total Quality Management

“My 14 Points for Management follow naturally as application of the System of  Profound

Knowledge for transformation  from the present style of management to one of optimization.” 
– Dr. Deming 

“We must preserve the power of  intrinsic motivation, dignity,  cooperation, curiosity, joy in
learning,  that people are born with.”  
– Dr. Deming 

Dr. William Edwards Deming is often  referred as the “Father of Quality  Control.” The Deming
Prize, the highest  award for quality in Japan, is named after his honor.
Deming’s 14 Points on Quality Management, or the Deming Model of Quality  Management, a core
concept on implementing total quality management (TQM), is a set  of management practices to
help companies increase their quality and productivity. 

Deming's 14 Points for Total Quality Management 

1. Create constancy of purpose for improving products and services. 2. Adopt
the new philosophy. 
3. Cease dependence on inspection to achieve quality. 
4. End the practice of awarding business on price alone; instead, minimize total  cost by
working with a single supplier. 
5. Improve constantly and forever every process for planning, production and  service. 
6. Institute training on the job. 
7. Adopt and institute leadership. 
8. Drive out fear. 
9. Break down barriers between staff areas. 
10. Eliminate slogans, exhortations and targets for the workforce. 
11. Eliminate numerical quotas for the workforce and numerical goals for 
management. 
12. Remove barriers that rob people of pride of workmanship, and eliminate the  annual rating
or merit system. 
13. Institute a vigorous program of education and self-improvement for everyone. 14. Put
everybody in the company to work accomplishing the transformation. 

These total quality management principles can be put into place by any organization to  more
effectively implement total quality management. As a total quality management  philosophy, Dr.
Deming’s work is foundational to TQM and its successor, quality  management systems. 

In the third chapter of Out of the Crisis, titled “Diseases and Obstacles,” Dr. Deming  explores, in
great detail, the diseases listed below: 
1. Lack of constancy of purpose to plan product and service that will have a market  and keep the
company in business, and provide jobs. 
2. Emphasis on short-term profits: short-term thinking (just the opposite from  constancy of
purpose to stay in business), fed by fear of unfriendly takeover, and  by push from bankers
and owners for dividends. 
 3. Evaluation of performance, merit rating, or annual review. 
4. Mobility of management; job hopping. 
5. Management by use only of visible figures, with little or no consideration of  figures that are
unknown or unknowable. 
6. Excessive medical costs. As reported by Dr. Deming in Out of the Crisis (pages 97- 98),
executives shared with him that the cost of medical care for their employees  was amongst
their largest overall expenses, not to mention the cost of medical  care embedded in the
purchase price of what they purchased from their  suppliers. 
7. Excessive costs of liability, swelled by lawyers that work on contingency fees.
Philip Crosby is best known for: 
∙ Quality is Free - His first book that made him famous. 
∙ Zero Defects - One of his four absolutes of quality. 
∙ The Four Absolutes of Quality 
∙ The Crosby Vaccine - for management to prevent poor quality 
∙ The Fourteen Steps of Quality Improvement 

A Brief Introduction: 
The founder and chairman of the board of Career IV, an executive management  consulting firm.
Crosby also founded Philip Crosby Associates Inc. and the Quality  College. He has authored many
books, including Quality is free, Quality without tears,  Let's talk Quality, and Leading: The art of
becoming an executive. Crosby originated the  concept of zero defects. 

Four Absolutes of Quality 

Crosby's response to the quality crisis was the principle of "doing it right the first time"  (DIRFT).
He also included four major principles: 
∙ The definition of quality is conformance to requirements (not as goodness) ∙ The
system of quality is prevention (not appraisal) 
∙ The performance standard is zero defects (not “that’s close enough”). ∙ The
measurement of quality is the price of nonconformance (not indexes) 

The Crosby Vaccine - In the Crosby style, the “Vaccine” is explained as medicine for  management to
prevent poor quality. It is in five sections that cover the  requirements of Total Quality
Management. 
Integrity - Treat quality seriously throughout the whole business organization from top  to
bottom. That the company’s future will be judged on its performance on quality. Systems -
Appropriate measures and systems should be put in place for quality costs,  education, quality,
performance, review, improvement and customer satisfaction. Communication - The
communication systems are of paramount importance to  
communicate requirements and specifications and improvement opportunities  around the
organization. Customers and operators know what needs to be put in  place to improve and
listening to them will give you the edge. 
Operations - Work with and develop suppliers. Processes should be capable and  improvement
culture should be the norm. 
Policies - Policies must be clear and consistent throughout the business. 

The Fourteen Steps to Quality Improvement 

1. Management Commitment - Make it clear that management is committed to  quality. 
2. Quality Improvement Teams - Form Quality Improvement Teams with senior 
representatives from each department. 
 3. Measure Processes - Measure processes to determine where current and  potential quality
problems lie. 

