Research paper on Total Quality Management (TQM)

Executive Summary During the recent years the world of business has changed vastly. We the people of different walks of life cannot be able to imagine that what is going to be the future picture if this change continues rapidly like this speed. Today there are very much competition in-between them and for that reason each and every business organization are trying to offer competitively better facilities for their customers better than the competitors. We have learn much about the Introduction to Cost and anagerial !ccounting. "ut don#t know how they are applied in the real lives. To find this out i.e. how they are applied in the real lives we were given this pro$ect. We tried our best to fetch all the possible information and include them in a relevant manner. Chapter 01 Intro uction 01!01 Intro uction anagement systems are usually implemented in response to current conditions. %uch systems and the terms to describe them change with time and use in new conte&ts. uch of the current management literature' in education and other industries' focuses on systems that can be described under the umbrella term' Total (uality anagement' or T( . T( contains a mi& of original ideas and those with historical antecedents. The following is a brief overview of T( and how it is being applied in community colleges. T( is a management system- a philosophy' set of tools' and organizational models. It is known by names other than Total (uality anagement' including) the Deming anagement ethod* in the +nited %tates Total (uality Improvement and Total (uality Commitment* in ,apan- Total (uality Control' Company- Wide (uality Control' and kaizen' which in ,apanese means gradual' unending improvement' doing little things better' setting and achieving ever higher standards. The components of T( are a blend of ideas developed by three ma$or theorists. W. -dwards Deming applied statistical thinking to the control of variation of work processes. .e is best known for his fourteen points. ,. . ,uran added insight into managing for /uality and describing the /uality trilogy) /uality planning' /uality control' and /uality improvement. 0hilip ". Crosby developed ways to motivate and organize for /uality. .is less technical approach is based on the ideas of 1zero defects2 and 1conformance to re/uirements2. ost /uality improvement programs follow the ideas of one or more of these theorists! 01!0" #istorical Revie$

The history of /uality control is undoubtedly as old as industry itself. During the iddle !ges' /uality was to a large e&tent controlled by the long periods of training re/uired by the guilds. This training instilled pride in workers for /uality of a product. The concept of specialization of labor was introduced during the Industrial 3evolution. !s a result' a worker no longer made the entire product' only a portion. This change brought about a decline in workmanship. "ecause most products manufactured during that early period were not complicated' /uality was not greatly affected. In fact' because productivity improved there was a decrease in cost' which resulted in lower customer e&pectations. !s products became more complicated and $obs more specialized' it became necessary to inspect products after manufacture. In 4567' W. !. %hewhart of "ell Telephone 8aboratories developed a statistical chart for the control of product variables. This chart is considered to be the beginning of statistical /uality control. In 459:' W. -dwards Deming' who learned statistical /uality control from %hewhart' gave a series of lectures on statistical methods to ,apanese engineers and on /uality responsibility to the C-;s of the largest organizations in ,apan. ,oseph . ,uran made his first trip to ,apan in 4597 and further emphasized management#s responsibility to achieve /uality. +sing these concepts the ,apanese set the /uality standards for the rest of the world to follow. In 45<:' the first /uality control circles were formed for the purpose of /uality improvement. %imple statistical techni/ues were learned and applied by ,apanese workers. -mphasis on /uality continued in the auto industry in the 455:s when the %aturn automobile ranked first in customer satisfaction =455<>. In addition' I%; 5::: became the worldwide model for a /uality management system. I%; 47::: was approved as the worldwide model for environmental management systems. Chapter 0" Total Quality Management 0"!01 Total Quality Management (TQM) e%ine Total (uality anagement =T( > is an enhancement to the traditional way of doing business. It is a proven techni/ue to guarantee survival in world-class competition. ;nly by changing the actions of management will the culture and actions of an entire organization be transformed. T( is for the most part common sense. !nalyzing the three words' we have Total ade up of the whole

Quality-

Degree of e&cellence a product or service provides.

