TOTAL QUALITY MANAGEMENT

Title:
ASSIGNMENT NO. 1

Submitted by:
CABARLES, BRYAN
Submitted to:

ENGR. GUILLERMO O. BERNABE

Instructor
1. Define Total Quality?
- Total quality management (TQM) is the continual process of detecting
and reducing or eliminating errors in manufacturing, streamlining supply
chain management, improving the customer experience, and ensuring
that employees are up to speed with training. Total quality management
aims to hold all parties involved in the production process accountable
for the overall quality of the final product or service.

2. Define Quality?
- In business, engineering, and manufacturing, quality has a pragmatic
interpretation as the non-inferiority or superiority of something; it's also
defined as being suitable for its intended purpose (fitness for purpose)
while satisfying customer expectations. Quality is a perceptual,
conditional, and somewhat subjective attribute and may be understood
differently by different people. Consumers may focus on the
specification quality of a product/service, or how it compares to
competitors in the marketplace. Producers might measure the
conformance quality, or degree to which the product/service was
produced correctly. Support personnel may measure quality in the
degree that a product is reliable, maintainable, or sustainable.

3. What are the Dimensions of Quality?

- Dimension 1: Performance
Does the product or service do what it is supposed to do, within its
defined tolerances?
Performance is often a source of contention between customers and
suppliers, particularly when deliverables are not adequately defined
within specifications.
The performance of a product often influences profitability or
reputation of the end-user. As such, many contracts or specifications
include damages related to inadequate performance.

- Dimension 2: Features
Does the product or services possess all of the features specified, or
required for its intended purpose?
 While this dimension may seem obvious, performance specifications
rarely define the features required in a product. Thus, it’s important that
suppliers designing product or services from performance specifications
are familiar with its intended uses, and maintain close relationships with
the end-users.

- Dimension 3: Reliability
Will the product consistently perform within specifications?
Reliability may be closely related to performance. For instance, a
product specification may define parameters for up-time, or acceptable
failure rates.
Reliability is a major contributor to brand or company image, and is
considered a fundamental dimension of quality by most end-users.

- Dimension 4: Conformance
Does the product or service conform to the specification?
If it’s developed based on a performance specification, does it perform
as specified? If it’s developed based on a design specification, does it
possess all of the features defined?

- Dimension 5: Durability
How long will the product perform or last, and under what
conditions?
Durability is closely related to warranty. Requirements for product
durability are often included within procurement contracts and
specifications.
For instance, fighter aircraft procured to operate from aircraft
carriers include design criteria intended to improve their durability in
the demanding naval environment.

- Dimension 6: Serviceability
Is the product relatively easy to maintain and repair?
As end users become more focused on Total Cost of Ownership than
simple procurement costs, serviceability (as well as reliability) is
becoming an increasingly important dimension of quality and criteria for
product selection.
 - Dimension 7: Aesthetics
The way a product looks is important to end-users. The aesthetic
properties of a product contribute to a company’s or brand’s identity.
Faults or defects in a product that diminish its aesthetic properties, even
those that do not reduce or alter other dimensions of quality, are often
cause for rejection.

- Dimension 8: Perception
Perception is reality. The product or service may possess adequate or
even superior dimensions of quality, but still fall victim to negative
customer or public perceptions.
As an example, a high quality product may get the reputation for
being low quality based on poor service by installation or field
technicians. If the product is not installed or maintained properly, and
fails as a result, the failure is often associated with the product’s quality
rather than the quality of the service it receives.

4. Give the Basic Concepts of TQM?

- Continuous Improvement of Quality:
Fundamental to all TQM systems is improving the quality of the
products and services provided by an organization. Such quality
improvement results in greater productivity and enhances the ability of
an organization to remain vital, employ people, and serve customers. A
focus on continuous quality improvement helps an organization do
things right.

- Central Focus on the Customer:

Also central to all TQM is a focus on the customer, the internal and
external recipients of an organization’s products. Their needs and
desires define quality for the producer whose job it is to meet or exceed
the customer’s needs and expectations. A focus on customers helps an
organization to do the right things.

- Systematic Improvement of Operations:

All work occurs in processes that begin and end somewhere. These
work processes account for 80- 85 percent of the quality of work and
 productivity of employees. Management is responsible for systems
within an organization; therefore, managers, not employees, must
shoulder blame when something goes wrong with the system.
TQM calls for studying work processes quantitatively, using
individuals or teams, to find places that breakdowns or unnecessary
complexities occur in processes, and then to identify solutions that
prevent them in the future. Study of work processes helps to reduce
costs while ensuring that quality is built into a service or product since
quality cannot be inspected into it at the end of the processes.

