Total Quality Management

(TQM)

What is Quality?
Excellence or the best
But this is not a practical business concept
Fitness to purpose
Juran J M
Conformance to requirements
Crosby P B
In general quality is a matter of meeting
requirements with an emphasis on customer
requirements.

What is Quality?
The totality of features and characteristics of a product
or service that bear on its ability to satisfy stated and
implied needs.
Formal definition adopted by both British Standards
Institute and American Society for quality control
Degree to which a set of inherent characteristics (of a
product , system or process) fulfills requirements. (of
customer and other interested parties)
Definition in ISO9000:2005 Fundamentals &
Vocabulary
Quality is Customer delightness with respect to,
standard, availability, price and safety.
Latest Definition
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Leaders in the field of Quality

Management

Joseph M. Juran
Defines Quality as . Fitness for use
Background was in statistics
Spread ideas about teamwork, internal customers, problem
solving techniques and pareto analysis for quality issues
W. Edwards Deming
Statistical methods in quality control
Deming cycle (PDCA cycle)
Focuses on process rather than product quality control
Genichi Taguchi
Statistical methods in product and process development
Philip B. Crosby
Zero defects strategy
Getting it right first time
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How Quality is achieved?

Commitment to quality
TQM programs (eg Quality circles,
suggestions,etc) play a main role in achieving
and improving quality of a product in an
organization and also the motivation of the staff
Process to deliver quality
A system to deliver quality constantly and
consistently eg. ISO 9000

Cost of Quality
The costs that are incurred as a result of poor
quality and those which are spent to prevent
these costs are together referred to as the cost
of quality.
Can be divided into 3 categories.
1. Failure: The product has not reached the
intended standard
2. Appraisal: Costs for formal way of assessing
3. Prevention: Costs incurred to the investments
made in quality before production begins

Internal Failure Cost

Scrap costs

Costs of poor-quality
products that must be
discarded, including labor,
material, and indirect costs

Rework costs
Costs of fixing defective
products to conform to
quality specifications

Process failure costs

Costs of determining/
investigating why production
process is producing poorquality products

Price-downgrading costs

Costs of discounting poorquality products - that is,

selling products as seconds

Process downtime costs

Costs of shutting down
process to fix problems
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External Failure Cost

Customer complaint costs

Costs of investigating and

satisfactorily responding to a
customer complaint resulting
from a poor-quality product

Product return costs

Costs of handling and replacing
poor-quality products returned
by customer

Warranty claims costs

Costs of complying with
product warranties

Product liability costs

Litigation costs resulting

from product liability and
customer injury

Lost sales costs

Costs incurred because

customers are dissatisfied
with poor-quality products
and do not make
additional purchases

Appraisal Cost
Inspection and testing
Costs of testing and inspecting materials, parts, and
product at various stages and at end of process

Test equipment costs

Costs of maintaining equipment used in testing
quality characteristics of products

Operator costs
Costs of time spent by operators to gather data for
testing product quality, to make equipment
adjustments to maintain quality, and to stop work to
assess quality
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Prevention Cost

Quality planning costs

Costs of developing and

implementing quality
management program

Product-design costs

Training costs

Information costs

Costs of designing products

with quality characteristics

Process costs

Costs expended to make

sure productive process
conforms to quality
specifications

Costs of developing and putting

on quality training programs for
employees and management
Costs of acquiring and
maintaining data related to
quality, and development and
analysis of reports on quality
performance

Purchase costs

To buy new equipment or

modifications, etc.
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Contribution to Total Quality Cost

prevention cost is the mostly influential factor for quality costs
A rule of thumb: Every Rupee spend in prevention saves
Rs. 10 in appraisal costs

Total
Cost

Total Cost
External Failure

Internal Failure

Prevention
Appraisal

Quality Improvement

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Quality Control vs Quality Assurance

Quality Control: QC works by inspecting all(or a sample of)
finished products. The inspection will be against some
template of what is required and may involve testing of
physical properties or aesthetic conditions. Rejection is the
only way of achieving quality. Within this model it was not
interested to find why things go wrong or how to put them
right.
Quality Assurance: This focus how things are produced (or
the service is carried out) rather than the characteristics of
what is produced; finding effective or best ways of managing
the process to minimize defects and errors. The objective of
this model is systematic investigation and solving problems.
Methods use in this model to assure the quality includes a
formal quality system, internal auditing, etc.
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TQM
TQM is a philosophy of quality that links policy and
operational practice.
Of the three elements of TQM;
Total: suggests the commitment of everyone in the
organization
Quality: ..
Management: implies an active process led from the top

Definition: TQM is a process of involving everyone

in an organization in continuously improving
products and processes to achieve, on every
occasion, quality that satisfies customers needs.
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Concepts of the TQM Philosophy

