CHAPTER 1: TQM EVOLUTION

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CHAPTER 1 TQM EVOLUTION
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Chapter Objectives At the end of the lesson the
students will be able to

• be generate the right meaning and interpretation
  of quality and other related terms as these will
  provide a strong foundatin for TQM
• Identify the various dimensions of quality
• Outline a historical perspective of quality and
  the evolution of TQM

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Introduction

• What is Quality?
• Merriam Websters Collegiate Dictionary, 10th
  Edition(1994) defines quality as
• an inherent feature degree of excellence and
  superiority in kind
• Some definitions that have gained wide acceptance
  in the corporate world
• Meeting or exceeding customer expectations
• Juran, one of the quality qurus, defined quality
  as
• Fitness for Use

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Introduction

• Based on Jurans definiton, quality therefore
  does not only have to be perceived by the
  customer, but the customer experience of quality
  of a product or service is more important.
• Quality does not mean an expensive product

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Introduction

• The American National Standards Institute (ANSI)
  and the American Society for Quality (ASO)
  defined quality as
• The totality of features and characteristics of a
  product or service that bears on its ability to
  satisfy customers stated and implied needs.

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The Importance of Quality The Japanese Chain
Reaction
Improve Quality
Costs decreases due to fewer defects, Lesser
rework, fewer delays and better use Of Men,
Machine and Materials
Improve Productivity
Capture market with better quality and lower price
Stay in business

• Provide more jobs

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Introduction

• What is a customer?
• Anyone who is impacted by the product or services
  delivered by an organization
• External customer- the end user
• Internal customer- other divisions of the company
  that receive the processed product.

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Introduction

• What is a product?
• the output of a process carried by the
  organization. It may be goods (e.g. cellphones),
  software(e.g. a computer code, a report) or
  service (e.g. banking, insurance

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Introduction

• How is customer satisfaction achieved?
• Two Dimensions of Quality
• Product feature- refers to the quality of design.
  
• In a manufacturing industry, it includes
  performance, reliability, durability, ease of
  use, esthetics, etc
• In a service industry, customer satisfation is
  gained through accuracy, timeliness, friendliness
  and courtesy, knowledge of server, etc.

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Introduction

• Freedom from deficiencies refers to quality of
  conformance
• Conformance to standards- ability of the product
  or service to conform to the stated and implied
  requirements of customers.
• Higher conformance means fewer complaint and
  increased customer satisfaction

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Introduction

• Why Quality?
• Reasons why quality is a cardinal priority for
  most organizations.
• Competition
• Changing customer-the new customer is not only
  commanding priority based on volume but is more
  demanding about the quality system
• Changing product mix the shift from low volume
  high price to high volume, low price resulted in
  a need to reduce the internal cost of poor
  quality.

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Introduction

• Product complexity- as systems have become more
  complex the reliability requirments for suppliers
  of components have bome more stringent
• Higher level of customer satisfaction- higher
  customer expectations are getting spawned by
  increasing competition.

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History of quality management

• To know the future, know the past!
• Before Industrial Revolution, skilled craftsmen
  served both as manufacturers and inspectors,
  building quality into their products through
  their considerable pride in their workmanship.
• Industrial Revolution changed this basic concept
  to interchangeable parts. Likes of
• F. W. Taylor (scientific management fame)
  emphasized on the use of scientific standards
  equitably to managers as well as workers.

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History of quality management

• To know the future, know the past!
• Adam Smith who advocated dividing the labor
  required to make a product into simple,
  repetitive tasks in order to develop workers
  skills, save time and use specialized tools
• Frank and Lilian Gilbreths Time and Motion
  economy, they believed that a way a task is
  performed is as important as the time it takes to
  do it.

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History of quality management

• Statistical approaches to quality control started
  at Western Electric with the separation of
  inspection division. Pioneers like Dr. Walter
  Shewhart, Deming W.Edwards and Joseph M. Juran
  were all employees of Western Electric.
• Dr. Walter Shewart (1891-1967) developed the
  Plan, Do, Check Act (PDCA) cycle for continuous
  improvement which is in use even today
• After World War II, under General MacArthur's
  Japan rebuilding plan, Deming and Juran went to
  Japan.
• - Deming W, Edwards (1900-1993) modified PDCA
  cycle of Shewart to the Plan, Do, Study and Act
  (PDSA). He also advocated the extensive used of
  statistical quality control theory to Japanese
  industry along with Juran.

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History of quality management

• Deming stressed the importance of suppliers and
  customers for the business development and
  improvement.
• He believed that people do their best and it is
  the system that must change to improve quality.
• His 14 Points for Management formed the basis
  for his advise to top Japanese management.

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History of quality management

• Joseph M. Juran (1904), developed the Statistical
  Quality Handbook for Western Electric Company. He
  identified Fitness of quality and popularized the
  same
• Juran travelled to Japan to teach is own
  theories- that hands-on management was necessary
  at all levels of corporation to ensure quality
  control and that problems are opportunities to
  make improvements.
• His approach is still known today as the Juran
  Trilogy quality planning, quality control and
  quality improvement

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History of quality management

• In Japan the following individual took seed from
  this training and went on to developed their own
  major contributions to what is now Total Quality
  Management
• Kaoru Ishikawa (1915-1989), strongly advocated
  the use of cause and effect diagram to provide a
  true representation of the organizational impact
  and procedures. He developed Fishbone or
  Ishikawa diagram for cause and effect analyis.
• Taichi Ohno, known as the father of just-inTime
  production. He is also the co-creator of Toyota
  Production System (TPS)

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History of quality management

• Shigeo Shingo worked with Ohno on the TPS process
  and developed some of its popular concepts
  including poka-yoke (which means mistake-proof
  in Japanese and refers to taking human judgement
  out of some types of production, thereby
  minimizing human errors)

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History of quality management

• Next 20 odd years, when top managers in USA
  focused on marketing, production quantity and
  financial performance, Japanese managers improved
  quality at an unprecedented rate.
• Market started preferring Japanese products and
  American companies suffered immensely.
• America woke up to the quality revolution in
  early 1980s. Ford Motor Company consulted Dr.
  Deming to help transform its operations.
• (By then, 80-year-old Deming was virtually
  unknown in USA. Whereas Japanese government had
  instituted The Deming Prize for Quality in 1950.)