Management- !ct' art' or manner of handling' controlling' directing' etc Therefore' T( is the art of managing the whole to achieve e&cellence. The ?olden 3ule is a simple but effective way to e&plain it) Do unto others as you would have them do unto you. T( is defined as both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization. It is the application of /uantitative methods and human resources to improve all the processes within an organization and e&ceed customer needs now and in the future. T( integrates fundamental management techni/ues' e&isting improvement efforts' and technical tools under a disciplined approach. 0"!0" TQM& 'asic Concepts While there are significant differences among the theorists and their approaches to implementation' they share basic concepts that are the foundation of T( . 0"!0"!01 Continuous Improvement of Quality. @undamental to all T( systems is improving the /uality of the products and services provided by an organization. %uch /uality improvement results in greater productivity and enhances the ability of an organization to remain vital' employ people' and serve customers. ! focus on continuous /uality improvement helps an organization do things right. 0"!0"!0" Central Focus on the Customer. !lso central to all T( is a focus on the customer' the internal and e&ternal recipients of an organization#s products. Their needs and desires define /uality for the producer whose $ob it is to meet or e&ceed the customer#s needs and e&pectations. ! focus on customers helps an organization to do the right things. 0"!0"!0( Systematic Improvement of Operations. !ll work occurs in processes that begin and end somewhere. These work processes account for A:- A9 percent of the /uality of work and productivity of employees. anagement is responsible for systems within an organization* therefore' managers' not employees' must shoulder blame when something goes wrong with the system. T( calls for studying work processes /uantitatively' using individuals or teams' to find places that breakdowns or unnecessary comple&ities occur in processes' and then to identify solutions that prevent them in the future. %tudy of work processes helps to reduce costs while ensuring that /uality is built into a service or product since /uality cannot be inspected into it at the end of the processes. 0"!0"!0) Open Work Environments. Continuous /uality improvement re/uires an atmosphere for innovation where suggestions for improvement are solicited and respected

and where supervisors and managers are open to disagreement' conflict' and challenge. !ctivities for the improvement of work processes' especially when teams are involved' help to break down barriers that occur between departments or between supervisors and those supervised. 0"!0"!0* Long- erm hinking. T( is also characterized by long- term thinking which helps mold the future by understanding the conse/uences of current actions. %uch thinking re/uires decision making that is based on data' both hard and soft' and related to real problems' not symptoms. It re/uires time. It shies away from /uick fi&es arrived at by discussion and intuition. 8ong- term thinking works best in organizations where managers plan to stay' and thus have a stake in the conse/uences of their decisions. 0"!0"!0+ !evelopment of "uman #esources. ;rganizations that follow T( principles are organized to help people do their $obs* they are seriously committed to employee learning and development. %uch development begins with a thorough orientation to the organization' including its mission' values' and information about where the $ob fits into the organization. It involves educating people to perform to the /uality standards of a specific $ob before re/uiring them to work independently. T( e&pects managers to respect the ability of well trained employees to know the work they do better than anyone' and therefore' to be the best at improving it. .uman resource development includes providing the training to learn the communication' /uantitative' and team- participation skills re/uired in an open' /uality improvement work environment. Development programs provide e&tensive education to help individuals keep up- to- date on their $obs and to prepare themselves for new responsibilities. 0"!0"!0, $anagement #esponsi%ility for Q$ Lea&ership. anagers need to lead the transformation of the organization to the new culture of continuous /uality improvement. They must accept personal responsibility for continuous /uality improvement and be dedicated to empowering others in the organization to accept personal responsibility for it' too. This approach taps the collective genius of the organization to identify and solve problems. The leader#s focus is on policy' structure' and systems to sustain continuous /uality improvement. Within this conte&t' /uality is the first among e/uals of the organization#s functions. (uality is at the top of the agenda for every meeting' every communication. The leader#s goal is to help people' things' and machines do a better $ob* the leader#s role is that of facilitator' catalyst' and coach. !s previously stated' T( re/uires a cultural change. Table I -I compares the previous state with the T( state for typical /uality elements. This change is substantial and will not be accomplished in a short period of time. %mall organizations will be able to make the transformation much faster than large organizations. 0"!0( -e$ an .l Cultures Quality Element Definition 0revious %tate /ro uct0oriente T( Customer-oriented

0riorities Decisions -mphasis -rrors 3esponsibility 0roblem %olving 0rocurement Manager2s Role 0"!0) 3$areness

Secon to service an cost Short0term 1etection .perations Quality control Managers /rice 0lan' assign' control and enforce

@irst among e/uals of service and cost 8ong-term 0revention %ystem -veryone Teams 8ife-cycle costs' partnership Delegate' coach' facilitate and mentor

!n organization will not begin the transformation to T( until it is aware that the /uality of the product or service must be improved. !wareness comes about when an organization loses market share or realizes that /uality and productivity go hand-in-hand. It also occurs if T( is mandated by the customer or if management realizes that T( is a better way to run a business and compete in domestic and world markets. !utomation and other productivity enhancements might not help a corporation if it is unable to market its product or service because the /uality is poor. The ,apanese learned this fact from practical e&perience. 0rior to World War 44' they could sell their products only at ridiculously low prices' and even then it was difficult to secure repeat sales. +ntil recently' corporations have not recognized the importance of /uality. .owever' a new attitude has emerged--/uality first among the e/uals of cost and service. To sum it up' the customer wants value. 0"!0* Implementing Total Quality Management Concepts %ince World War 44' the ,apanese have been very successful using the !merican ideas for total /uality improvement they learned from Deming and ,uran. In the late 45B:s !mericans became interested in the success of ,apanese firms and discovered that their management processes were the cornerstone of that success. %ome !merican companies adopted T( and applied it successfully' notably @ord otor Company' .ewlett 0ackard' Campbell %oup Company' and the 0aul 3evere Insurance Company. ;thers were less successful' largely it seems' because they were unable to accomplish the cultural and organizational changes re/uired to implement T( principles. The T( implementation process begins with senior management and' most important' the C-;#s commitment. The importance of the senior management role cannot be overstated. 8eadership is essential during every phase of the implementation process and particularly at the start. In fact' indifference and lack of involvement by senior management are fre/uently cited as the principal reasons for the failure of /uality improvement efforts. Delegation and rhetoric are insufficient involvement is re/uired.

