Total Quality Management: Frameworks, Measures, and Standards

1. Total Quality Management: Frameworks, Measures, and Standards

2. Module Objectives • Trace the evolution of total quality management (TQM) beyond a simple emphasis on product conformance • Explain the major axioms of TQM: commitment to quality; extensive use of scientific tools, technologies, and methods; total involvement in the quality undertaking; and continuous improvement • Describe the impact of TQM pioneers such as Deming, Juran, Crosby, and Imai on the development of TQM • Identify the various metrics used to evaluate performance on the quality dimension • Explain the various standards and certification programs that have been implemented at the state, national, and international levels • Understand new developments in quality such as six sigma

3. Total Quality Management Total quality management establishes an organization wide focus on quality, merging the development of a quality-oriented corporate culture with intensive use of management and statistical tools aimed at designing and delivering quality products to customers.

4. Traditional vs TQM Organizational Structure Traditional TQM Direction Organizational Organizational of Structure View Support Employees Top Lower Level Management Management and Front Line Supervisors Middle Management Middle Management Lower Level Management and Top Front Line Supervisors Management Employees

5. Commitment to Quality Total Extensive use of Involvement in Scientific Tools the Quality and Techniques Undertaking Continuous Improvement Major Axioms of TQM

6. Pioneers of TQM Frameworks • Dr. W. Edwards Deming • Dr. Joseph Juran • Philip B. Crosby • Masaaki Imai

7. Deming’s 14 Points for Management

8. Deming’s Theory of Variance This theory views variations from standard activities as a major source of problems for all operations management processes and most firms.

9. Categories of Variance Source of Variance Common Cause Special Cause Type of Controlled MANAGEMENT EMPLOYEE Variance Uncontrolled MANAGEMENT MANAGEMENT

10. 5 Deadly Sins • Lack of constancy • Concentration on short term profits • Over reliance on performance appraisals • Job-hopping • Over emphasis on visible figures

11. Juran and TQM • Compelling definitions of quality and the cost of quality (COQ) • Quality habit • Quality trilogy • Universal breakthrough sequence

12. Cost of Quality • Prevention costs • Internal failure costs • External failure costs • Appraisal costs

13. Quality Habit • Establish specific goals that identify what organization members should do and why • Establish plans for reaching those goals with enough detail to guide people’s actions from beginning to end • Assign clear responsibilities for meeting the goals • Base rewards on results

14. Quality Trilogy

15. Universal Breakthrough Sequence • Proof of need • Project identification • Organization for improvement • Diagnostic journey • Remedial action • Resistance to change • Holding on to the gains

16. Philip B. Crosby and TQM • Absolutes for quality management • 14 steps for quality improvement • Zero defects

17. Absolutes for Quality Management • Quality is conformance to requirements • Quality systems amount to prevention • Zero defects define performance standard • Measurement of quality is the price of nonconformance

18. 5 States of Quality Awareness • Uncertainty • Awakening • Enlightenment • Wisdom • Certainty

19. 14 Steps for Quality Improvement • Management commitment • Quality improvement teams • Quality measurement • Cost of quality evaluation • Quality awareness • Corrective action • Zero defects planning • Employee education • Zero defects day • Goal setting • Error cause removal • Recognition • Quality council • Do it all over again!

20. Imai and Continuous Improvement • Kaizen (continuous improvement) • Process view of the system • Success comes from people • Constant sense of urgency

21. Measuring Quality within the Firm • Product quality traits • Quality performance at the corporate level • Quality through design • Vendor quality • Production quality

22. Defining the Six-Sigma Program • All processes inherently move over tim • To go from the traditional TQM three-sigma to six-sigma quality effort requires a more intensive approach • To achieve truly world-class quality and performance, we need to focus on the processes • Six-sigma quality is the result of a well-defined and structured process

23. Six-Sigma in Action

24. Defects per Million Parts Design Limit Defective Parts Fraction Defective +/- 1σ 317 per thousand .3173 +/- 2σ 45 per thousand .0455 +/- 3σ 2 per thousand .0027 +/- 4σ 63 per million .000063 +/- 4.5σ 3.4 per million .0000034 +/- 5σ 574 per billion .000000574 +/- 6σ 2 per billion .000000002 +/- 7σ .3 per billion .0000000000003 +/- 8σ .001 per billion .000000000000001

25. Defects per Million Parts - 1.5 Sigma off Center

26. Comparing Sigma Quality Levels

27. D-M-A-I-C – The Six-Sigma Process D – Define M – Measure A – Analyze I – Improve C - Control

28. ISO 9000:2000 • Third party audit and certification effort • Emphasis on process control and continuous improvement • Increases confidence that a task was done as promised

29. ISO 9000:2000 Structure • Addresses 21 processes in the total Quality Management System (QMS) • System requirements – development and documentation • Management requirements – policies, objectives, responsibilities • Resource requirements – personnel, infrastructure, work environment • Realization requirements – plan, source, make, deliver • Remedial requirements – measurement, nonconformance

30. Malcolm Baldridge Quality Award Program Points 1.0 Leadership (org. system, public responsibility) 120 2.0 Strategic Planning (development, deployment) 85 3.0 Customer & Market Focus (knowledge, relationships) 85 4.0 Information & Analysis (measurement, info mgmt) 90 5.0 Human Resource Focus (work systems, employee, 85 development, well-being and satisfaction) 6.0 Process Management (products/services, business & 85 support processes) 7.0 Business Results (customer sat, financial/market, 450 operational effectiveness)

31. Customer and Market Focused Strategy and Action Plans 5. Human Resource Focus 2. Strategic Planning 1. Leadership 7. Business Results 3. Customer and Market Focus 6. Process Management 4. Information and Analysis NIST, 1998 Baldrige Criteria for Performance Excellence Framework A Systems Perspective

32. ISO 9000 vs.us Malcolm Baldrige • ISO 9000 is international while the Malcolm Baldrige National Quality Award is targeted primarily to American firms. • ISO 9000 is a minimum standard, while the MBNQA is a "stretch" goal. • ISO 9000 is focused on processes and procedures. The MBNQA is far more comprehensive in the scope of topics covered. • ISO 9000 is internally oriented and does not address the relationship between quality and strategic planning in any depth. The MBNQA assesses effects on firm performance and customer satisfaction.

33. ISO 14000 - TQEM • International standard for certification of a firm’s environmental management system (EMS) addressing: • Environmental policy • Planning • Implementation and operation • Checking and corrective action • Management review