4. Cost of Quality - Evaluate the cost of quality and explain its use as a  management tool.
5. Quality Awareness - Raise the quality awareness and personal concern of all  employees. 
6. Correct Problems - Take actions to correct problems identified through  previous steps. 
7. Monitor Progress - Establish progress monitoring for the improvement  process. 
8. Train Supervisors - Train supervisors to actively carry out their part of the  quality
improvement program. 
9. Zero Defects Day - Hold a Zero Defects Day to reaffirm management  commitment. 
10. Establish Improvement Goals - Encourage individuals to establish  improvement goals for
themselves and their group. 
11. Remove Fear - Encourage employees to tell management about obstacles to  improving
quality. 
12. Recognize - Recognize and appreciate those who participate. 
13. Quality Councils - Establish Quality Councils to communicate on a regular  basis. 
14. Repeat the Cycle - Do it all over again to emphasize that the quality  improvement process
never ends. 

Dr. Joseph Moses Juran 

Juran is best known for: 

∙ Juran's Trilogy - Juran's trilogy consists of Quality Planning, Quality Control, and  Quality
Improvement. 
∙ 10 Steps of Quality Improvement 
∙ Quality Control Handbook — Juran published the first edition of the Quality Control  Handbook in
1951. 
∙ Cost of Quality - Juran defined the Cost of Quality as tangible and intangible costs. ∙ Pareto
Principle - Juran emphasized the application of the Pareto Principle (80:20  rule) in the field of
Quality Management. 

∙ 1951: Joseph Juran publishing Quality Control Handbook. 

∙ The Mid 50s: Like Deming, Joseph Juran travelled to Japan to conduct the Quality  Management
seminars for top and middle-level executives. 

Juran's Trilogy 
Juran's Quality Trilogy is an approach to cross-functional management that is composed  of three
managerial processes: planning, control, and improvement. 

Quality Planning is the activity of developing the products and processes required to  meet
customer's needs. It involves: 
• Establish quality goals 
• Identify the customers- those who will be impacted by the efforts to meet the  goal. 

• Determine the customers' needs

• Develop product features that respond to customers' needs 
• Develop processes that can produce those product features
• Establish process controls, and transfer the resulting plans to the operating  forces 
Quality Control 
This process consists of the following steps: 
• Evaluate actual quality performance 
• Compare actual performance to quality goals 
• Act on the difference 
Cost of Quality 
The cost of quality, or not getting it right the first time, Juran maintained should be   recorded and
analyzed and classified into failure costs, appraisal costs and prevention  costs. 
• Failure Cost - Scrap, rework, corrective actions, warranty claims, customer  complaints and loss
of custom 
• Appraisal Cost - Inspection, compliance auditing, and investigations • Prevention Cost -
Training, preventive auditing, and process improvement  implementation 

Pareto Principle - Juran emphasized that 80% of problems are created by 20% causes. 
Organizations should identify the vital few (20%) causes and take actions to remove  them from
the system. 

Quality Improvement - 10 Steps 

Juran proposed ten steps to quality improvement: 
1. Build awareness of the need and opportunity to improve 
2. Set goals for that improvement 
3. Create plans to reach the goals 
4. Provide training 
5. Conduct projects to solve problems 
6. Report on progress 
7. Give recognition for success 
8. Communicate results 
9. Keep score 
10. Maintain momentum 

Dr. Walter Andrew Shewart 

Walter Andrew Shewhart was an American physicist engineer and statistician,  sometimes known
as the father of statistical quality control. 
Most of Shewhart's professional career was spent as an engineer at Western Electric  from 1918
to 1924, and at Bell Telephone Laboratories, where he served in several  capacities as a member
of the technical staff from 1925 until his retirement in 1956. He also lectured on quality control
and applied statistics at the University of London,  Stevens Institute of Technology, the graduate
school of the U.S. Department of  Agriculture, and in India. 
• He is also known as “Grandfather of Quality Control.” 
• Control charts (Control Charts laid the foundation of Statistical Process Control  (SPC) and
modern quality improvement practices, including Six Sigma) are also  known as Shewhart
charts (after Walter A. Shewhart ).
• Shewhart classified the causes of variation as "assignable cause" and "chance  cause". 
• The original founder of the PDCA cycle (Plan-Do-Check-Act) is Walter A.  Shewhart. Edwards
Deming promoted the use of the PDCA cycle for process  improvement and later changed it to
the PDSA cycle (Plan-Do-Study-Act). 

Dr. Armand Feigenbaum 

Feigenbaum is best known for: 
• Total Quality Control 
• Hidden Plant 
• Quality Costs 

Armand V. Feigenbaum is an American quality control expert and businessman.  Feigenbaum is

the founder and president of General System Co., an international  engineering company that
designs and implements total quality systems. 

Feigenbaum originated the concept of total quality control in his book Total Quality  Control. This
concept laid the foundation of Total Quality Management (TQM). 

1961: Feigenbaum originated the concept of Total Quality Control in his book titled Total Quality
Control. This concept later laid the foundation of Total Quality  Management (TQM). 