1. Customer Focus
The goal is to rst identify and then meet customer
needs.
TQM recognizes that a perfectly produced product
has little value if it is not what the customer wants.
Companies need to continually gather information
by means of
focus groups, market surveys, and customer interviews

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Concepts of the TQM Philosophy

2. Continuous Improvement
A philosophy of never-ending improvement.
The company continually strive to be better through
learning and problem solving
Must always evaluate our performance and take
measures to improve it.
Two approaches that can help with continuous
improvement
PDCA Cycle (PDSA Cycle)
Benchmarking
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Concepts of the TQM Philosophy

2.1 PDCA or PDSA cycle
Describes the activities a
company needs to perform
in order to incorporate
continuous improvement in
its operation.
The circular nature of this
cycle shows that continuous
improvement is a neverending process.
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The Deming Cycle

Link the production with consumer needs and focus the
resources of all departments (R&D, design, marketing)
Corporate effort from all to meet the needs

Steps in the Cycle (PDCA):

Plan: Conduct consumer

research, use it for plan
Do: Produce the product
Check: Check products to
make sure it was produced in
accordance with plan
Act: Market the product
Analyze how the product is
received the marketplace in
terms of quality, costs, and
other criteria (con. Research)

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Concepts of the TQM Philosophy

2.2 Benchmarking
Studying the business practices of other
companies for purposes of comparison.
best in class
The ability to learn and study how others do
things is an important part of continuous
improvement.
Does not have to be in the same business
E.g. order filing, product delivery, etc.
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Concepts of the TQM Philosophy

3. Employee Empowerment
Give authority or power to all employees to
seek out quality problems and correct them.
With old concept poor quality is passed on
to someone else
With new concept provides incentives for employees to identify
quality problems.
Employees are rewarded for uncovering quality
problems, not punished.
Their suggestions are implemented

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Concepts of the TQM Philosophy

3. 1 Team approach
TQM stresses that quality is an organizational
effort.
To facilitate the solving of quality problems, it
places great emphasis on teamwork.
Quality Circles
Open discussion is promoted,
and criticism is not allowed.
Although the functioning of quality circles is
friendly and casual, it is serious business.
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Concepts of the TQM Philosophy

4 Use of Quality Tools
If employees are to identify and correct
quality problems,
they need proper training.
They need to understand how to assess quality by
using a variety of quality control tools,
how to interpret ndings,
and how to correct problems.
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Tools in TQM
Tools for Generating Ideas (may be used for organizing as
well)
Check sheets
Scatter diagrams
Cause-and-effect diagrams
Cause-and-effect matrix
Tools to Organize the Data (may be used for generating ideas
as well)
Pareto charts
Flowcharts & Process Flow Charts
Tools for Identifying Problems
Histogram
Statistical process control chart
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Check Sheets
An organized method of recording data
Generate the idea looking at the pattern

Incorporate with histograms

Defect

A
B
C

///
//
/

/
/
//

Hour
4
5

/
/

///
//
//

/
///
////

a checklist can be developed that measures the number of

occurrences per shift, per machine, or per operator. In this
fashion we can isolate the location of the particular defect and
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then focus on correcting the problem.

Histograms
A distribution showing the frequency of occurrences of a
variable
Generate idea and help to identify the problem

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Scatter Diagrams
A graph of the value of one variable vs. another variable
Generate the idea looking at the pattern
Help to identify the problem

increased worker
training might be
associated with a
decrease in the
number of defects
observed.

Productivity

E.g., increased production speed and number of defects could

be correlated positively;

Absenteeism

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Cause-and-Effect Diagrams
Also known as fish-bone diagram
A tool that identifies process elements (causes) that
might effect an outcome
Generate the idea about the causes and their effect
These are problem-solving tools commonly used by
quality control teams.
Specic causes of problems can be explored through
brainstorming.
The development of a cause-and-effect diagram requires
the team to think through all the possible causes of poor
quality.
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Brainstorming
used for generating a large number of ideas, most
of which will subsequently discarded, but with
perhaps a few novel ideas are being identified as
worth following up.

1.
2.
3.

1.
2.
3.

Do
Capture everything
Encourage participation
Ask clarifying questions
Dont
Evaluate anything
Force participation or sequence
Ask judging questions

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Example for Cause-&-Effect

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Notes on Cause-&-Effect
To construct the skeleton, remember:
For manufacturing - the 4 Ms
man, method, machine, material
For service applications
equipment, policies, procedures, people
May add another dimension
See next slide

Advantages

Making the diagram is educational in itself

Diagram demonstrates knowledge of problem solving team
Diagram results in active searches for causes
Diagram is a guide for data collection
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A general cause and effect diagram

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Percent

A graph to identify and plot

problems or defects in
descending order of frequency
Logic behind Paretos principle
is that most quality problems
are a result of only a few
causes. The trick is to identify
these causes.
Find the few causes account
for most of the defects.