- Open Work Environments:

Continuous quality improvement requires an atmosphere for
innovation where suggestions for improvement are solicited and
respected and where supervisors and managers are open to
disagreement, conflict, and challenge. Activities for the improvement of
work processes, especially when teams are involved, help to break down
barriers that occur between departments or between supervisors and
those supervised.

- Long- Term Thinking:

TQM is also characterized by long- term thinking which helps mold
the future by understanding the consequences of current actions. Such
thinking requires decision making that is based on data, both hard and
soft, and related to real problems, not symptoms. It requires time. It
shies away from quick fixes arrived at by discussion and intuition. Long-
term thinking works best in organizations where managers plan to stay,
and thus have a stake in the consequences of their decisions.

- Development of Human Resources:

Organizations that follow TQM principles are organized to help
people do their jobs; they are seriously committed to employee learning
and development. Such development begins with a thorough
orientation to the organization, including its mission, values, and
information about where the job fits into the organization. It involves
educating people to perform to the quality standards of a specific job
before requiring them to work independently.
 TQM expects managers to respect the ability of well-trained
employees to know the work they do better than anyone, and
therefore, to be the best at improving it. Human resource development
includes providing the training to learn the communication,
quantitative, and team- participation skills required in an open, quality
improvement work environment. Development programs provide
extensive education to help individuals keep up- to- date on their jobs
and to prepare themselves for new responsibilities.

- Management Responsibility for TQM Leadership:

Managers need to lead the transformation of the organization to the
new culture of continuous quality improvement. They must accept
personal responsibility for continuous quality improvement and be
dedicated to empowering others in the organization to accept personal
responsibility for it, too. This approach taps the collective genius of the
organization to identify and solve problems. The leader’s focus is on
policy, structure, and systems to sustain continuous quality
improvement. Within this context, quality is the first among equals of
the organization’s functions. Quality is at the top of the agenda for every
meeting, every communication. The leader’s goal is to help people,
things, and machines do a better job; the leader’s role is that of
facilitator, catalyst, and coach.

5. Give the Principles of TQM?

- Focus on customer
When using total quality management it is of crucial importance to
remember that only customers determine the level of quality. Whatever
efforts are made with respect to training employees or improving
processes, only customers determine, for example through evaluation
or satisfaction measurement, whether your efforts have contributed to
the continuous improvement of product quality and services.

- Employee involvement
Employees are an organization’s internal customers. Employee
involvement in the development of products or services of an
organization largely determines the quality of these products or
 services. Ensure that you have created a culture in which employees feel
they are involved with the organization and its products and services.

- Process Centered
Process thinking and process handling are a fundamental part of total
quality management. Processes are the guiding principle and people
support these processes based on basis objectives that are linked to the
mission, vision and strategy.

- Integrated System
Following principle Process centered, it is important to have an
integrated organization system that can be modelled for example ISO
9000 or a company quality system for the understanding and handling of
the quality of the products or services of an organization.

- Strategic and systematic approach

A strategic plan must embrace the integration and quality
development and the development or services of an organization.

- Decision-making based on facts

Decision-making within the organization must only be based on facts
and not on opinions (emotions and personal interests). Data should
support this decision-making process.

- Communication
A communication strategy must be formulated in such a way that it is
in line with the mission, vision and objectives of the organization. This
strategy comprises the stakeholders, the level within the organization,
the communications channels, the measurability of effectiveness,
timeliness, etc.

- Continuous improvement
By using the right measuring tools and innovative and creative
thinking, continuous improvement proposals will be initiated and
implemented so that the organization can develop into a higher level of
quality.
6. Give the Obstacles Associated with TQM Implementations?
- Lack of management commitment;
- Weak comprehension of quality management;
- Inability to change organizational cultures;
- Lack of accuracy in quality planning;
- Absence of continuous training and education;
- Insufficient resources.

7. Give the Analysis Techniques for Quality Cost?

- The Tendency analysis
The tendency analysis implies the simple comparison between the
level of the costs from the present and from the past. It suggests that at
least a year should pass before a comparison is made and any
conclusions are drawn from the information. The trend analysis gives us
information for long term predictions. It also gives information regarding
the enforcing and implementation of the improvement of quality
programs. The information from this type of analysis comes from
monthly reports and from the detailed transactions that make the
elements. The tendency analysis can be made from cost categories and
subcategories, on products, on the measurement scale, on the
corporation’s plans, departments, etc. The time steps on the charts of
temporal series are the month, the trimester and the year, depending
on the purpose at hand.