%enior management needs to be educated in the T( concepts. In addition to formal education' managers should visit successful T( organizations' read selected articles and books' and attend seminars and conferences. The ne&t step is for senior management to develop an implementation plan. Timing of the implementation process can be very important. Is the organization ready to embark on the total /uality $ourneyC There may be some foreseeable problems' such as a reorganization' change in senior management personnel' interpersonal conflicts' a current crisis' or a time consuming activity. These problems may postpone implementation to a more favorable time. The ne&t step is the formation of the /uality council initiation of these duties is a substantial part of the implementation of T; . The development of core values' a vision statement' a mission statement' and a /uality policy statement' with input from all personnel' should be completed first. The active involvement of middle managers and first line supervisors is essential to the success of the T( effort. They are accountable for achieving many of the organization#s performance goals and ob$ectives' and they form enduring links in the communication chain from senior management to the front line workers. Without middle management#s early and active support' the T( effort could fail. %enior management needs to ensure that managers at all levels have an opportunity' as soon as possible' to develop ownership in the T( effort and a chance to ac/uire the insight and skills necessary to become leaders. ;ne way to accomplish this concept is to have a retreat. The retreat will focus on T( training' leadership skills' and active involvement in the development of the organization#s statements. If there is a union' there should be early discussions with the representatives on T( . anagers should involve union leaders by sheling with them implementation plans for T( . !s the /uality effort progresses' managers and union leaders should work together on /uality improvement activities. !t this stage of the implementation process' it is important to communicate T( to the entire organization. Communication is important throughout the implementation stage. Communication is necessary to create T( awareness interest' desire' and action. -veryone needs to be trained in /uality awareness and problem solving. This training is conducted when the employee is placed on a pro$ect team or the work group is ready for the training. Customer' employee' and supplier surveys must be conducted to benchmark the attitudes of these three stakeholders. Information from these surveys provides ideas for /uality improvement pro$ects. The /uality council determines the /uality improvement pro$ects. In addition the council establishes the pro$ect teams and work groups and monitors their progress. The organization has to be patient and not rush the teams for solutions that don#t eliminate the root causes. There is often a tendency to rush the implementation

process. T-C%T!3' a small business' was able to achieve savings of more than DE million the first year of its T( program. ;n the other hand' Farlee' a alcolm "aldrige 0"!0+ .4stacles Implementation of T( is described in the ne&t chapter' on leadership. This section gives information concerning the obstacles associated with implementation. any organizations' especially small ones with a niche' are comfortable with their current state. They are satisfied with the amount of work being performed' the profits realized' and the perception that the customers are satisfied. ;rganizations with this culture will see little need for T( until they begin to lose market share. ;nce an organization embarks on T( ' there will be obstacles to its successful implementation. The first eight most common were determined by 3obert ,. asters after an e&tensive literature search and the last obstacle added by the authors They are given below.

8ack of anagement Commitment Inability to Change ;rganizational Culture improper 0lanning 8ack of Continuous Training and -ducation Incompatible ;rganizational %tructure and Isolated Individuals !nd Departments Ineffective easurement Techni/ues and 8ack ;f !ccess 0aying Inade/uate !ttention To Internal and -&ternal Customers Inade/uate +se of -mpowerment !rid Teamwork @ailure to Continually Improve

0"!0, 'ene%its o% TQM !ccording to a survey of manufacturing firms in ?eorgia' the benefits of T( are improved /uality' employee participation' teamwork' working relationships' customer satisfaction' employee satisfaction' productivity' communication' profitability' and market share. T( is a good investment as shown by a ten-year study by .endricks and %inghai. They showed that there is a strong link between T( and financial performance. The researchers selected a group of <:: publicly traded organizations that had won awards for effectively implementing T( . They then selected a control group similar in size and industry to the award winners. 0erformance of both groups was compared during the five years prior to the award and five years after winning the award. Go difference was shown between the two groups prior to the award. .owever' as shown below the award group far outstripped the control group during the five-year period after the award. Description Control Award

Growth in Operating Income Increase in #ales Increase in Total Assets

43 3$ 3&

!" %! &!

