Unit -5

Total Quality Management

Logesh
School of Management
TQM is the art of managing the whole to achieve excellence.
excellence

• Definitions:
• Focussing on customers
satisfaction.
• Provides best quality product at
lowest possible price
• Prevention of defects, target is
zero defects

• Why is a GOLDEN word?

• It is do an Improvements in
quality, productivity,
competitiveness and financial
return…. HOW?
 PRINCIPLES
• Principles (by focusing on the follows):
• Management Commitment
• Employee Empowerment
• Decision Making Based on Facts
• Continuous Improvement
• Customer Focus
All are surrounded by: (Ethics, Integrity, Trust,
Training, Teamwork, Leadership,
Communication and Recognition).

Total  Quality involves everyone and all

activities.
Quality  Conformance to Requirements.
Management  Quality can and must be
managed.
 CUSTOMER SATISFACTION

• Customer satisfaction is defined

as "the number of customers, or
percentage of total customers,
whose reported experience with
a firm, its products, or its
services (ratings) exceeds
specified satisfaction goals
 GOALS OF CUSTOMER
FOCUS
Creating Building
Better Offering deeper
Products or compelling customer
Services customer relationships
experience
 Business performance factors
contribution to shareholder value
90% 86% 83%
75%
71%
80%
62%
70%
60%
50% 47%
40%
30%
20%
10%
0%
Product/Service Customer Sat. Operating Financial Innovation Employee
Quality & Loyalty Efficiency Results Satisfaction
WHY CUSTOMER SAT. IS
IMPORTANT?
DIFFERENT FORMS OF MEASUREMENT
Online
Annual Questionnaires Feedback
Customer Forms
Satisfaction
Surveys
Online
Polls
Customer
Service
CRM Feedback
Other
Software Surveys
(Benchmarking,
Employee, Org
Focus Groups Alignment) Phone or
(Formal/ Fax
informal) Surveys
CUSTOMER PERCEPTION
 CUSTOMER PERCEPTION:

Product quality remained the most important

factor, but service ranked above price in
importance
`Acc. To American Society for Quality
(ASQ) survey on end user perceptions of
important factors that influenced
purchases showed the following ranking
• Performance (availability , reliability ,
Maintainability )
• Features (Time oriented , Contractual , ethical
and technological )
• Service (providing excellent customer service
is different from and more difficult to achieve
than excellent product quality)
• Warranty (encourage the customer buy a service
by reducing the risk of the purchase decision, & it
generates more sales for the existing customer by
enhancing loyalty)
• Price (Customers constantly evaluating one’s org
pdt and service against those of its competitors to
determine who provides the greatest value.
• Reputation (The total customer satisfaction is based
on entire experience with the org , not just the
product )
CUSTOMER COMPLAINTS
 COMPLAINTS
• Investigate customers experience in both positive and
negative , and then acting on it promptly
• Empowering the front line personnel
• Understand complaints
• Eliminate the root cause “ more inspection “ is not corrective
action Senior mgr shld contact the customer to resolve the
concern
• Establish customer satisfaction measurers
• Provide Investigations & provide solutions to all the orgs
• Provide monthly complaint report to quality council for their
evaluation
• Identify the customer expectations
SERVICE QUALITY
 SERVICE QUALITY
• Customer service is the set of activities an
organization uses to win and retain customers’
satisfaction.
• It can be provided before, during, or after the
sale of the product or exist on its own.

Elements of customer service are:

• Organization
1. Identify each market segment.
2. Write down the requirements.
3. Communicate the requirement.
4. Organize processes
 CUSTOMER CARE

1. Meet the customer’s expectations.

2. Get the customer’s point of view.
3. Deliver what is promised.
4. Make the customer feel valued.
5. Respond to all complaints.
6. Over-respond to the customer.
7. Provide a clean and comfortable
customer reception area
 COMMUNICATION

1. Optimize the trade-off between

time and personal attention.
2. Minimize the number of
contact points.
3. Provide pleasant,
knowledgeable, and enthusiastic
employees.
4. Write documents in customer-
friendly language.
 FRONT-LINE PEOPLE
1. Hire people who like people.
2. Challenge them to develop
better methods.
3. Give them the authority to
solve problems.
4. Serve them as internal
customers.
5. Be sure they are adequately
trained.
6. Recognize and reward
performance.
 LEADERSHIP

1. Lead by example.
2. Listen to the front-line people.
3. Strive for continuous process
improvement
CUSTOMER RETENTION
 CUSTOMER RETENTION

Is the connection between the customer

satisfaction and the bottom line
• Is more powerful and effective than
customer satisfaction
• It creates the customer loyalty , which
improves the bottom line
• Customer retention moves the customer
satisfaction to the next level by
determining what is truly important to
the customers.
 Employee Involvement
• One approach to
improving quality and
productivity
• Is not a replacement for
management nor is it the
final word in quality
improvement
• For better meet the orgs
goals for quality and
productivity at all levels
of an org.
MOTIVATION
EMPOWERMENT
• Empowerment is an environment is to invest people with
authority

Definition :