Armand V. Feigenbaum is also known for his concept of the hidden plant. That is that  in every
factory a certain proportion of its capacity is wasted through not getting it right  the first time.
Feigenbaum quoted a figure of up to 40% of the capacity of the plant is  wasted. At the time this
was an unbelievable figure; even today some managers are still  to learn that this is a figure not
too far removed from the truth. 

Crucial elements of Total Quality 

1. Quality is the customer's perception of what quality is, not what a company  thinks it is 
2. Quality and cost are the same not different 
3. Quality is an individual and team commitment 
4. Quality and innovation are interrelated and mutually beneficial 5.
Managing Quality is managing the business 
6. Quality is a principal 
7. Quality is not a temporary or quick fix but a continuous process of improvement 8.
Productivity gained by cost-effective demonstrably beneficial Quality  investment 
9. Implement Quality by encompassing suppliers and customers in the system Prof.

Kaoru Ishikawa 

Ishikawa is best known for: 

• Ishikawa Diagram - Also known as Cause-and-effect Diagram or Fishbone  Diagram.
• Seven Basic Quality Tools - Seven Basic Quality Tools were first emphasized  by Ishikawa. 
• Quality Circles - Ishikawa introduced the concept of Quality Circles. This is an  essential part of
Total Quality Management (TQM). 
• Company-wide Quality - Ishikawa believed that quality must be company wide. 

Kaoru Ishikawa served as president of the Japanese Society for Quality Control and the  Musashi
Institute of Technology and co-founded and served as president of the  International Academy for
Quality. Upon retirement, he was named professor emeritus  of the University of Tokyo, Honorary
Member of ASQ and the honorary member of the  International Academy for Quality. 

He wrote 647 articles and 31 books, including two that were translated into English: 
"Introduction to Quality Control" and "What Is Total Quality Control? The Japanese  Way". 
He is well known for coming up with the concept for the fishbone shaped diagram,  known as the
Ishikawa or cause and effect diagram, used to improve the performance  of teams in determining
potential root causes of their quality problems. 

He developed and delivered the first basic quality control course for the Union of  Japanese
Scientists and Engineers (JUSE) Credited with creating the Japanese quality  circle movement. 

ASQ named a national medal after him, recognizing him as a distinguished pioneer in  the
achievement of respect for humanity in the quality disciplines. 

• 1949 - Developed and delivered the first basic quality control course for the  Union of Japanese
Scientists and Engineers (JUSE) 
• 1962 - Credited with creating the Japanese quality circle movement. • 1993 - ASQ named a
national medal after him, recognizing him as a  “distinguished pioneer in the achievement of
respect for humanity in the quality  disciplines.” 
The Ishikawa Diagram is also called as the Fishbone diagram and the Cause-and-Effect Analysis.
This is the most commonly used to analyze a problem and to find out the  potential causes
creating the problem. 
Ishikawa Diagram is one of the Seven Basic Quality Tools promoted by Ishikawa.

Seven Basic Quality Tools: 

1. Flow charts (At some places this  
tool is replaced  
by Stratification or Run Chart) 
2. Scatter diagrams 
3. Pareto Charts 
4. Histogram 
5. Check sheets 
6. Cause and Effect Diagram 
7. Control charts 

Quality Circles 
Quality Circle is a small group of employees working in the same area, or doing the same   type of
job. This group regularly meets for one hour every week to identify and  collectively resolve the
problems in the work area. They use Seven Basic Quality tools to  understand the causes and to
propose solutions. 

Company-wide Quality 
Kaoru Ishikawa emphasized that every function in the organization contributes to  quality. He
emphasized the concept of internal customers and Company-wide Quality.  This requires the
involvement of all from the top management to the front-line workers.  He suggested the
following benefits of Company-wide Quality approach. 
• Reduced defects 
• Improved product quality 
• The quality improvement becomes the norm rather than the exception • Increased
reliability 
• Reduced costs 
• Wastes are identified and reduced 
 • Rework is identified and reduced 
• Improvement techniques are established and the product and processes are  continually
improved 
• Inspection and after-the-fact expenses are reduced 
• Sales and market opportunities are increased 
• Company reputation is increased 
• Interdepartmental barriers are broken down and communication becomes  easier 
• False and inaccurate data is reduced 
• Improvement in human relations 
• Company loyalty is increased 

Genichi Taguchi
Genichi Taguchi is best known For: 
∙ Taguchi Methods 
∙ Taguchi Loss Function 
∙ Design of Experiments 
∙ Robust Design 
∙ Quality Engineering 

The executive director of the American Supplier Institute, the director of the Japan  Industrial
Technology Institute, and an honorary professor at Nanjing Institute of  Technology in China.
Genichi Taguchi is well known for developing a methodology to  improve quality and reduce
costs, which, in the United States, is referred to as the  Taguchi Methods. He also developed the
quality loss function. 

