1. TOTAL QUALITY MANAGEMENT Nakia Madry Katerina Stecova Krajewski, L. and Ritzman L. (2002). Operations Management: Strategy and Analysis. 6th Ed. Upper Saddle River, NJ: Pearson Education, Inc.

2. Presentation Outline • Background Information • Customer Satisfaction • Employee Involvement • Continuous Improvements • Improving Quality through TQM • Awards and Standards • Example • Questions

3. Background Information • Challenge for Businesses • Producing quality products or services • TQM History (1970s) • Japan • Edward Deming • Joseph Juran • TQM Definition • A philosophy that stresses customer satisfaction, employee involvement, and continuous improvements in quality. TQM also involves benchmarking, product and service design, process design, purchasing, and problem solving tools.

4. Purchasing • Product/Service Design • Process Design • Benchmarking • Problem Solving Tools • Employee Involvement • Continuous Improvement Customer Satisfaction Background Information (cont’d)

5. Customer Satisfaction • Conformance to Specifications • Quality = if online order comes within specified delivery time • Value • Quality = if a $2 pen serves for a year • Fitness for Use • Quality = if it was easy to assemble a desk and if it served well • Support • Quality = computer repair free of charge • Psychological Impressions • Quality = nicely dressed, friendly and sympathetic employees

6. Employee Involvement • Cultural Change • Defining customer for each employees • Philosophy of “quality at source” • Teams • Problem-solving teams • Special purpose teams • Self managing teams • Individual Development • Training • New work methods to experienced workers • Current practices to new workers

7. Continuous Improvement • Steps for Achieving Continuous Improvement: • Train employees in the methods of statistical process control (SPC) • Make SPC methods a normal aspect of daily operations • Build work teams and employee involvement • Utilize problem-solving tools within the work teams • Develop a sense of operator ownership in the process

8. Quality Improvement through TQM • Purchasing Considerations • Firm’s quality depends on supplier’s quality • Product/Service Design • Testing of new design with focus on market • Process Design • Cooperation of operation managers and designers • Benchmarking • Measuring against industry leaders • Problem-Solving Tools • Data analysis tools

9. Quality Awards and Standards • Malcom Baldridge National Quality Award • The award promotes, recognizes, and publicizes quality strategies and achievements • Recipients: IBM, 3M, Federal Express, Merrill Lynch • ISO 9000 • A set of standards governing documentation of a quality program • ISO 14000 • Documentation standards that required participating companies to keep track of their raw materials use and their generation, treatment, and disposal of hazardous waste

10. Example • Parkroyal Hotel, New Zealand • Luxury hotel with 297 guest rooms, three restaurants, three lounges, and 338 employees serving 2,250 guests each week who purchase 2,450 meals • High-level of quality is sustained through: • Empowering employees • Tracking performance and identifying areas needing improvement • Reminding employees of quality standards • Employee recruiting, training, and motivation

11. Questions