“Management practice of sharing information, rewards,

and power with employees so that they can take initiative
and make decisions to solve problems and improve service
and performance. It is based concept of giving employees
the skills, resources, authority, opportunity, motivation, as
well holding them responsible and accountable for
outcomes of their actions.”
In order to create Empowerment environment ,
3 conditions are necessary:

• Every one must understand the need for

change
• The system needs to change to the new
paradigm
• Org must enable its employees
TEAM
 A team defined as a group of people working together
to achieve common objective or goals

Types of teams : Characteristics of

• Process improvement successful team
team • Mission
• Cross –functional team • Empowerment
• Natural work teams • Involvement
• Self directed / self • Willingness to take risk
managed teams • Unity
• Change
 RECOGNITION AND
REWARD
• Recognition is a form of • Reward is something
employee motivation in tangible such as tickets ,
which the org publicly dinner for two or cash
acknowledges the award to promote the
positive contributions desirable behavior
an individual or team
has made the success of
org
 PERFORMANCE APPRAISAL
• Is to let the employees know
how they are doing , and to
provide a basis for
promotions ,salary
increases, counseling and
other purpose related to an
employee's future.
• May be for the team or
individuals
 BENEFITS OF EMPLOYEE
INVOLVEMENT
• Make better decisions using their expert
knowledge of the process
• Better able to spot and pinpoint areas for
improvement
• Able to take immediate corrective action
• Increases morale by creating a feeling of
belonging to the org
• Able to accept the change bcos they ctrl the
work environment
 CONTINUOUS PROCESS
IMPROVEMENT
• Reduces resources
• Reduces errors
• Meet or exceed
expectations of down
stream customers
• Make the process safer
 JURAN TRILOGY
Juran developed the quality trilogy – quality planning, quality control and
quality improvement Key Contributions.

JURAN’S QUALITY PLANNING:

• Identifying who are the customers

• Determine the customer’s need
• Translate the needs into our language
• Develop a product to meet those needs
• Optimize a product so as to meet our needs as well as the customers
• Develop the process which is able to produce the product
• Optimize the process
• Prove the process can make the product under operating the conditions
• Dr. Juran has been called the "father" of quality.

• Quality planning
– Establish quality goals
– Identify the customer needs
– Translate the needs into wants
– Develop a product for needs

• Quality control
– Improve the process can produce under operating conditions
– Transfer process to operation

• Quality Improvement
– Seeks to optimize the process
JURAN TRILOGY
 PDSA Cycle
• First Plan carefully what • Then modified by
is to be done Deming
• Next carry out the plan
(do it)
• Third did the plan work
as results different
• Finally act on results by
identifying what worked
as planned and what
didn’t
METHODOLOGY OF KAIZEN
• Finding out the pain areas
• Analyses the pain
• Large scale preplanning and
extensive project scheduling are
replaced by smaller experiments

• 3M’S- Mura, Muri & Muda

• 5M’s Checklist- Man, Machine,
Material,
Method, Measurements.
 KEY ELEMENTS OF KAIZEN

• Team work
• Personal discipline
• Improved morale
• Quality circles
• Suggestions for improvement
Toyota is one of the leaders in implementing Kaizen
• KAIZEN means continuous improvement.
• Kaizen is a Japanese word for the philosophy
that defines mgt’s role in continuously
encouraging and implementing small
improvements involving every one
• It focus on simplification by breaking down
complex processes into their sub-processes
and then improving them
 5’s

• Seiko = Proper arrangement

• Seiton = orderliness
• Seiketso = Personal Cleanliness
• Seiso = Clean up
• Shitsuke = Discipline
SUPPLIER & PARTNERING
 Partnering
• Partnering is a long term commitment between
two or more org’s for the purpose of achieving
specific business goals and objectives by
maximizing the effectiveness of each
participant’s resources.
• Three key elements:
– Long term commitment
– Trust
– Shared vision
 Sourcing
• Sole: A sole source of supply implies that the
org is forced to use only one supplier
• Multiple : Is the use of two or more suppliers
from an item
• Single : Is a planned decision by the org to
select one supplier for an item when several
sources are available
 Supplier selection
1.How critical is the item to the design of the
product or service?
2. Does the org have the technical knowledge to
produce the items internally? If not, shld that
knowledge be developed?
3.Are there suppliers who specialize in
producing the item ?If not , is the org willing
to develop such a specialized supplier?
 Supplier Rating

• An internal Structure to implement and sustain

the rating program
• A regular and formal review process
• A standard measurement system for all the
suppliers
RELATIONSHIP DEVELOPMENT
 Relational Development

• Inspection
• Training
• Team Approach
• Recognition
PERFORMANCE MEASURE
 Performance Measurers

• Establish baseline measures and reveal trend

• Determine which processes need to be improved
• Indicate process gains and losses
• Compare goals with actual performance
• Provide information for individual and team
evaluation
• Provide information to make informed decision
• Determine the overall performance of the org
 Strategy of performance measure

• Quality
• Cost
• Flexibility
• Reliability
• Innovation
 Performance measure presentation

Six basic techniques for presenting performance

measurers are :
• Time series graph
• Control chart
• Capability Index
• Taguchi’s loss function
• Performance measurers
• Malcolm Baldrige National Quality Award