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STQK 6134
Total Quality Management
Mid-Term
SEM 1 : 2009/2010

• Quality Management Principle

• Quality Award – Framework
• How Quality works lead to profitability
• CRM – establish program for customer
retention and loyalty
• HRM – importance of HR in QM
• Leadership role in strategic quality planning

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QUALITY MANAGEMENT PRINCIPLE

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Quality Management Principle

• Leadership -> top mgmt commitment
• Customer Focus -> customer oriented
• Continual Improvement -> process
• People Involvement -> teamwork -> shared
goal
• Process oriented -> flowcharts
• Result Oriented

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Deming Philosophy

The Deming philosophy focuses on

continual improvements in product and
service quality by reducing uncertainty and
variability in design, manufacturing, and
service processes, driven by the leadership
of top management.

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Deming’s System of Profound Knowledge

• Appreciation for a system
• Understanding variation
• Theory of knowledge
• Psychology

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The ISO 9001:2000 Requirements:

1. Scope
1. General
2. Application
2. Normative reference
3. Terms and definitions
4. Quality management system
1. General requirements
2. Documentation requirements
1. General
2. Quality manual
3. Control of documents
4. Control of records
5. Management responsibility
1. Management commitment
2. Customer focus
3. Quality policy
4. Planning
1. Quality objectives
2. Quality management system planning

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Deming’s 14 Points (Abridged)
1. Create and publish a company mission
statement and commit to it.
2. Learn the new philosophy.
3. Understand the purpose of inspection.
4. End business practices driven by price alone.
5. Constantly improve system of production
and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear and create trust.
9. Optimize team and individual efforts.
10. Eliminate exhortations for work force.
11. Eliminate numerical quotas and M.B.O.
Focus on improvement.
12. Remove barriers that rob people of pride
of workmanship.
13. Encourage education and self-improvement.
14. Take action to accomplish the transformation.

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Crosby’s Absolutes of Quality Management

•Quality means conformance to requirements
•Problems are functional in nature
•There is no optimum level of defects
•Cost of quality is the only useful measurement
•Zero defects is the only performance standard

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Principles of Total Quality
•Customer and stakeholder focus
•Process orientation
•Continuous improvement and learning
•Employee engagement and teamwork
•Management by fact
•Visionary leadership and a strategic orientation

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QUALITY AWARD – FRAMEWORK

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Baldrige Criteria Framework: A

Systems Perspective

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The framework provides a high-level overview of the Baldrige Criteria for Performance
Excellence and illustrates how the Criteria provide a systems perspective for managing
your organization to achieve performance excellence. From top to bottom, the
framework has three basic elements—the Organizational Profile, the system operations,
and the system foundation (Measurement, Analysis, and Knowledge Management).
The Organizational Profile (the umbrella at the top of the figure) sets the context for the
way your organization operates. Your environment, key working relationships, and
strategic challenges and advantages serve as an overarching guide for your organizational
performance management system.
The system operations (middle of the figure) are composed of the six Baldrige Categories
that define your operations and the results you achieve.

The leadership triad—Leadership, Strategic Planning, and Customer Focus—

emphasizes the importance of a leadership focus on strategy and customers. Senior
leaders set your organizational direction and seek future opportunities for your
organization.

The results triad—Workforce Focus, Process Management, and Results—focuses on

your workforce and key processes that accomplish the work of the organization that
yields your overall performance results.

ALL actions point toward Results.

The horizontal arrow in the center of the framework links the two triads—a linkage
critical to organizational success—and indicates the importance of feedback in an
effective performance management system.
The system foundation (bottom of the figure) is composed of Measurement, Analysis, and
Knowledge Management, which are critical to a fact-based, knowledge-driven system for
improving performance and competitiveness.

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HOW QUALITY WORKS LEAD TO

PROFITABILITY

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Product Quality and Business Performance -

PIMS Studies

• Product quality is the most important determinant of

business profitability.
• Businesses offering premium quality products and services
usually have large market shares and were early entrants
into their markets.
• Quality is positively and significantly related to a higher
return on investment for almost all kinds of products and
market situations.
• A strategy of quality improvement usually leads to
increased market share but at a cost in terms of reduced
short-run profitability.
• High-quality producers can usually charge premium prices.

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Quality and Profitability

Improved quality Improved quality

of design of conformance

Higher perceived Higher Lower

value prices manufacturing and
service costs
Increased market Increased
share revenues

Higher profitability
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 CRM – ESTABLISH PROGRAM FOR
CUSTOMER RETENTION AND LOYALTY

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CRM – establish program for customer

retention and loyalty
• Marketing
– Retention
– loyalty
• IT
– Customer DB
• Quality Management
– Customer relationship
– Customer Focus
– Customer requirement
– Customer loyalty

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HRM – IMPORTANCE OF HR IN QM

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HRM – importance of HR in QM
• Visionary leadership
• Customer focus
orientation
– Employee attitude
• Effective communication
– To-down
– Bottom-up
• Congruent objective
– Shared/common goal
• Staff selection and
deployment
• Competent staff
• Teamwork spirit
• Reward and motivation
– Performance measurement
• Training and education
– deployment
• Innovative and creativity
– Environment should
encourage

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LEADERSHIP ROLE IN STRATEGIC

QUALITY PLANNING

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•vision that stimulates hope and mission that transforms hope into reality;
•radical servanthood that saturates the organization;
•stewardship that shepherds its resources;
•integration that drives its economy;
•the courage to sacrifice personal or team goals for the greater community good;
•communication that coordinates its efforts;
•consensus that drives unity of purpose;
•empowerment that grants permission to make mistakes, encourages the honesty
to admit them, and gives the opportunity to learn from them;
•conviction that provides the stamina to continually strive toward business
excellence

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Leading Practices – Leadership

• Create a customer-focused • Review organizational
strategic vision and clear performance
quality values
• Create an environment and
• Create and sustain governance system that
leadership system and
environment for fosters legal and ethical
empowerment, innovation, behavior
and organizational learning • Integrate public
• Set high expectations and responsibilities and
demonstrate personal community support into
commitment and business practices
involvement in quality
• Integrate quality values into
daily leadership and
management and
communicate extensively

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Complementary leadership styles

•Directing
•Coaching
•Supporting
•Delegating

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Leadership in the Baldrige Criteria

The Leadership Category examines how an organization’s senior

leaders address values, directions, and performance expectations,
as well as a focus on customers and other stakeholders,
empowerment, innovation, and learning. Also examined is the
organization’s governance and how the organization addresses its
public and community responsibilities.
1.1 Organizational Leadership
a. Senior Leadership Direction
b. Organizational Governance
b. Organizational Performance Review
1.2 Social Responsibility
a. Responsibilities to the Public
b. Ethical Behavior
c. Support of Key Communities

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Strategic Planning in the Baldrige

Criteria
The Strategic Planning Category examines how an organization
develops strategic objectives and action plans. Also examined
are how chosen strategic objectives and action plans are
deployed and how progress is measured.
2.1 Strategy Development
a. Strategy Development Process
b. Strategic Objectives
2.2 Strategy Deployment
a. Action Plan Development and Deployment
b. Performance Projection

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