Total Quality Management

1. Total Quality Management Faculty: J.M.Pant Management Consultant, Trainer and Visiting Professor For any query, contact Mob: 9811030273; e-mail: jm.pant@gmail.com; jiten1@bol.net.in J.M.Pant, Faculty

2. Total Quality Management 1. Main concerns of Manufacturers and Customers • ManufacturerCustomer • Quality Quality • Cost Price • Productivity Availability • Concerns of manufacturer and customer are generally not the same. Customer usually • has no concern for company productivity and cost. • Quality is the only common concern J.M.Pant, Faculty

3. Total Quality Management 2. What is Total Quality Management (TQM) The elements of TQM as the name suggests are : Total Quality Management Total implies - Complete - 100% All areas and functions All activities All employees - everyone All time - always J.M.Pant, Faculty

4. Total Quality Management 3. Quality target is 100%, not even 99.9% because even 99.9% might mean many dissatisfied customers every year, defective components entering assembly, accidents etc. Quality definition Old view : Quality relates to products manufactured exactly to specifications. New view : Total Quality relates to products that totally satisfy our customer needs and expectations in every respect on a continuous basis. Quality then is to satisfy customer needs....it is in fact to delight customers. J.M.Pant, Faculty

5. Total Quality Management 4. Who is our customer The next person(individual or functional group) in the workplace; the receiver of output and the next to act on it. A customer may be either external or internal. Example :  Next in process customer Marketing Design Design Manufacturing Manufacturing Sales Machine Shop Assembly Assembly Testing Testing Despatch Sales Product user J.M.Pant, Faculty

6. Total Quality Management 5. Management implies :   Quality does not happen on its own. It requires to be planned and managed. It is a management function, though it involves everyone. Therefore it needs a systematic approach. TQM = Sum of TOTAL + QUALITY + MANAGEMENT J.M.Pant, Faculty

7. Total Quality Management 6. TOTAL QUALITY MANAGEMENT is a thought revolution in management where the entire business is operated with customer orientation in all activities all the time by every one in the organization. TQM is an integrated system and methodology throughout the organization that help to design, produce and service quality products or services which are most economical for their value, most useful and always satisfactory to the customer. J.M.Pant, Faculty

8. Total Quality Management • 7. Elements of TQM • 7.1 Top management commitment • Management responsibility • Support all TQM activities • Appointment of management representative • Customer feedback and complaints • Quality reviews • Shareholder delight • 7.2 Delight the customer • Customer satisfaction, customer delight • Internal customers • Customer focus, customer orientation J.M.Pant, Faculty

9. Total Quality Management • 7. Elements of TQM • 7.3 People based management • Total Employee Involvement • Employee delight • Team work • People make quality • Education and Training • Effective communication • Internal audits • Review of non conformities J.M.Pant, Faculty

10. Total Quality Management • 7. Elements of TQM • 7.4 Management by fact • Process orientation • Measurement, Observation, Experimentation • 7.5 Continuous improvement • Continuous improvement cycle (PDCA) • Kaizen • 5S • Prevention of repetitive occurrence J.M.Pant, Faculty

11. 1. Plan Identify problem and develop plan for improvement. 4. Act Institutionalize improvement; continue cycle. 3. Study/Check Assess plan; is it working? 2. Do Implement plan on a test basis. PDCA Cycle How to improve next time? What to do? How to do? Things as per plan? Do as planned J.M.Pant, Faculty

12. Problem Solving Cycle • PDCA for problem solving Definition of problem What Plan Analysis of Problem Why Identification Of causes How Planning Countermeasures Implementation Do Confirmation Of result Check Standardization Action J.M.Pant, Faculty

13. Total Quality Management • 7. Elements of TQM • 7.6 Appropriate technology • JIT • Automation • Fool proofing • TPM • 7.7 Statistical process control • 7.8 Problem solving tools/techniques including Seven QC tools • 7.9 Benchmarking J.M.Pant, Faculty

14. Total Quality Management • 7. Elements of TQM • 7.10 Quality Function deployment • Identify customer expectations • Derive measurable parameters • Set standards for these • 7.11 Monitor variability in parameters • 7.12 Move towards zero variability J.M.Pant, Faculty

15. Total Quality Management • 7. Elements of TQM • 7.13 Institute all pervasive system • ISO 9001:2000 • TS 16949 • ISO 14000 series, ISO 14001 • 7.14 Supplier Control • Approval of supplier for purchase • Technical support and vendor development • Supplier delight • Qualify suppliers and certify for direct line feed J.M.Pant, Faculty

16. Total Quality Management • 7. Elements of TQM • 7.15 Reduce cost of quality • Internal failure • External failure • Appraisal • Prevention • 7.16 Developing a quality culture • Change in mind set • Being proactive J.M.Pant, Faculty