The study also showed that stock price performance for the award winners was 447H while the %I0 was A:H. In addition' the study showed that small organizations out performed larger organizations. 3ecent studies have shown that only about E:H of manufacturing organizations have successfully implemented T( . Chapter 0( Some Relate Topics an Explanations 0(!01 5ea ership There is no universal definition of leadership and indeed many books have been devoted to the tonic of leadership>. In his book 'eadership( ,ames ac?regor "ums describes a leader as one who instills purposes' not one who controls by brute force. ! leader strengthens and inspires the followers to accomplish shared goals. 8eaders shape the organization#s values' promote the organization#s values' protect the organization#s values and e&emplify the organization#s values. +ltimately' "ums says' 18eaders and followers raise one another to higher levels of motivation and morality J leadership becomes moral in that it raises the level of human conduct and ethical aspiration of both the leader and the led' and thus has a transforming effect on both.2K %imilarly' Daimler Chrysler#s C-; "ob -aton defines a leader as 1. . . someone who can take a group of people to a place they don#t think they can go.2 18eadership is we' not me* mission' not my show* vision' not division* and community' not domicile.2 !s the above illustrates' leadership is difficult to define in anything other than lofty words. The alcolm "aldrige Gational (uality !ward has a more grounded definition of leadership in its core values. !s stated in its core values and concepts' visionary leadership is1!n organization#s senior leaders should set directions and create a customer focus' clear and visible values' and high e&pectations. The directions' values' and e&pectations should balance the needs of all your stakeholders. Lour leaders should ensure the creation of strategies' systems' and methods for achieving e&cellence' stimulating innovation' and building knowledge and capabilities. The values and strategies should help guide all activities and decisions of your organization. %enior leaders should inspire and motivate your entire workforce and should encourage all employees to contribute' to develop and learn' to be innovative' and to be creative' %enior leaders should serve as role models through their ethical behavior and their personal involvement in planning' communications' coaching' development of future leaders' review of organizational performance' and employee recognition. !s role

models' they can reinforce values and e&pectations while building leadership' commitment' and initiative throughout your organization.2 8eadership can be difficult to define. .owever' successful /uality leaders tend to have certain characteristics. 0(!01!01 5ea ership Concepts In order to become successful' leadership re/uires an intuitive understanding of human nature the basic needs' wants' and abilities of people. To be effective' a leader under

0eople' parado&ically' need security and independence at the same time. 0eople are sensitive to e&ternal rewards and punishments and yet are also strongly self-motivated. 0eople like to hear a kind word of praise. Catch people doing something right' so you can pat them on the back. 0eople can process only a few facts at a time* thus' a leader needs to keep' things simple. 0eople trust their gut reaction more than statistical data. 0eople distrust a leader#s rhetoric if the words are inconsistent with the leader#s actions.

0(!01!0" Role o% TQM 5ea ers -veryone is responsible for /uality' especially senior management and the C-;* however' only the latter can provide the leadership system to achieve results.' @or instance' in the 45A:Ms' ?eneral -lectric#s C-;' ,ack Welch' instituted leadership training courses at all levels of the organization. The ?eneral -lectric training courses taught leadership approaches and models and provided the opportunity for teams to develop solutions to real business problems. any of the solutions the teams developed were implemented. ,ack Welch supported the development of a leadership system whereby /uality control leaders were developed at all levels in all functions of the organization' including research' marketing' manufacturing' sales' finance' and human resources. %enior managers need to be provided with the skills to implement /uality control techni/ues and actively participate in the /uality council. %enior management has numerous responsibilities. %enior management must practice the philosophy of anagement by Wandering !round = "W!>. anagement should get out of the office and visit customers' suppliers' departments within the organization' and plants within the organization. That way' managers learn what is happening with a particular customer' supplier' or pro$ect. "W! can substantially reduce paperwork. -ncourage subordinates to write only important messages that need to be part of the permanent record. @or e&ample' Finko#s e&ecutives perform normal operating duties for two or three days at one location. This approach is an e&cellent techni/ue for gaining firsthand information.