• Mid 50's: Genichi Taguchi was Indian Statistical Institutes visiting professor, where  he met Walter
Shewhart. 
• 1960: Genichi Taguchi was awarded the Deming Application prize • 1986: Willard F
Rockwell Medal by the International Technologies Institute 

Taguchi's methodology 
Taguchi's methodology is geared towards pushing the concepts of quality and reliability  back
into the design stage, i.e. prior to manufacturing. 
His method provides an efficient technique for designing product tests prior to  beginning
manufacturing. 
Taguchi methodology is fundamentally a prototyping technique that enables engineers/ 
designers to produce a robust design that can survive repetitive manufacturing to  deliver the
functionality required by the customer. 
Taguchi considered the design to be more critical than Quality Control in manufacturing 
processes. 

Taguchi Loss Function 

In the traditional goalpost mentality a product is considered good or bad, depending or  whether
or not it is within the specification range (between the lower and upper spec  limits i.e. the
goalposts). 

With this approach, the specification range is more important than the nominal (target)  value.
But, is the product as good as it can be, or should be, just because it is within specifications?
Taguchi says no to this. 
Taguchi specified three situations: 
• Larger the better (for example, process yield); 
• Smaller the better (for example, emissions, rejection rate); and 
• On-target, minimum-variation (for example, a mating part dimensions in an  assembly). 
Robust Design - Taguchi's Three Stages of Product Development: The philosophy of off-
line quality control, designing products and processes so that they are insensitive ("robust") to
parameters outside the design engineer's control.

∙ System design stage 

The non-statistical stage for engineering, marketing and customer knowledge. ∙
Parameter stage 
How should the product perform against defined parameters? The robust solution  of cost-
effective manufacturing irrespective of the operating parameters. ∙ Tolerance design stage 
Tolerance around the desired settings. Finding the balance between  manufacturing cost
and loss. 

Dr. Shigeo Shingo 

Shigeo Shingo is best known for: 

• Poka-yoke – is a Japanese term that means “mistake-proofing”. The concept  was formalized,
and the term adopted, by Shigeo Shingo as part of the Toyota  Production System. 
• Single-Minute Exchange of Die (SMED) – is one of the many lean production  methods for
reducing waste in manufacturing processes. It provides a rapid and  efficient way of
converting a manufacturing process from running the current  product to running the next
product. This rapid changeover is key to reducing  production lot sizes and thereby improving
flow. 
• Just in time (JIT) – is a production strategy that strives to improve a business’  return on
investment by reducing in-process inventory and associated carrying  costs. 

Shigeo Shingo was born in 1909 at Saga City, Japan where he attended the Saga  Technical High
School. After graduation from Yamanashi Technical College in 1930, he  went to work for the
Taipei Railway Company. In 1943 Shingo was transferred to the  Amano Manufacturing Plant in
Yokohama. 

Shingo worked for several manufacturers in 1945 and 1946 and also began a long  association
with the Japanese Management Association (JMA). 

• 1946-1954: Shingo had many assignments, delivered several important papers  and
crystallized his ideas on process and plant layout. He also applied Statistical  Process Control. 
• Shingo had been involved all over Japan in the training of thousands of people,  who joined his
courses on the fundamental techniques of analysis and  improvement of the operational
activities in factories. 
• 1955: Dr. Shingo began a long association with Toyota. It is during this period  that he first
started work on setups by doubling the output of an engine bed  planer at Mitsubishi's
shipyard. 
• 1959: Dr. Shingo left JMA to start his own consulting company. 
• The 1960s: During the early 1960s, as an outgrowth of work with Matsushita,  he developed his
concepts of Mistake-Proofing. 
• 1969: SMED was originated when he cut the setup time on a 1000 ton press at  Toyota from 4.0
hours to 3.0 minutes. 
• The 1970s: During the 1970s, Shingo travelled in Europe and North America on  many
lectures, visits and assignments. He began to see Toyota's efforts as an integrated system
and began to assist several U.S. and European firms in  implementation. 
• Utah State University recognized Dr. Shingo for his lifetime accomplishments  and created the
Shingo Prize for Operational Excellence that recognizes world class, lean organizations and
operational excellence. 

Poka-yoke is a Japanese term that means mistake-proofing. A poka-yoke is any  mechanism in a

lean manufacturing process that helps an equipment operator avoid  (yokeru) mistakes (poka).
Its purpose is to eliminate product defects by preventing,  correcting, or drawing attention to
human errors as they occur. 

Shigeo Shingo recognized three types of poka-yoke for detecting and preventing errors  in a mass-
production system. 
1. The contact method: The contact method identifies product defects by testing the  product's
shape, size, color, or other physical attributes. 
2. The fixed-value method: The fixed-value (or constant number) method alerts the  operator if a
certain number of movements are not made. 
3. The motion-step method: The motion-step (or sequence) method determines  whether the
prescribed steps of the process have been followed.

MODULE 2

Lecture Guide 

Kaizen 

Kaizen is a philosophy of continuous improvement, a belief that all aspects of life should  be
constantly improved. In Japan, where the concept originated, it applies to all aspects  of life, not
just the workplace. 