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History of quality management

• Managers started to realize that quality of
  management is more important than management of
  quality. Birth of the term Total Quality
  Management (TQM).
• TQM Integration of quality principles into
  organizations management systems.
• Early 1990s Quality management principles
  started finding their way in service industry.
  FedEx, The Ritz-Carton Hotel Company were the
  quality leaders.
• TQM recognized worldwide Countries like Korea,
  India, Spain and Brazil are mounting efforts to
  increase quality awareness.

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The Deming 14 Point Philosophy

• The Deming Philosophy
• Definition of quality, A product or a service
  possesses quality if it helps somebody and enjoys
  a good and sustainable market.

Decrease cost because of less rework, fewer
mistakes.
Productivity improves
Improve quality
Capture the market with better quality and
reduced cost.
Long-term competitive strength
Stay in business
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Demings 14 Point Management

• Create and publish to all employees a statement
  of the aims and purposes of the company. The
  management must demonstrate their commitment to
  this statement.
• Learn the new philosophy.
• Understand the purpose of inspection to reduce
  the cost and improve the processes.
• End the practice of awarding business on the
  basis of price tag alone.
• Improve constantly and forever the system of
  production and service.

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1. Institute training
2. Teach and institute leadership.
3. Drive out fear. Create an environment of
   innovation.
4. Optimize the team efforts towards the aims and
   purposes of the company.
5. Eliminate exhortations for the workforce.
6. Eliminate numerical quotas for production.
7. Remove the barriers that rob pride of
   workmanship.
8. Encourage learning and self-improvement.
9. Take action to accomplish the transformation.

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Jurans Quality Trilogy

• Quality Trilogy
• Quality planning Process of preparing to meet
  quality goals. Involves understanding customer
  needs and developing product features.
• Quality control Process of meeting quality goals
  during operations. Control parameters. Measuring
  the deviation and taking action.
• Quality improvement Process for breaking through
  to unprecedented levels of performance. Identify
  areas of improvement and get the right people to
  bring about the change.

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Jurans Quality Trilogy

• Quality Trilogy
• Quality planning Process of preparing to meet
  quality goals. Involves understanding customer
  needs and developing product features.
• Quality control Process of meeting quality goals
  during operations. Control parameters. Measuring
  the deviation and taking action.
• Quality improvement Process for breaking through
  to unprecedented levels of performance. Identify
  areas of improvement and get the right people to
  bring about the change.

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Major Quality Concepts

• 1. Balance Scorecard Robert Kaplan and David
  Norton, suggest that a businesss executive team
  measure progress in four areas that are equally
  important
• knowledge
• financial performance
• Internal business process and
• Learning/growth
• Using the knowledge to focus the entire
  organization and its
• various programs on balancing the scorecard

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Major Quality Concepts
2. ISO Standards - The International
Standardization Organization (ISO). -
headquartered in Switzerland - more than 100
nations are members, that define and agree on,
and abide by a wide rang of product and process
safety and quality standards - the idea behind
ISO certification is that products made in
different nations be compatible for use in
others. - this allows manufacturers to buy parts
from suppliers in other countries.
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Major Quality Concepts
- The Quality Management Systems (QMS) standards
are know as ISO 9000 family of standards (ISO
9000-2000, ISO 9001-2000, ISO 9004-2000) the
environmental management system are ISO 14000 and
so on. 3. Just-in-Time a manufacturing theory
of producing just enough product to fill current
orders as they are due. just in time for them
to be used
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Major Quality Concepts
4. Kaizen a Japanese term fro unending
improvement -Kaizen represents a system in
which management encourages and implements small,
incremental improvements, involving employees as
team members and creating a culture of workers
who all striving to do better - it focuses on
simplifying complex process and training
employees to measurable improve them.
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Major Quality Concepts
5. Quality Circles based on a Japanese method
of grouping people together in Quality Control
(QC), meetings where they shared their expertise
and worked to solved a problem or improve
process. 6. Six Sigma created by Motorola in
1980s. The name refers to a scientific way of
describing quality based on variations that occur
in any process-plus or minus three sigmas.
Sigma is the Greek letter that signifies the
standard deviations in a mathematical
formula. -the sigma level quantifies defects
per million opportunities (DPMO)
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Major Quality Concepts
7. TOTAL QUALITY MANAGEMENT a comprehensive,
organization-wide effort to improve the quality
of products and services, applicable to all
organizations. - TQM quality is managed by the
total effort of an organization, and that each
department or phase of production is responsible
for making its part of the product or services
as flawless as possible before passing it on the
next user or phase.
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Major Quality Concepts
7. TOTAL QUALITY MANAGEMENT a management
philosophy, a paradigm, a continuous improvement
approach to doing business through a new
management model - TQM quality is managed by
the total effort of an organization, and that
each department or phase of production is
responsible for making its part of the product
or services as flawless as possible before
passing it on the next user or phase.