The idea is to let employees think for themselves. %enior management#s role is no longer to make the final decision' but to make sure the team#s decision is aligned with the /uality statements of the organization. 0ush problem solving and decision making to the lowest appropriate level by delegating authority and responsibility. %enior managers must stay informed on the topic of /uality improvement by reading books and articles' attending seminars' and talking to other T( leaders. The leader sends a strong message to subordinates when that leader asks if they have read a part ocular book or article. %e anagers must find time to celebrate the success of their organization#s /uality efforts by personally participating in award and recognition ceremonies. This activity is an e&cellent opportunity to reinforce the importance of the effort and to promote T( . ! phone call or handshake combined with a sincere 1thank you for a $ob well done2 is a powerful form of recognition and reward. ;ne of the duties of the /uality council is to establish or revise the recognition and reward system. In particular' senior management#s incentive compensation must include /uality improvement performance. !lso' provisions must be made to reward teams as well as creative individuals. %enior managers must be visibly and actively engaged in the /uality effort by sending on teams' coaching teams' and teaching seminars. They should lead by demonstrating' communicating' and reinforcing the /uality statements. !s a rule of thumb' they should spend about one third of their time on /uality. ! very important role of senior managers is listening to internal and e&ternal customers and suppliers through visits' focus groups' and surveys. This information is translated into core values and process improvement pro$ects. !nother very important role is communication. The ob$ective is to create awareness of the importance of T( and provide T( results in an ongoing manner. The T( message must be 1sold2 to personnel' for if they don#t buy it' T( will never happen. In addition to internal efforts' there must be e&ternal activities with customers and suppliers' the media' advertising in trade magazines' and interaction with the /uality community. "y following the preceding suggestions' senior managers should be able to drive fear out of the organization' break down barriers' remove system roadblocks' anticipate and minimize resistance to change' and' in general' change the culture. ;nly with the involvement of senior management can T( be a success. 0(!0" Customer Satis%action The most important asset of any organization is its customers. !n organization#s success depends on how many customers it has' how much they buy' and how often they buy. Customers that are satisfied will increase in number' buy more' and buy more fre/uently. %atisfied customers also pay their bills promptly' which greatly improves cash flow the lifeblood of any organization.

Increasingly' manufacturing and service organizations are using customer satisfaction as the measure of /uality. The importance of customer satisfaction is not only due to national competition but also due to worldwide competition. %ince customer satisfaction is hard to measure' the measurement often is not precise. !s with most attitudes' there is variability among people' and often within the same person at different times. ;ften' due to the difficulty of measuring feelings' customer satisfaction strategies are developed around clearly stated' logical customer opinions' and the emotional issues of a purchase are disregarded. This can be a costly mistake. Customer satisfaction should not be viewed in a vacuum. @or e&ample' a customer may be satisfied with a product or service and therefore rate the product or service highly in a survey' and yet that same customer may buy another product or service. It is of little benefit to understand a customer#s views about a product or service if the customer#s views about competitors# product or service are not understood. The value customers place on one product compared to another may be a better indicator of customer loyalty. Customer loyalty can be sustained only by maintaining a favorable comparison when compared with competitors. !s mentioned before customer satisfaction is not a simple concept to understand or to measure. 0(!0( 'ene%its o% Employee Involvement Involving employees' empowering them and bringing them into the decision making process provides the opportunity for continuous process improvement. The untapped ideas' innovations' and creative thoughts of employees can make the difference between success and failure. Competition is so fierce that it would be unwise not to use every available tool. -mployee involvement improves /uality and increases productivity' because

-mployees make better decisions using their e&pert knowledge of the process. -mployees are more likely to implement and support decisions they had a part in making. -mployees are better able to spot and pinpoint areas for improvement. -mployees are better able to take immediate corrective action. -mployee involvement reduces laborNmanagement friction by encouraging more effective communication and cooperation. -mployee involvement increases morale by creating a feeling of belonging to the organization. -mployees are better able to accept change because they control the work environment. -mployees have an increased commitment to unit goals because they are involved.

0(!0) Continuous /rocess Improvement

(uality based organizations should strive to achieve perfection by continuously improving the business and production processes. ;f course' perfection is impossible because the race is never over* however' we must continually strive for its attainment. Improvement is made by

Oiewing all work as a process' whether it is associated with production or business activities. aking all processes effective' efficient' and adaptable. !nticipating changing customer needs. Controlling in process performance using measures such as scrap reduction' cycle time' control charts' and so forth. aintaining constructive dissatisfaction with the present level of performance. -liminating waste and rework wherever it occurs. Investigating activities that do not add value to the product or service' with the aim of eliminating those activities. -liminating nonconformities in all phases of everyone#s work' even if the increment of improvement is small. +sing benchmarking to improve competitive advantage. Innovating to achieve breakthroughs. Incorporating lessons learned into future activities. +sing technical tools such as statistical process control =%0C>' e&perimental design' benchmarking' /uality function deployment =(@D>' and so forth.

0(!0* /1C3 Cycle The basic 0lan Do Check !ct =0DC!> cycle was first developed by %hewhart and then modified by Deming. It is an effective improvement techni/ue. The four steps in the cycle are e&actly as stated. @irst' plan carefully what is to be done. Ge&t' carry out the plan =does it>. Third' study the results did the plan work as intended' or was the results differentC @inally' act on the results by identifying what worked as planned and what didn#t. +sing the knowledge learned' develop an improved plan and repeat the cycle. The 0D%! cycle is a simple adaptation of the more elaborate problem solving method discussed in the ne&t section. 0(!0+ /ro4lem Solving Metho 0rocess improvement achieves the greatest results when it operates within the framework of the problem solving method' In he initial stages of a program' /uick results are fre/uently obtained because the solutions are obvious or an individual has a brilliant idea' .owever' in the Ion' term' a systematic approach will yield the greatest benefits ' The problem solving method =also called the scientific method> has many variations depending' to some e&tent' on the use* however' they are all similar. shown is the relationship to the 0DC! cycle.