Japanese term for a gradual approach to ever higher standards in quality enhancement  and waste
reduction, through small but continual improvements involving everyone  from the chief
executive to the lowest level workers or all stakeholders. 

Kaizen, or ‘Continuous Improvement’ is a policy of constantly introducing small  incremental

changes in a business in order to improve quality and/or efficiency.  
Kaizen was first practiced in Japanese businesses after World War II, influenced in part  by
American business and quality-management teachers, and most notably as part  of The Toyota
Way. It has since spread throughout the world and has been applied to  environments outside
business and productivity. 

Kaizen can be roughly translated from Japanese to mean "good change." The philosophy  behind
kaizen is often credited to Dr. W. Edwards Deming. Dr. Deming was invited by  Japanese industrial
leaders and engineers to help rebuild Japan after World War II. 

The five main elements of kaizen  

∙ Teamwork  
∙ Personal discipline  
∙ Improved morale  
∙ Quality circles  
∙ Suggestions for improvement  

Some Key features of Kaizen:  

∙ Improvements are based on many, small changes rather than the radical  changes that might
arise from Research and Development
∙ As the ideas come from the workers themselves, they are less likely to be  radically different, and
therefore easier to implement  
∙ Small improvements are less likely to require major capital investment than  major process
changes  
∙ The ideas come from the talents of the existing workforce, as opposed to using  R&D,
consultants or equipment – any of which could be very expensive  ∙ All employees should
continually be seeking ways to improve their own  ∙ performance  
∙ It helps encourage workers to take ownership for their work, and can help  reinforce team
working, thereby improving worker motivation  

Benefits  
The goal of kaizen is to eliminate waste in the process  
∙ Making job easier  
∙ Making job safer  
∙ Making job more productive  
∙ Removing donkeywork from the job  
∙ Removing irritation from the job  
∙ Improving product quality  
∙ Saving time and cost 

Kaizen Principle or Objective 

The kaizen objective is the continuous improvement in the product and  process quality by
eliminating waste from the process or services by identifying values  and involving everyone. 
∙ Continuous improvement in product and process quality by identifying values. ∙ Eliminate
Muda or Waste 
∙ Lower rejection/defects and cost 
∙ Increase Productivity 
∙ Promote Innovation 
∙ Increase worker’s morale and accountability through effective participation 
Kaizen Process 
Kaizen event process generally follows Deming’s PDCA process approach. The seven step
approach for kaizen process implementation based on the PDCA cycle is:

∙ Get the workers involved: Involve the workers and get their ideas or  suggestions through the
kaizen suggestion system. 
∙ Identify the problem: Collect the list of ideas/suggestions in order to identify  the issues or
problems. 
∙ Analyze the problem: Analyze the problem by observing the present  process/condition and
investigate the probable root cause. 
∙ Develop the solution: Identify the alternate solutions/ideas and select the best  solution after
validating all identified solutions. 
∙ Implement solution: Implement the permanent solution/action against the real  identified root
cause. 
∙ Analyze the result: Monitor the effectiveness of the implemented solution. ∙ Standardize
the solution: If the result found effective then do the horizontal  deployment of the
implemented solution at other areas/workplaces/machines  and others. 

In the development and application of Kaizen, knowledge and related techniques are  integrated
such as: 
Organizational Behavior, Finance, Operations Management, Industrial Engineering,  Quality,
Maintenance, Productivity, Innovation, Logistics, among others, are integrated.  

Under the Kaizen structure, methods and tools are involved and interrelated such as:  Total
Quality Control, Quality Circles, Suggestion Systems, Automation, Total Productive  Maintenance,
Kanban, Quality Improvement, Just in Time, development of new  products, Improvement, among
others. 
Some of the advantages of implementing Kaizen include, but are not limited to: ∙
Utilization of Resources – Kaizen focuses on improving products through  utilization of
existing resources (your people) to achieve incremental and  continuous improvement.
Kaizen is centered around making small changes instead of relying on massive changes or
expensive equipment investments to  gain improvements. 
∙ Increased Efficiency – Central to Kaizen methodology is the importance of  providing a well-
planned work area, eliminating unnecessary movement or  operations and proper training for
all employees. 
∙ Employee Satisfaction – Kaizen is about creating an atmosphere of teamwork  and change,
where new ideas are encouraged. Team members are asked to  really examine the processes
and make suggestions for improvement. 
∙ Safety Improvements – A safer work environment is another benefit of Kaizen.  The safety
improvements occur when new ideas to clean up and organize the  work area are developed
and implemented. 