- The Pareto Analysis

The Pareto analysis is one of the most efficient analyses. The
elements are showed in descending order, beginning with the biggest
from the left. A Pareto diagram has few elements that represent a
substantial quantity from the total, these elements are localized in the
left side of the diagram and are called few and vital. The Pareto
diagrams also have many elements that represent a small part of the
total and localized to the right side of the diagram and are called the
many and the useful. The Pareto diagrams can be set for quality costs
guaranteed by the operator, the cars, the department, the production
line, the categories, etc.
8. Define Quality Costs?
- Quality costs are the costs associated with preventing, detecting, and
remediating product issues related to quality. Quality costs do not
involve simply upgrading the perceived value of a product to a higher
standard. Instead, quality involves creating and delivering a product that
meets the expectations of a customer. Thus, if a customer spends very
little for an automobile, he will not expect leather seats and air
conditioning - but he will expect the vehicle to run properly. In this case,
quality is considered to be a vehicle that functions, rather than a luxury
experience.

9. Give the Primary Categories of Quality Cost?

- Prevention costs
You incur a prevention cost in order to keep a quality problem from
occurring. It is the least expensive type of quality cost, and so is highly
recommended. Prevention costs can include proper employee training
in assembling products and statistical process control (for spotting
processes that are beginning to generate defective goods), as well as a
robust product design and supplier certification. A focus on prevention
tends to reduce preventable scrap costs, because the scrap never
occurs.

- Appraisal costs
As was the case with a prevention cost, you incur an appraisal cost in
order to keep a quality problem from occurring. This is done through a
variety of inspections. The least expensive is having production workers
inspect both incoming and outgoing parts to and from their
workstations, which catches problems faster than other types of
inspection. Other appraisal costs include the destruction of goods as
part of the testing process, the depreciation of test equipment, and
supervision of the testing staff.

- Internal failure costs

An internal failure cost is incurred when a defective product is
produced. This appears in the form of scrapped or reworked goods. The
cost of reworking goods is part of this cost.
 - External failure costs
You also incur an external failure cost when a defective product was
produced, but now the cost is much more extensive, because it includes
the cost of product recalls, warranty claims, field service, and potentially
even the legal costs associated with customer lawsuits. It also includes a
relatively unquantifiable cost, which is the cost of losing customers.

10. Give the Typical Cost Bases?

- Assets acquired by purchase or contract: For assets purchased or
acquired contractually, the basis equals the purchase price.

- Assets acquired by gift or trust: The general rule is that assets acquired
by gift or trust receive transferred basis (also called carryover basis). Put
simply, gifted assets retain the donor's basis. This means that the value
of the asset at the time of transfer is irrelevant to computing the
donee's new basis. The general rule does not apply, however, if at the
time of transfer the donor's adjusted basis in the property exceeds its
fair market value and the recipient disposes of the property at a loss. In
this situation the asset's basis is its fair market value at the time of
transfer.

- Assets acquired by inheritance: Assets acquired by inheritance are

eligible to receive stepped-up basis, meaning the fair market value of
the asset at the time of the decedent's death. This provision shields the
appreciation in value of the asset during the life of the decedent from
any income taxation whatsoever.

- Adjusted basis: An asset's basis can increase or decrease depending on

changes that occur throughout its lifetime. For this reason, provides that
computing gain requires determining the amount realized from the sale
or disposition of property minus the adjusted basis. Capital
improvements (such as adding a deck to your house) increase the asset's
basis while depreciation deductions (statutory deductions that reduce
the taxpayer's taxable income for a given year) diminish the asset's
basis. Another way of viewing adjusted basis is to think of the asset as a
savings account, with capital improvements representing deposits and
depreciation deductions representing withdrawals.
11. How will you determine the Optimum Cost?
- Calculate Your Annual Usage
Annual usage simply means how much of a product you expect to sell
in one year. You can consult previous years' sales records or, if you have
not yet sold the product for a full year, take the sales to-date and extend
them to get a projection. For example, if you have sold 100 units over
one month, you could project 1,200 units sold over one year.

- Calculate Your Setup Cost

Your setup cost is the one-off cost incurred each time you order
goods. Setup costs comprise mainly of administrative costs. For
example, if you employ someone to process purchase orders, include
the amount you pay them each time to process one order. The same
applies to invoice processing. Do not include any costs that vary
depending on the size of the order. For example, do not include the
amount you pay someone to stack the goods in your stockroom. Once
you have collected all the individual costs, add them to together to get
your total setup cost.