Frequency

Pareto Charts

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Flowcharts
A chart that describes the steps in a process
Generate the idea looking at the pattern

Example MRI Flowchart:

1.
2.
3.
4.
5.
6.

Physician schedules MRI

Patient taken to MRI
Patient signs in
Patient is prepped
Technician carries out MRI
Technician inspects film

7.
8.
9.
10.

If unsatisfactory, repeat
Patient taken back to room
MRI read by radiologist
MRI report transferred to
physician
11. Patient and physician discuss
8

80%

11
9

20%

10
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Process Flowcharts
Chart that clearly describes the steps in a process, displaying
different operations (see next slide)
Generate the idea looking at the pattern
Different Process Flowcharts
Outline process chart
Flow process chart
- workflow process chart
- material process chart
- equipment process chart
Two handed process chart
Procedure flowchart

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Process Charts Symbols

Symbol

Name

Description

OPERATION

Indicates main steps in a process, method or

procedure

INSPECTION

Indicates an inspection for quality and/or

check for quantity

TRANSPORT

Indicates the movement of workers,

material or equipment from place to place

DELAY (Temporary
Storage)

Indicates a delay in the sequence of events:

e.g. waiting between consecutive operations

STORE (Permanent
Storage)

Indicates a controlled storage in which

material is received into or issued from s
store

DECESION

Indicates the
operation

used)

(not much

decision

point

for

other

Five Main Symbols, Decision rarely used

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Statistical Process Control Charts

These charts are used to evaluate whether a
process is operating within expectations relative to
some measured value such as weight, width, or
volume.
For example, we could measure the width of a
tire, or the volume of a bottle of soft drink.
When the production process is operating within
expectations, we say that it is in control.

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Statistical Process Control Charts

Upper control limit
Target value
Lower control limit

Four key steps

Measure the process
When a change is
indicated, find the
assignable cause
Eliminate the cause
Restart the revised
process

Time

Concepts of the TQM Philosophy

5 Product design
Products need to be designed to meet customer
expectations.
5.1 QFD:
to ensure that the product design meets
customer expectations.
A useful tool for translating the voice of the
customer into specic technical requirements
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Concepts of the TQM Philosophy

5.2 Reliability
An important dimension of product design is that
the product functions as expected - reliability
Reliability is the probability that a product or part
will perform as intended for a specied period of
time under normal conditions.
Product reliability - product warranties.
E.g, product with a 90% reliability has a 90%
chance of functioning as intended. the probability
that the product will fail is 10%
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Concepts of the TQM Philosophy

Reliability of the system is computed as the product
of the reliabilities of the individual components:

Rs ( R1 )(R2 )(R3 )....( Rn )

Where Rs -Reliability of the product or system

R1n Reliability of components 1 through n

Example 1: Assume that product has 2 parts, both

of which must work for the product to function.
Part 1 has a reliability of 80% and part 2 has a
reliability of 90%. Compute the reliability of the
product.
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Concepts of the TQM Philosophy

The failure of certain products can be critical.
To increase product reliability build
redundancy into the product design in the
form of backup parts
Reliability Reliability Probability of

st
nd
nd
Rs of 1

of
2

needing
2


component component component

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Concepts of the TQM Philosophy

Example 2: Two power generators provide
electricity as a facilitys main and backup
generator. The main generator has a reliability
of 0.95 and the backup has a reliability of
0.90. What is the reliability of the system?

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Concepts of the TQM Philosophy

Example 3:
a) An office security system at Delco, Inc. has two
component parts, both of which must work for the
system to function. Part 1 has a reliability of 80%, and
part 2 has a reliability of 98%. Compute the reliability of
the system.
b) Delco, Inc. from Problem a), is not happy with the
reliability of its security system and has decided to
improve. The company will add a backup component to
part 1. The backup component will also has a reliability
of 80%. What is the reliability of the improved system?
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Concepts of the TQM Philosophy

6. Process Management
Quality products comes from quality process
Quality should be built into the process
Identify quality problems and correct them.
rather than discarding the defective items
after production
Monitor the process quality using quality tools
such as control charts
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Concepts of the TQM Philosophy

7. Managing superior quality
TQM extends the concept of quality to a
companys suppliers
Traditionally when materials arrived, an inspection
was performed to check their quality

Waste of time, cost, contribute to poor quality

TQM extends the concept of quality to suppliers

and ensure that they engage in the same quality
practices.

If suppliers meet preset quality standards do not have

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to be inspected upon arrival

Concepts of the TQM Philosophy

Concept

Main Idea

Customer focus

Goal is to identify and meet customer needs

Continuous improvement

A philosophy of never-ending improvement

Employee empowerment

Employees are expected to seek out, identify

and correct quality problems

Use of quality tools

Ongoing employee training in the use of

quality tools

Product design

Products need to be designed to meet

customer expectations

Process management

Quality should be built into the process:

sources of quality problems should be
identified and corrected

Managing superior quality Quality concepts must extend to a companys

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