Total Quality Management

1. Total Quality Management Einstein & Athalia

2. Structure I. Introduction II. Reasons to learn about TQM III. Cost of quality IV. Total quality management principles V. Tools of TQM VI. Quality process component

3. Structure (Cont’d) VII. Barriers to TQM VIII.Benefits of TQM IX. Summary

4. Introduction: • Total Quality Management (TQM) is a management approach that aims for long-term success by focusing on customer satisfaction. TQM is based on the participation of all members of an organization in improving processes, products, services, and the culture in which they work.

5. II. Reasons To Learn About TQM (Cont’d) A. Managers need to use their technical expertise and the quality process to improve product quality and their firm’s productivity B. Managers need to use their interpersonal skills as a change agent and contest for power in an organization C. Managers need to understand that Quality is a part of production - it is not apart from production

6. II. Reasons To Learn About TQM (Cont’d) D. Engineers/Mangers need to be creative in improving the engineering process, and recognize that “quality” is not features; that is, a Ford-built Lincoln has more features than a Ford-built Taurus, but it does not necessarily have higher quality E. Engineers/Managers need to think beyond issues of technology, and learn the means whereby people, processes and technology come together

7. III. Cost of Quality A. Contractors pay a significant price for poor quality resulting from accidents, waste, rework, inefficiencies, poor subcontractor performance and poor communication - these costs are estimated to be between 5% and 30% of the construction cost of a facility B. Cost of nonconformance - includes both direct and indirect costs of not doing things right the first time

8. III. Cost of Quality 1. Factors a) Accidents b) Omissions c) Errors d) Poor workmanship e) Being late 2. Results a) Rework b) Recalls c) Expediting

9. III. Cost of Quality (Cont’d) d) Removal of punch list items e) Time extensions f) Litigation costs and damages g) Penalties and liquidated damages h) Increased insurance costs

10. III. Cost of Quality (Cont’d) C. Cost of Conformance - includes preventive measures 1. Inspection of direct hire work 2. Inspection of subcontractor work 3. Inspection at vendor source of supply 4. Inspection of shipments 5. Review of shop drawings

11. III. Cost of Quality (Cont’d) 6. All training costs, including safety 7. Facilitator costs 8. Salary of quality coordinator 9. Meetings of the steering committee and quality improvement teams 10. Administration of the quality management program 11. Reward system

12. IV. Total Quality Management Principles • Provide understanding of and guidance on the application of TQM A.Customer-Driven Organization 1. Organizations depend on their customers and therefore should understand current and future customer needs, meet customer requirements, and strive to exceed customer expectations

13. IV. Total Quality Management Principles (Cont’d) 2. It requires 10 times as much money to attract a new customer than it requires to keep a customer you already have......keep the present customer happy B. Leadership 1. Leaders establish unity of purpose, direction, and the internal environment of organization; they fully involve people in achieving the organization’s objectives

14. IV. Total Quality Management Principles (Cont’d) 2. The difference between an average and an outstanding company is the leadership they have C. Involvement of People 1. People are the essence of an organization and their full involvement enables their knowledge and experiences to be used for the organization’s benefit 2. Employees are a company’s greatest asset

15. IV. Total Quality Management Principles (Cont’d) 3. An individual without information can not take responsibility; an individual with information can and will take responsibility D. Process Approach - A desired result is achieved more effectively when related resources and activities are managed as a process

16. IV. Total Quality Management Principles (Cont’d) E.System Approach to Management - Identifying, understanding, and managing a system of interrelated processes for a given objective will contribute to the effectiveness and efficiency of the organization

17. IV. Total Quality Management Principles (Cont’d) F. Continual Improvement 1. Continual improvement is a permanent objective of the organization 2. In the race for quality, there is no finish line 3. Quality comes from within; it comes from the hearts and the minds of the people

18. IV. Total Quality Management Principles (Cont’d) G. Factual Approach to Decision Making - Effective decisions and actions are based on the analysis of data and information H. Mutually Beneficial Supplier Relationships 1. Mutually beneficial relationships are established to enhance the ability of both organizations to create value 2. Relates to Partnering -Lecture 33

19. V. Tools of TQM A. Check Sheet - 1. Tabulates frequency of occurrence 2. Easy to use and understand 3. Data gathered here can be used in other tools

20. V. Tools of TQM (Cont’d) B. Graph 1. Visual display of data 2. Major types a) Line graph b) Bar chart c) Circle diagram (pie chart)

21. V. Tools of TQM (Cont’d) C. Histogram - 1. Portrays frequency of occurrence 2. Shows various measures of central tendency D. Pareto Chart - 1. Visually portrays problems and causes in order of severity or frequency

22. V. Tools of TQM (Cont’d) 2. Helps determine which problems or cause to tackle first E. Cause-and-effect diagram 1. Portrays possible causes of a process problem 2. Helps determine root cause

23. V. Tools of TQM (Cont’d) F. Scatter diagram 1. Indicates the relationship between two variables 2. Displays the strength of that relationship G. Control Chart - 1. Monitors a process to determine magnitude of variation

24. V. Tools of TQM (Cont’d) 2. Estimates the parameters of a process 3. Reduces the variability of a process H. Flowchart 1. Portrays all the steps in a process 2. Helps understand the process

25. VI. Quality Process Component A. Motivation - based on recognition, commendation, recommendation, repeat business, reward B. Communication - must be team-wide, involving all partners, as well as thorough, honest, and complete C. Commitment - to the project, to the process, to all the partners, and to the promised result

26. VI. Quality Process Component (Cont’d) D. Expectations - realistic, reasonable, communicated, understood, and accepted E. Ability - adequate, understood, and consistent F. Involvement - total, all-party, and consistent G. Feedback - thorough, understandable, and complete Follow-up - complete and consistent, as well as long term

27. VII. Barriers to TQM A. Lack of trained workers/poorly installed equipment/poor workmanship B. Competitive markets C. Poor plans and scheduling specifications/poorly defined work scope D. Bad attitudes E. Lack of competent field managers

28. VIII. Benefits of TQM A. Better defined project scope and objectives B. Greater communication of objectives C. Teamwork D. Effective planning and scheduling E. Appropriate Training

29. VIII. Benefits of TQM (Cont’d) F. Improved quality of materials, equipment, and workmanship • Case Studies – Refer to Douglas Electrical Case

30. IX. Summary • TQM principles • Tools of TQM • Barriers to TQM • Benefits of TQM