Other known Advantages and Disadvantages of Kaizen 

There are several reasons why Kaizen can be an advantage for an organization;  however, there
are some situations for which it is less suited. Some of Kaizen's  advantages and disadvantages
include the following: 

Kaizen advantages 
∙ Kaizen's focus on gradual improvement can create a gentler approach to change  in contrast to
big efforts that may be abandoned due to their tendency to  provoke change resistance and
pushback. 
∙ Kaizen encourages scrutiny of processes so that mistakes and waste are  reduced. 
∙ With fewer errors, oversight and inspection needs are minimized. ∙ Employee morale
improves because Kaizen encourages a sense of value and  purpose. 
∙ Teamwork increases as employees think beyond the specific issues of their  department. 
∙ Client focus expands as employees become more aware of customer  requirements. 
∙ Systems are in place to ensure improvements are encouraged both in the short  and long terms. 

Kaizen disadvantages 
∙ Companies with cultures of territorialism and closed communication may first  need to focus
on cultural changes to create a receptive environment. ∙ Short-term Kaizen events may create
a burst of excitement that is shallow and  short-lived and, therefore, is not sustained. 

Examples of Kaizen 
Toyota is arguably the most famous for its use of Kaizen, but other companies have  successfully
used the approach. Here are three examples: 
∙ Lockheed Martin. The aerospace company is a well-known proponent of Kaizen. It  has used the
method to successfully reduce manufacturing costs, inventory and  delivery time. 
∙ Ford Motor Company. When lean devotee Alan Mulally became CEO of Ford in  2006, the
automaker was on the brink of bankruptcy. Mulally used Kaizen to  execute one of the most
famous corporate turnarounds in history.

∙ Pixar Animation Studios. Pixar applied the continuous improvement model to  reduce the risks of
expensive movie failure by using quality control checks and  iterative processes. 

Just In Time (JIT) 

An inventory strategy companies employ to increase efficiency and decrease waste by  receiving
goods only as they are needed in the production process, thereby reducing  inventory costs.  
Just-in-time (JIT) is an inventory strategy that strives to improve a business’s return on 
investment by reducing in-process inventory and associated carrying costs. This saves 
warehouse space and costs. However, the complete mechanism for making this work is  often
misunderstood.  

Just-in-time manufacturing was a concept introduced to the United States by the  Ford
motor company.  

Some benefits of JIT include:  

∙ Reduced setup time.  
∙ The flow of goods from warehouse to shelves improves.  
∙ Employees with multiple skills are used more efficiently.  
∙ Production scheduling and work hour consistency synchronized with demand.  ∙ Increased
emphasis on supplier relationships.  
∙ Supplies come in at regular intervals throughout the production day.  ∙ Minimizes
storage space needed.  
∙ Smaller chance of inventory breaking/expiring.

TPM (Total Productive Maintenance)

TPM is referred to as total productive maintenance but Toyota increasingly replace  "productive"
with professional. The aim is to have zero breakdowns with the use of  systematic maintenance
techniques. The maintenance team progressively strive to  guarantee that equipment will be
available for 100% of the required time.  

The six basic principles upon which TPM is founded: 

∙ Minor defects must be eliminated from all equipment 
∙ Correct planned maintenance can prevent nearly all unexpected machine  failures  
∙ The use of cross functional teams will resolve problems far more effectively than  a single
department approach  
∙ Continuous improvement is by continuously learning and changing  ∙ Machines with
preventive maintenance programs produce far more products  (on time and to cost) than
machines that "just break down"  
∙ Machines with planned maintenance programs enable key resources to be freed  up to
concentrate on the continuous improvement activities 
The eight pillars are: autonomous maintenance; focused improvement (kaizen);  planned
maintenance; quality management; early equipment management; training  and education; safety,
health and environment; and TPM in administration. 

Overall Equipment Effectiveness 

Overall Equipment Effectiveness (OEE)is a measure that indicates the overall health, or 
effectiveness, of a process or machine. It is based on availability, performance and  output quality,
and the resulting OEE score is expressed as a percentage. 

How does it relate to Total Productive Maintenance? 

OEE is intended to underpin TPM initiatives by accurately tracking progress towards  achieving
“perfect production” – no defects, optimum operation, no stop time. It  represents the main KPI
(key performance indicator) of a TPM program.
What are the scores and what do they mean? 
OEE calculations are performed using data from the Six Big Losses of machines and  processes, as
outlined below. They show the percentage of planned production time that  really is productive.
OEE scores aim to measure availability, performance and quality. 

OOE = availability × performance × quality 

Method and Implementation Approach 

TPM is focused primarily on keeping machinery functioning optimally and minimizing  equipment
breakdowns and associated waste by making equipment more efficient,  conducting preventative,
corrective, and autonomous maintenance, mistake-proofing  equipment, and effectively managing
safety and environmental issues. TPM seeks to  eliminate five major losses that can result from
faulty equipment or operation. 

Six major losses that can result from poor maintenance, faulty equipment or inefficient 
operation 

Type of Loss Costs to Organization

Unexpected breakdown Results in equipment downtime for repairs. Costs can include
losses downtime (and lost production opportunity or yields), labor and
spare parts.

Set-up and adjustment Results in lost production opportunity (yields) that occurs during
losses product changeovers, shift change or other changes in operating
conditions.