17. % Sales 50 40 30 20 10 5 Operation Costs Material Costs Overhead Costs Gen. & Admin. Costs Defect Reports Labor Hours Recode/Redesign Customer Complaints Cost of uality Measurement of a Company’s Health Financial Data Percentage of Sales Dollar • Factory Data J.M.Pant, Faculty

18. Bugs Returned Goods Recode Defects Warranty Interface Errors Costs Product Liability Quotation Errors Missed Deadlines Configuration Errors Complaint Handling Help Desk Training Bad Market Reviews Field Service Process Slowdown Poor Documentation Lost Market Share Software Patches Cost of uality Iceberg J.M.Pant, Faculty

19. Is Cost related to YES PREVENTION Prevention of Non- Conformance ? NO Is Cost related to YES APPRAISAL Evaluating the Conformance ? NO INTERNAL FAILURE Is Non-Conformance Is Cost related to found prior to YES YES Non-conformance ? Shipment ? NO NO Not a Quality Cost EXTERNAL FAILURE Cost of uality Element Decision Flow J.M.Pant, Faculty

20. Cost of uality Examples of Elements • PREVENTIONDesign Quality Progress ReviewsRequirements DocumentationQA TrainingProcess Engineering • üINTERNAL FAILURERecode/Repair LaborDefect Tracking & ReportsRequirement ChangesDown Equipments • APPRAISALUnit Testing Regression Testing Automated Test Tools User Interface Reviews • EXTERNAL FAILUREReturned Goods Liability Costs Help Desk Lost Sales/Market Share J.M.Pant, Faculty

21. Strategy Premise Cost of uality • The Strategy is based on the premise that: • For each failure there is a root cause. • Causes are preventable. • Prevention is always cheaper. J.M.Pant, Faculty

22. Appraisal Prevention Internal Failures External Failures Cost of uality Total Sales Cost of Quality% TOTAL SALES C O Q (Rs.Rs.Rs.) J.M.Pant, Faculty

23. OPTIMAL POINT TOTAL COST COST OF QUALITYOPTIMUM QUALITY COST MODEL COST/ GOOD UNIT FAILURE COSTS PREVENTION & APPRAISAL COSTS 0 100 % GOOD J.M.Pant, Faculty

24. Target Specification Example • A study found U.S. consumers preferred Sony TV’s made in Japan to those made in the U.S. Both factories used the same designs & specifications. The difference in quality goals made the difference in consumer preferences. Japanese factory (Target-oriented) U.S. factory (Conformance-oriented) J.M.Pant, Faculty

25. Benchmarking • How do today's business leaders sustain their competitive edge? • By staying abreast of the latest, best practices and learning to apply them to every aspect of their organization. • Whether you work in accounts payable, travel & entertainment, planning & budgeting, inventory management or payroll, learning about, customizing and implementing the best practices is the surest way to enhance the efficiency and effectiveness of your work. J.M.Pant, Faculty

26. Benchmarking • Benchmarking concept What are others’ Performance levels? How did they get there? What is our Performance level? How do we do it? Creative Adaptation Breakthrough Performance J.M.Pant, Faculty

27. Benchmarking • Implicit in benchmarking are two key elements: • Measuring performance in numerical terms (metrics). Requires some sort of units of measure. • The numbers achieved by the best in class benchmark are the target. • Organization seeking improvement plots its own performance against the target. • Think of measures of performance in your manufacturing unit? service unit? For HR processes? J.M.Pant, Faculty

28. Benchmarking • Benchmarking requires that managers understand why their performance differs. • Bench markers must develop a thorough and in-depth knowledge of both their own processes and the processes of the best-in-class organization. • An understanding of the differences allows the managers to organize their improvement efforts to meet the goal. • Benchmarking is about setting goals and about meeting them by improving processes. J.M.Pant, Faculty

29. Benchmarking Process • Decide what to benchmark • Understand current performance • Plan • Study others • Learn from the data • Use the findings J.M.Pant, Faculty

30. Benchmarking Process • Decide what to benchmark • Think about thecritical success factorsand themission. • Which processes are causing the most trouble? • Which processes contribute most to customer satisfaction and which are not performing up to expectations? • What are the competitive pressures impacting the organization the most? • What processes have the most potential for differentiating our organization from the competition? J.M.Pant, Faculty

31. STANDING IN THE MARKETPLACE • <Example>Rating for each attribute and weighted rating to be entered in the cells for company X and the competitors J.M.Pant, Faculty

32. STANDING IN THE MARKETPLACE • <Example>For a service unit J.M.Pant, Faculty

33. STANDING IN THE MARKETPLACE • <Example>automobile manufacturer experiencing a drop in market share J.M.Pant, Faculty

34. Types Of Benchmarking • Internal • Comparison within the organization of similar activities. • Data easy to obtain • Competitive • Organization’s survival depends on its performance relative to competition • Through surveys, reports, customers, suppliers, buying customers product to take apart and test. J.M.Pant, Faculty

