Total Quality

Management

DO IT RIGHT
THE FIRST
TIME ALL THE
TIME

 Competition is getting harder and becoming

global. Companies now have to be more
responsive, offer a better product and keep
improving. Total quality management (TQM)
increases customer satisfaction by boosting
quality. It does this by motivating the
workforce and improving the way the company
operates. In an increasingly competitive
market, firms with a continuous improvement
culture and external focus are more likely to
survive and prosper. TQM is considered an
important catalyst in this context.

 TQM is an approach to improving the

effectiveness and flexibilities of
business as a whole. It is essentially a
way of organizing and involving the
whole organization, every department,
every activity and every single person
at every level. TQM ensures that the
management adopts a strategic
overview of the quality and focuses on
prevention rather than inspection.

What is TQM
Total = everyone is involved in
Quality = continuously improving service to
customer
Management = with data and profound
knowledge
Total quality management (TQM)
An integrated effort designed to improve quality
performance at every level of the organization.

Total Quality Management

Total Quality Management (TQ, QM or TQM) and Six Sigma (6)
are sweeping culture change efforts to position a company for
greater customer satisfaction, profitability and competitiveness.
TQ may be defined as managing the entire organization so that it
excels on all dimensions of products and services that are
important to the customer.
We often think of features when we think of the quality of a
product or service; TQ is about conformance quality, not
features.

Total Quality Is
Meeting Our Customers Requirements
Doing Things Right the First Time;
Freedom from Failure (Defects)
Consistency (Reduction in Variation)
Continuous Improvement
Quality in Everything We Do

A Quality Management System

Is
A belief in the employees ability to solve
problems
A belief that people doing the work are best
able to improve it
A belief that everyone is responsible for quality

Elements for Success

Management Support
Mission Statement
Proper Planning
Customer and Bottom Line Focus
Measurement
Empowerment
Teamwork/Effective Meetings
Continuous Process Improvement
Dedicated Resources

The Continuous Improvement Process

Empowerment/
Shared Leadership
Customer
Satisfaction
Business
Results

Team
Management

Process
Improvement/
Problem
Solving

Measurement

Measurement

Measurement

...
Measurement

Modern History of Quality

Management
Frederick W. Taylor wrote Principles of Scientific Management in 1911.
Walter A. Shewhart used statistics in quality control and inspection,
and showed that productivity improves when variation is reduced
(1924); wrote Economic Control of Manufactured Product in 1931.
W. Edwards Deming and Joseph M. Juran, students of Shewhart, went
to Japan in 1950; began transformation from shoddy to world
class goods.
In 1960, Dr. K. Ishikawa formalized quality circles - the use of small
groups to eliminate variation and improve processes.
In the late 70s and early 80s:
Deming returned from Japan to write Out of the Crisis,
and began his famous 4-day seminars in the United States
Phil Crosby wrote Quality is Free
NBC ran If Japan can do it, why cant we?
Motorola began 6 Sigma

History of Quality Management

Demings 14 Points
1. Create constancy of purpose for improvement
2. Adopt a new philosophy
3. Cease dependence on mass inspection
4. Do not award business on price alone
5. Work continually on the system of production and service
6. Institute modern methods of training
7. Institute modern methods of supervision of workers
8. Drive out fear
9. Break down barriers between departments
10. Eliminate slogans, exhortations, and targets for the work force
11. Eliminate numerical quotas
12. Remove barriers preventing pride of workmanship
13. Institute a vigorous program of education and retraining
14. Take action to accomplish the transformation

History of Quality Management

Demings Concept of Profound Knowledge
Understanding (and appreciation) of Systems
- optimizing sub-systems sub-optimizes the total system
- the majority of defects come from systems, the responsibility of
management (e.g., machines not in good order, defective material, etc.
Knowledge of Statistics (variation, capability, uncertainty in data, etc.)
- to identify where problems are, and point managers and workers
toward solutions
Knowledge of Psychology (Motivation)
- people are afraid of failing and not being recognized,
so they fear how data will be used against them
Theory of Knowledge
- understanding that management in any form is a prediction, and is
based on assumptions

History of Total Quality

According to Dr. Joseph M. Juran (1991):
On the assembly line at the Ford Motor Company in 1923,
most of the workers producing Model Ts were immigrants
and could not speak English. Many were also illiterate.
Workers learned their trade by modeling the actions of other
workers. They were unable to plan, problem-solve, and make
decisions. As a result, the Taylor scientific school of
management flourished, and MBAs and industrial engineers
were invented to do this work. Today, however, the workforce
is educated. Workers know what is needed to improve their
jobs, and companies that do not tap into this significant source
of knowledge will truly be at a competitive disadvantage.