The phases are integrated because each phase is dependent upon the previous phase. Continuous process improvement is the ob$ective' and these phases are the framework to achieve that ob$ective. 0(!0, I enti%y the .pportunity The ob$ective of this phase is to identify and prioritize opportunities for improvement. It consists of three parts) identify the problem' form the team =if one is not in e&istence> and define the scope. 0roblem identification answers the /uestion' 1What are the problemsC2 The answer leads to those problems that have the greatest potential for improvement and have the greatest need for solution. 0roblems can be identified from a variety of inputs. 0(!06 /er%ormance Measures The final concept of Total (uality easurement =T( > is performance measures. ;ne of the alcolm "aldrige Gational (uality !ward core values is managing by fact rather than by gut feeling. anaging an organization without performance measures is like a captain of a ship navigating without instrumentation. The ship would most likely end up traveling in circles' as would an organization. easures play a vital part in the success or failure of an organization. 0(!06!01 .47ectives 0erformance measures are used to achieve one or more of the following seven ob$ectives)

-stablish baseline measures and reveal trends. Determine which processes need to be improved. Indicate process gains and losses. Compare goals with actual performance. 0rovide information for individual and team evaluation. 0rovide information to make informed decisions. Determine the overall performance of the organization.

0(!06!0" Criteria

%imple @ew in number Developed 3elevance to customer) Improvement Cost Oisible Timely

0(!06!0( Strategy The /uality council has the overall responsibility for the performance measures. It ensures that all the measures are integrated into a total system of measures. To develop the system' the /uality council will obtain appropriate information from all of the stall holders. They will utilize the core values' goals' mission' and vision statements as well as the ob$ectives and criteria given above. With this information' the strategic measurement system is created. !n e&ample of a system that emphasizes percent improvement might contain the functions and metrics as given below)

Quality o 0ercent reduction in cost of poor /uality o 0ercent reduction in nonconformities o 0ercent of certified suppliers o 0ercent reduction in supplier base o 0ercent reduction in corrective action cycle time o Cost 0ercent increase in inventory turnover 0ercent reduction in data transactions 0ercent increase in materials shipped direct to work in process by the supplier 0ercent increase in output dollars per employee 0ercent reduction in floor space utilization 8lexi4ility 0ercent reduction in cycle time 0ercent reduction in setup time 0ercent reduction in lotNbatch size 0ercent increase in number of $obs mastered per employee Relia4ility 0ercent of processes capable of Cp P 6.: 0ercent reduction in down time 0ercent reduction in warranty costs 0ercent reduction in design changes 0ercent increase in on time delivery Innovation 0ercent reduction in new product introduction time 0ercent increase in new product sales revenue as a percent of total sales revenue 0ercent increase in new patents granted Customer perception as a leader in innovation 0ercent of management time spent on or leading innovation

0(!09 Quality Control Circles (QCCs) To involve employees in productivity and efficiency improvement activities' a teambased environment must be developed in which they can participate actively in improving their process' product' or service performance. ;ne such employee participation program is /uality control circles =(CCs>. (C-circle activities are usually directed towards improvements in the workplace. They focus on such areas as

Cost %afety 0roductivity

0(!09!01 Case Stu ies: Survey 4y -/C; Malaysia ! 6::6 survey on /uality control circles =(CCs> by the Gational 0roductivity Corporation =G0C> of alaysia revealed that the ma$ority of the respondents were from the manufacturing =76.:H> and service =E4.:H> sectors. ost of the pro$ects undertaken were related to members# own workplaces' work processes' service delivery' and product development. The vast ma$ority =59.4H> of the respondents said that (CC activities had helped reduce operational costs' with savings reported ranging from +%D469.:: to +%D6 million' with the median of +%D9:':::. 0(!10 'enchmar<ing "enchmarking is a systematic method by which organizations can measure themselves against the best industry practices. It promotes superior performance by providing an organized framework through which organizations learn how the 1best in class2 do things' understand how these best practices differ from their own' and implement change to close the gap. The essence of benchmarking is the process of borrowing ideas and adapting them to gain competitive advantage. It is a tool for continuous improvement. "enchmarking is an increasingly popular tool. It is used e&tensively by both manufacturing and service organizations' including Qero&' !TIT' otorola' @ord' and Toyota. "enchmarking is a common element of /uality standards' such as the Chrysler' @ord' and ?eneral otors (uality %ystem 3e/uirements. These standards' sfiptdate that /uality goals and ob$ectives be based on competitive products and benchmarking' both inside and outside the automotive industry. The alcolm "aldrige Gational (uality !ward similarly re/uires that applicants benchmark e&ternal organizations. "enchmarking is the systematic search for best practices' innovative ideas' and highly effective operating procedures. "enchmarking considers the e&perience of others and uses it. Indeed' it is the common sense proposition to learn from others what they do right and then imitate it to avoid reinventing the wheel. "enchmarking is not new and indeed has been around for a long time. In fact' in the 4A::s' @rancis 8owell' a Gew -ngland