Stoppage losses Results in frequent production downtime from zero to 10 minutes

in length and that are difficult to record manually. Asa result, these
losses are usually hidden from efficiency reports and are built into
machine capabilities but can cause substantial equipment
downtime and lost production opportunity.

Speed losses Results in productivity losses when equipment must be slowed

down to prevent quality defects or minor stoppages. In most cases,
this loss is not recorded because the equipment continues to
operate.

Quality defect losses Results in off-spec production and defects due to equipment
malfunction or poor performance, leading to output which must be
reworked or scrapped as waste.

Equipment and capital Results in wear and tear on equipment that reduces its durability
investment losses and productive life span, leading to more frequent capital
investment in replacement equipment.

The Six Big Losses don’t just encompass machine breakdowns, they also incorporate the  quality
of the product produced and the efficiency of operation. As we have seen, OEE  can be calculated
from this data and so an overall picture of the efficiency of each  machine can be gained. That
allows improvement activity to be focused where it is  needed most.
∙ Equipment Failure and Unplanned Stops (Availability Loss) 
Significant periods of time during which equipment scheduled to be operating  is not
running. Causes include breakdown, tool failure, and unplanned  maintenance. 
∙ Setup and Adjustments (Availability Loss) 
Significant periods of time during which equipment that should be operating is  not
running. Causes include warm-up time, tooling adjustments, changeovers,  lack of
resources (e.g. operators, raw materials). Planned maintenance also falls  into this
category. 
∙ Idling and Minor or Slow Stoppages (Performance Loss) 
Equipment stops for a short period of time (typically a few minutes) and the  issue is
resolved by the operator. Causes include material jams, misfeeds,  incorrect settings,
blocked sensors. 
∙ Reduced Speed and Slow Running (Performance Loss) 
Equipment is running at lower than its ideal speed. Causes include incorrect  settings,
alignment issues, inexperienced operator, and poor lubrication. ∙ Quality and Production
Defects (Quality Loss) 
 Defective parts are produced during stable running of machines. Causes include  incorrect
settings, operator error. 
∙ Reduced Yield (Quality Loss) 
Defective parts are produced from machine start-up to steady running (e.g.  during the
warm-up phase). Causes include the need for the machine to  complete a warm-up cycle,
incorrect settings, and poor changeover practice. 

Six Sigma  
Six Sigma seeks to improve the quality of process outputs by identifying and removing   the
defects (errors) and minimizing variability in manufacturing and business  processes.  

It uses a set of quality management methods, including statistical methods, and creates  a special
infrastructure of people within the organization ("Champions", "Black Belts",  "Green Belts",
"Yellow Belts",…) who are experts in the methods. Each Six Sigma project  carried out within an
organization follows a defined sequence of steps and has  quantified value targets, for example:
reduce process cycle time, reduce pollution,  reduce costs, increase customer satisfaction, and
increase profits.  

Six Sigma is a set of strategies, techniques, and tools for process improvement. Six Sigma  is a
management philosophy developed by Motorola in 1981 that emphasizes setting  extremely high
objectives, collecting data, and analyzing results to a fine degree as a way  to reduce defects in
products and services. The Greek letter sigma is sometimes used  to denote variation from a
standard. The philosophy behind Six Sigma is that if you  measure how many defects are in a
process, you can figure out how to systematically  eliminate them and get as close to perfection as
possible.  

Methods 
Six Sigma projects follow two project methodologies inspired by Deming's Plan-Do Check-Act
Cycle. These methodologies, composed of five phases each, bear the  acronyms DMAIC and
DMADV.
DMAIC is used for projects aimed at improving an existing business process.  DMADV is
used for projects aimed at creating new product or process designs.  

DMAIC  
The Six Sigma process is called Sigma DMAIC, which stands for "define, measure,  analyze,
improve, control." This set of steps scrutinizes existing processes that are  known to fall short of
Six Sigma requirements.  

DMAIC is a tool for improving an existing process. The steps can be summarized as: ∙ Define: State
the problem, specify the customer set, identify the goals, and  outline the target process.  
∙ Measure: Decide what parameters need to be quantified, work out the best way  to measure
them, collect the necessary data, and carry out the measurements by  experiment.  
∙ Analyze: Identify gaps between actual and goal performance, determine causes  of those gaps,
determine how process inputs affect outputs, and rank  improvement opportunities.  
∙ Improve: Devise potential solutions, identify solutions that are easiest to  implement, test
hypothetical solutions, and implement actual improvements.  ∙ Control: Generate a detailed
solution monitoring plan, observe implemented  improvements for success, update plan
records on a regular basis, and maintain  a workable employee training routine.  
 DMADV  
DMADV is a process defined by Motorola as part of their Six Sigma management  philosophy.
DMADV is applied to new processes to make sure that they achieve Six  Sigma quality. Six Sigma
sets extremely ambitious goals to minimize the occurrence of  flaws in products and services.  

Those steps can be summarized as follows.  