History of Total Quality

According to Phil Crosby, Quality is . . .
An attitude:
- Zero Defects
- Continuous Improvement
A measurement:
- Price of Conformance, plus
- Price of Nonconformance (defects)

TQ: Transforming an
Organization
From

To

Motivation through fear and loyalty

Motivation through shared vision

Attitude: Its their problem

Ownership of every problem

affecting the customer

Attitude: the way weve always done

it

Continuous improvement

Decisions based on assumptions/

judgment calls

Decisions based on data and facts

Everything begins and ends with

management

Everything begins and ends with

customers

Crisis management and recovery

Doing it right the first time

Choosing participative OR scientific

management

Choosing scientific AND

participative management

What is Six Sigma?

A goal of near perfection in meeting customer requirements
A sweeping culture change effort to position a company for
greater customer satisfaction, profitability and
competitiveness
A comprehensive and flexible system for achieving,
sustaining and maximizing business success; uniquely driven
by close understanding of customer needs, disciplined use of
facts, data, and statistical analysis, and diligent attention to
managing, improving and reinventing business processes
(Source:The Six Sigma Way by Pande, Neuman and Cavanagh)

Is 99% Quality Good Enough?

22,000 checks will be deducted from the wrong
bank accounts in the next 60 minutes.
20,000 incorrect drug prescriptions will be written
in the next 12 months.
12 babies will be given to the wrong parents each
day.

Six Sigma Quality

Six Sigma quality is 3.4
defects per million opportunities!

The objective of

(Number of Standard Deviations)

3 Sigma

4 Sigma

5 Sigma

6 Sigma

0.0

2700

63

0.57

0.002

0.5

6440

236

3.4

0.019

1.0

22832

1350

32

0.019

1.5

66803

6200

233

3.4

2.0

158,700

22800

1300

32

Defects Per Million Opportunities (DPMO)

But is Six Sigma Realistic?

100K

10K

IRS Tax Advice (phone-in)

(66810 ppm)

Average
Company

1K

Restaurant Bills
Doctor Prescription Writing
Payroll Processing
Order Write-up
Journal Vouchers
Wire Transfers

Air Line Baggage Handling

Purchased Material
Lot Reject Rate

100

(233 ppm)

10

Best in Class

Domestic Airline
Flight Fatality Rate
(3.4 ppm)

SIGMA

(0.43 ppm)
7

Six Sigma Improvement Methods

DMAIC vs. DMADV
Define
Measure
Analyze
Continuous Improvement

Reengineering

Improve

Design

Control

Validate

Six Sigma DMAIC Process

Control
Improve
Define
Analyze
Measure

Define: Define who your

customers are, and what
their requirements are for
your products and
services Their
expectations. Define
your team goals, project
boundaries, what you will
focus on and what you
wont. Define the process
you are striving to
improve by mapping the
process.

Six Sigma DMAIC Process

Control
Improve
Define
Analyze
Measure

Measure: Eliminate
guesswork and
assumptions about what
customers need and expect
and how well processes are
working. Collect data from
many sources to determine
speed in responding to
customer requests, defect
types and how frequently
they occur, client feedback
on how processes fit their
needs, how clients rate us
over time, etc. The data
collection may suggest

Six Sigma DMAIC Process

Control
Improve
Define
Analyze
Measure

Analyze: Grounded in the

context of the customer
and competitive
environment, analyze is
used to organize data and
look for process problems
and opportunities. This
step helps to identify gaps
between current and goal
performance, prioritize
opportunities to improve,
identify sources of variation
and root causes of
problems in the process.

Six Sigma DMAIC Process

Control
Improve
Define
Analyze
Measure

Improve: Generate both

obvious and creative
solutions to fix and
prevent problems.
Finding creative solutions
by correcting root causes
requires innovation,
technology and discipline.

Six Sigma DMAIC Process

Control
Improve
Define
Analyze
Measure

Control: Insure that the

process improvements,
once implemented, will
hold the gains rather
than revert to the same
problems again. Various
control tools such as
statistical process control
can be used. Other tools
such as procedure
documentation helps
institutionalize the
improvement.

Six Sigma DMADV Process

Validate
Design
Define
Analyze
Measure

Design: Develop
detailed design for
new process.
Determine and
evaluate enabling
elements. Create
control and testing
plan for new design.
Use tools such as
simulation,
benchmarking, DOE,
Quality Function
Deployment (QFD),
FMECA analysis, and

Six Sigma DMADV Process

Validate
Design
Define
Analyze
Measure

Validate: Test detailed

design with a pilot
implementation. If
successful, develop
and execute a fullscale implementation.
Tools in this step
include: planning
tools, flowcharts/other
process management
techniques, and work
documentation.