0(!10!01 Reasons to 'enchmar< "enchmarking is a tool to achieve business and competitive ob$ectives. It is power and e&tremely effective when used for the right reasons and aligned with organization strategy. It is not a panacea that can replace all other /uality efforts or management processes. ;rganizations must still decide which markets to serve and determine the strengths that will enable them to gain competitive advantage. "enchmarking is one tool to help organizations develop those strengths and reduce weaknesses. "y definition' benchmarking re/uires an e&ternal orientation' which is critical in a world where the competition can easily be on the other side of the globe. !n e&ternal outlook greatly reduces the chance of being caught unaware by competition. "enchmarking can notify the organization if it has fallen behind the competition or failed to take advantage of important operating improvements developed elsewhere. In short' benchmarking can inspire managers =and organizations> to compete. In contrast to the traditional method of e&trapolating ne&t year#s goal from last year#s performance' benchmarking allows goals to be set ob$ectively' based on e&ternal information. When personnel are aware of the e&ternal information' they are usually much more motivated to attain the goals and ob$ectives. !lso' it is hard to argue that an ob$ective is impossible when it can be shown that another organization has already achieved it. "enchmarking is time and cost efficient because the process involves imitation and adaptation rather than pure invention. "enchmarking partners provide a working model of an improved process' which reduces some of the planning' testing' and prototyping effort. !s the old saying goes' Why reinvent the wheelC The primary weakness of benchmarking' however' is the fact that best in class performance is a moving target. @or e&ample' new technology can create /uantum leap performance improvements' such as the use of electronic data interchange =-DI>. !utomobile makers no longer use paper to purchase parts from suppliers. ! computer tracks inventory and transmits orders directly to a supplier#s computers. The supplier delivers the goods' and payment is electronically transmitted to the supplier#s bank. Wall art uses bar code scanners and satellite data transmission to restock its stores' often in a matter of hours. These applications of -DI save tens of thousands of worker hours and whole forests of trees' as well as helping to meet customer re/uirements. @or functions that are critical to innovate as well as imitate. organizations to constantly scan obtained to improve the process. located and adopted early. 0(!10!0" /rocess the business mission' organizations must continue to "enchmarking enhances innovation by re/uiring the e&ternal environment and to use the information 0otentially useful technological breakthroughs can be

;rganizations that benchmark' adapt the process to best fit their own needs and culture. !lthough the number of steps in the process may vary from organization to organization' the following si& steps contain the core techni/ues.

Decide what to benchmark. +aderstand current performance 0lan.

0(!11 Quality Management Systems The International ;rganization for %tandardization =I%;> was founded in 457< in ?eneva' %witzerland' where it is still based. Its mandate is to promote the development of international standards to facilitate the e&change of goods and services worldwide. I%; is composed of more than 5: member countries. The +nited %tates representative is the !merican Gational %tandards Institute =!G%I> The I%; Technical Committee =TC> 4B< developed a series of international standards for /uality systems' which were first published in 45AB new standards =I%; 5:::' 5::4' and 5::7> were intended to be advisory and were developed for use in two party contractual situations and internal auditing. .owever' with their adoption by the -uropean Community =-C> and a worldwide emphasis on /uality and economic competitiveness' the standards have become universally accepted. 0(!1" TQM Concept in =apan T( ' also known as Total (uality Control =T(C>' is a management tool for improving total performance. T(C means organized Faizen activities involving everyone in a company R managers and workers R in a totally systemic and integrated effort toward improving performance at every level. It is to lead to increased customer satisfaction through satisfying such corporate cross-functional goals as /uality' cost' scheduling' manpower development' and new product development. In ,apan' T(C activities are not limited to /uality control only. -laborate system of Faizen strategies has been developed as management tools within the T(C approach. T(C in Faizen is a movement aimed at improvement of managerial performance at all levels. !ccording to the ,apan Industrial %tandards' 1implementing /uality control effectively necessitates the cooperation of all people in the company' including top management' managers' supervisors' and workers in all areas of corporate activities such as market research and development' product planning' design' preparation for production' purchasing' vendor management' manufacturing' inspection' sales and after-sale services' as well as financial control' personnel administration' and training I education. (uality control carried out in this manner is called company-wide /uality control or total /uality control =T(C>.2 (uality control in ,apan deals with /uality of people. It is the fundamental concept of the Faizen-style T(C. "uilding /uality into its people brings a company a half-way towards producing /uality products.