35. Types Of Benchmarking • Process. • Many processes are common across industry boundaries, and innovations from other types of organizations can be applied across industries. • It is relatively easy to find organizations with world class operations through published information, suppliers and consultants. • For example, processes of payroll and accounts receivable, order processing, design, logistics etc.. J.M.Pant, Faculty

36. Types Of Benchmarking • Process. • <Examples> • Southwest Airlines benchmarked turnaround time with auto racing pit crews. • Motorola looked to Domino’s Pizza and Federal Express for the best ways to speed up delivery systems. J.M.Pant, Faculty

37. Benchmarking Process • Identifying the best firms to benchmark • There is no existing magic list of best-in-class companies. • Hierarchy of best practices J.M.Pant, Faculty

38. Benchmarking Process • Studying Others • Information available internally • Public information • Questionnaires • Site visits • Focus groups • Panels of benchmarking partners brought together to discuss areas of mutual interest.(customers, suppliers, members of professional organizations, people with previous benchmarking activity experience, consultants). J.M.Pant, Faculty

39. Benchmarking Process • Learning from the data • Is there a gap between the organization’s performance and the performance of the best-in-class organizations? • What is the gap? How much is it? • Why is there a gap? What does the best-in-class do differently that is better? • If best-in-class practices were adopted, what would be the resulting improvement? J.M.Pant, Faculty

40. Benchmarking Process • Using the findings • Two groups must agree on the change • The process owners-people who will run the process • Top management-who will enable the process and provide the necessary resources • If best-in-class practices were adopted, what would be the resulting improvement? • Current practices can’t change the best-in-class results but changing the process can. J.M.Pant, Faculty

41. Benchmarking Process • Using the findings • When acceptance is gained, new goals based on the benchmark findings are set. • The generic steps for the development and execution of action plans are: • Specify tasks • Sequence tasks • Determine resource needs • Establish task schedule • Assign responsibility for each task • Describe expected results • Specify methods for monitoring results J.M.Pant, Faculty

42. Quality Function Deployment • Dr Mizuno of Tokyo Institute of Technology is credited with initiating the QFD system. • First application of QFD was at Mitsubishi Heavy Industries in Kobe shipyard in 1972. • After 4 years implemented by Toyota in production of mini-vans. • QFD introduced in U.S in 1984 by Dr Clausing of Xerox. J.M.Pant, Faculty

43. Quality Function Deployment • Benefits of QFD: • Improves customer satisfaction • Defines requirements in a set of basic needs and compares it to all competitive information. • Management can then place resources where they will be the most beneficial in improving quality. • Reduces implementation time • Fewer engineering changes needed • Critical to quality issues are identified and monitored from product inception to production. J.M.Pant, Faculty

44. Quality Function Deployment • Benefits of QFD: • Promotes team work • Horizontal deployment of communication channels • Avoids misinterpretation, opinions and miscues. • Provides documentation • Database for future design or process improvements is created. • Serves as a training tool for new engineers. J.M.Pant, Faculty

45. Quality Function Deployment • QFD is a planning tool used to fulfill customer expectations. • Focuses on Voice of the customer. • Market research attempts to capture the voice of customer but they sometimes conflict, and lack clarity. • This is where voice of the customer gets lost and voice of the organization enters. J.M.Pant, Faculty

46. Quality Function Deployment • Voice of Customer Unsolicited Solicited Qualitative Quantitative Random Structured Trade visits Customer visits Consultants Focus groups Customer Complaint reports; lawsuits Customer surveys; market surveys; trade trials; customer audits; product purchase (buy back) survey Sales force; training programs; conventions; trade journals; suppliers; academic; employees J.M.Pant, Faculty

47. Quality Function Deployment • Voice of customer: • What does the customer really want? • What are the customer’s expectations? • Are the customer’s expectations used to drive the design process? • What can the design team do to achieve customer satisfaction? J.M.Pant, Faculty

48. Quality Function Deployment • Voice of customer: • Once the customer expectations and needs have been identified and researched, QFD team processes the information. • The Affinity diagram is ideally suited for most QFD applications. • QFD team: • Designing a new product • Improving an existing product J.M.Pant, Faculty

49. Quality Function Deployment • QFD team • Team members from Marketing, Design, Quality, Finance and Production. • For existing product, team may have fewer members. • Time commitment and inter team communication is a must. • Regular team meetings. • Team focus on quality management goal. J.M.Pant, Faculty

50. Quality Function Deployment • Affinity Diagram • Gathers large amount of data and organizes data into groupings based on their natural interrelationships. • Used when thoughts are too widely dispersed or numerous to organize • New solutions are needed • Steps • Phrase the objective • Record all responses • Group the responses • Organize groups in an affinity diagram J.M.Pant, Faculty