∙ Define: State the problem, specify the customer set, identify the goals, and  outline the target
process.  
∙ Measure: Decide what parameters need to be quantified, work out the best way  to measure
them, collect the necessary data, and carry out the measurements by  experiment.  
∙ Analyze: Identify performance goals and determine how process inputs are  likely to affect
process outputs. 
∙ Design: Work out details, optimize the methods, run simulations if necessary,  and plan for
design verification.  
∙ Verify: Check the design to be sure it was set up according to plan, conduct trials  of the
processes to make sure that they work, and begin production or sales.  

Six Sigma key roles for implementation  

Six Sigma identifies several key roles for its successful implementation.  ∙ Executive Leadership
includes the CEO and other members of top  management. They are responsible for setting up a
vision for Six Sigma  implementation. They also empower the other role holders with the
freedom  and resources to explore new ideas for breakthrough improvements. 
 Master Black Belts, identified by champions, act as in-house coaches on Six  Sigma. They devote
100% of their time to Six Sigma. They assist champions and  guide Black Belts and Green Belts.
Apart from statistical tasks, they spend their  time on ensuring consistent application of Six Sigma
across various functions  and departments.  
∙ Black Belts operate under Master Black Belts to apply Six Sigma methodology  to specific projects.
They devote 100% of their valued time to Six Sigma. They  primarily focus on Six Sigma project
execution and special leadership with  special tasks, whereas Champions and Master Black Belts
focus on identifying  projects/functions for Six Sigma.  
∙ Green Belts are the employees who take up Six Sigma implementation along  with their other job
responsibilities, operating under the guidance of Black  Belts.  
∙ Yellow Belts, for employees that have basic training in Six Sigma tools and  generally participate
in projects and "White belts" for those locally trained in  the concepts but do not participate in the
project team. "Orange belts" are also  mentioned to be used for special cases. 

Notes: 
∙ Six Sigma is a quality-control process that businesses used to eliminate defects  and improve
processes. 
∙ The model was developed by a scientist who worked at Motorola in the 1980s. ∙ Companies often
choose to use the Six Sigma model to boost their profits. ∙ Originally developed as a management
method to work faster with fewer  
mistakes, it is now an industry standard with certifications offered to  practitioners. 
∙ Lean Six Sigma is a team-focused managerial approach that seeks to improve  performance by
eliminating waste and defects while boosting the  standardization of work. 
∙ Champions take responsibility for Six Sigma implementation across the  organization in an
integrated manner. The Executive Leadership draws them  from upper management. Champions
also act as mentors to Black Belts.  
5S" was invented in Japan, and stands for five (5) Japanese words that start with  the letter 'S':  
1. Seiri – Sort  
2. Seiton - Set (in place)  
3. Seiso - Shine  
4. Seiketsu - Standardize  
5. Shitsuke – Sustain

The 5S Process, or simply "5S", is a structured program to systematically achieve total 

organization, cleanliness, and standardization in the workplace. A well-organized  workplace
results in a safer, more efficient, and more productive operation. It boosts  the morale of the
workers, promoting a sense of pride in their work and ownership of  their responsibilities. 
Seiri 
The first step of the "5S" process, seiri, refers to the act of throwing away all unwanted, 
unnecessary, and unrelated materials in the workplace. Even the number of necessary  items in
the workplace must be kept to its absolute minimum. Because of seiri,  simplification of tasks,
effective use of space, and careful purchase of items follow.  

Seiton 
Seiton, or orderliness, is all about efficiency. This step consists of putting everything in  an
assigned place so that it can be accessed or retrieved quickly, as well as returned in  that same
place quickly. The correct place, position, or holder for every tool, item, or  material must be
chosen carefully in relation to how the work will be performed and  who will use them. Every
single item must be allocated its own place for safekeeping,  and each location must be labeled for
easy identification of what it's for.  

Seiso 
Seiso, the third step in "5S", says that 'everyone is a janitor.' Seiso consists of cleaning  up the
workplace and giving it a 'shine'. Cleaning must be done by everyone in the  organization, from
operators to managers. No area should be left uncleaned. Everyone  should see the 'workplace'
through the eyes of a visitor - always thinking if it is clean  enough to make a good impression.  

Seiketsu 
The fourth step of "5S", or seiketsu, more or less translates to 'standardized cleanup'. It  consists
of defining the standards by which personnel must measure and maintain  'cleanliness'.
Personnel must therefore practice 'seiketsu' starting with their personal tidiness. Visual
management is an important ingredient of seiketsu. Personnel are trained to detect abnormalities
using their five senses and to correct such abnormalities  immediately.  

Shitsuke 
The last step of "5S", Shitsuke, means 'Discipline.' It denotes commitment to maintain  orderliness
and to practice the first 4 S as a way of life. The emphasis of shitsuke is   elimination of bad habits
and constant practice of good ones. Once true shitsuke is  achieved, personnel voluntarily observe
cleanliness and orderliness at all times,  without having to be reminded by management.