0(!1"!01 E ucation an Training !s a natural follow-up to the concept of building /uality into people' T(C starts with education and training of managers and workers. The ma$or aim of these awareness and training programs is to implant T(C thinking in all employees. T(C education and training is a continuous process. %eparate courses for different organizational levels are organized to reach everyone in the company. 0(!1"!0" Seven main %eature o% the TQM movement in 7apan

Company-wide T(C' involving all employees' organization' hardware' and software -mphasis on education and training for top management' middle management and workers (uality control =(C> circle activities by small groups of volunteers T(C audits !pplication of statistical methods Constant revision and upgrading of standards Gation-wide T(C promotion

0(!1"!0( 3reas Targete 4y TQM in =apan

/ro uct Quality Improvement o (uality assurance o Gew product development o Improvements in the >or<place Cost reduction %afety 0roductivity improvement Management -ducation and training ;rganizational N systems development Cross-functional management 0olicy deployment (uality deployment Supply; /ro uction; an Selling Chain %upply management eeting production /uotas eeting delivery schedules arketing %ales %ervices

0(!1( TQM Concept in Community College 3 ministration

Community colleges' too' have adopted T( ' primarily to improve their management processes. While the number of colleges that has implemented T( systems is not large' an increasing number are e&perimenting with various elements of it. They have approached implementation in a variety of ways. 0erhaps the most common model is for senior leadership to become interested in T( ' to study various applications' and then' to initiate T( practices from the top- down. !t most of these colleges' T( is first applied to leadership team processes or related administrative functions. Incorporation of T( principles into the curriculum and academic administration may follow administrative application. T( has also been introduced to community colleges by mid- level managers who have come in contact with its principles through a curriculum designed and provided by the college for local business and industry. These managers begin to introduce T( practices within their own areas. This grassroots approach often spreads laterally before upward. ;ther colleges have actually become involved in T( along with a consortium of businesses in their service area. "usiness and college participants learn both T( and about the challenges they have in common. The consortium then becomes a critical link with the community' as well as a source of problem solving' support' and encouragement for T( . It is legitimate to /uestion why any leader would be attracted to T( since the model demands basic changes in established management practices. .owever' a rationale for e&perimenting with T( is not difficult to articulate. !t its best' T( can provide a focus and structure for institutional effectiveness that includes the dimensions of /uality and accountability and operationalizes them throughout the college. T( can provide a structure for involving faculty and staff in college problem solving and decision making in ways that are meaningful to them and to the college. T( can also provide a model for transforming a stagnant college organization to a new level of fitness. -ven more fundamental is the fact that the values espoused by T( are the values of community colleges) commitment to /uality' respect for people' focus on process' and the e&pectation of continuous learning. Limitations o% the Stu y The sub$ect Introduction to Cost and anagerial !ccounting is a vast one and due to the in short supply of time we could not complete many of the ma$or portions. If we have had as much as necessary time and given apposite information' it was for sure that we could have industrial a much better report on this topic. !ctually the business organizations of "angladesh are not stressing too much on the practice in total /uality management rather they are practicing traditional management approach in their organization.

!nother problem that we have to face in one of the well known organization we had to go for almost two times to fi& an appointment with the manager. @inally when we met him' he was not willing to give us information not even the company profile which has nothing to maintain secrecy. !t last we decided to drop the study on their organization. Conclusion This was not at all an easy pro$ect to complete. ?athering information was also a difficult task. What ever the limitations were' we made our best effort to overcome them and anchor safe.Go matter how good we do in designing the pro$ect but it#s the knowledge that we gather that remains us till the end and satisfies us. !t last' we hope that our attempt behind this pro$ect is a successful one and will surely bear the e&pected fruit. Re%erences

Course materials provided by course instructor r. (uamrul Islam "esterfield' Dale .. * "esterfield' ?len .. * Total (uality anagement -dgeman' 3ick 8.* ;n 8eaders and 8eadership @redendall' 8awrence D.* 3obbins' Tina 8. ,ournal of anagerial http)NNwww.allbusiness.comNinde&-EE.html http)NNwww.bettermanagement.com.html http)NNwww.campbell.berry.edu.html http)NNen.wikipedia.orgNwikiN ainS0age.html http)NNwww.google.com.html ,uliette' ,andel-8eavitt* T( Case %tudy icrosoft T -ncarta T 3eference 8ibrary 6::9 Geedham' 3obbie 8ee* Total (uality anagement