- Calculate Your Annual Holding Cost Per Unit

Your total annual holding cost is the amount it costs you to keep the
stock for one year. The main component of your holding cost will be the
amount you pay to rent and operate storage space. The only instance in
which you should not include these storage space costs is if you already
have unused space available. If a space is currently unused, it does not
cost you any extra to fill that space. If you have taken a loan out to buy
the stock, include the interest you pay on the loan. Also include any
insurance premiums you pay on the stock. Add all these costs together
and divide the answer by your annual usage to get your annual holding
cost per unit. For example, imagine you sell 125 basketballs per year,
your storage space costs $2000 per year, you pay $100 interest per year
and a $50 annual insurance premium. Your total holding cost is $2,150
and your annual holding cost per unit is $17.20.
 - Calculate Your Optimal Order Quantity
The formula you need to calculate optimal order quantity is: [2 *
(Annual Usage in Units * Setup Cost) / Annual Carrying Cost per
Unit]^(1/2). Substitute each input with your own figures. For example,
imagine your business sells 125 basketballs per year, your total setup
costs are $10 and your annual holding cost per unit is $17.2. The
equation would be: [2 * (125 * 10) / 17.2] ^ (1/2). Using this example,
your optimal order quantity for basketballs is 12.06, for an optimal order
quantity of 12 basketballs.

- The Basic Assumptions

The optimal order quantity calculation makes six assumptions. The
first is demand for your product remains constant. The second and third
are the unit price of the good and the holding cost per unit remains the
same. The fourth and fifth are the setup cost remains constant and that
each order arrives instantly. The sixth is that there are no cost savings
associated with placing multiple orders at once -- for example, via
reduced delivery costs. In many cases these assumptions are unrealistic.
If your order and holding processes do not meet one or more of these
assumptions, you can compensate by holding safe stock, which is a small
amount of extra stock in addition to your optimal order quantity.

12. State the Quality Improvement Strategy?

- Break down barriers between departments
- Management should learn their responsibilities, and take on leadership
- Supervision should be to help people and machines and gadgets to do a
better job
- Improve constantly and forever the system of production and service
- Institute a vigorous program of education and self-improvement

13. Define Quality Planning?

- Systematic process that translates quality policy into measurable
objectives and requirements, and lays down a sequence of steps for
realizing them within a specified timeframe.

14. Give the Objectives of TQM?

- Decrease of mistakes in all operating areas,
 - Early mistake recognition,
- Mistake prevention as a preventive step,
- Avoidance of wastes,
- Reduction of the lead times,
- Increase of the flexibility and profitability,
- Better capture and conversion of the customer's needs,
- Contented position of the customers.

15. What is needed for a leader to be effective?

- Share Their Vision
A leader with vision has a clear idea of where they want to go, how
to get there and what success looks like. Be sure to articulate your vision
clearly and passionately, ensuring your team understands how their
individual efforts contribute to higher level goals. Personally working
toward your vision with persistence, tenacity, and enthusiasm will
inspire and encourage others to do the same.

- Lead By Example
As a leader, the best way to build credibility and gain the respect of
others is to set the right examples. Demonstrate the behavior that you
want people to follow. If you demand a lot of your team, you should also
be willing to set high standards for yourself. Aligning your words and
actions will help to build trust and make your team more willing to
follow your example.

- Demonstrate Integrity
A leader with integrity draws on their values to guide their decisions,
behavior, and dealings with others. They have clear convictions about
what is right and wrong and are respected for being genuine, principled,
ethical and consistent. They have a strong sense of character, keep their
promises, and communicate openly, honestly and directly with others.
Displaying integrity through your daily actions will see you rewarded
with loyalty, confidence, and respect from your employees.

- Communicate Effectively
The ability to communicate clearly, concisely and tactfully is a crucial
leadership skill. Communication involves more than just listening
 attentively to others and responding appropriately. It also includes
sharing valuable information, asking intelligent questions, soliciting
input and new ideas, clarifying misunderstandings, and being clear
about what you want. The best leaders also communicate to inspire and
energize their staff.

- Make Hard Decisions

To be an effective leader, the ability to make fast, difficult decisions
with limited information is critical. When facing a tough decision, start
by determining what you are trying to achieve. Consider the likely
consequences of your decision and any available alternatives. Make
your final decision with conviction, take responsibility for it and follow it
through. Being a resolute and confident decision-maker will allow you to
capitalize on opportunities and earn the respect of your team.

- Recognize Success
Frequently and consistently recognizing achievement is one of the
most powerful habits of inspiring leaders. For people to stretch
themselves and contribute their best efforts, they need to know their
work will be valued and appreciated. Find ways to celebrate the
achievements of your people, even if it’s through a simple ‘well done.’
As well as boosting morale, it will also strengthen their motivation to
continue giving their best.

- Empower Others
Great leaders understand that for people to give their best, they
must have a sense of ownership over their work and believe that what
they’re doing is meaningful. Communicate clear goals and deadlines to
your team, and then give them the autonomy and authority to decide
how the work gets done. Challenge them with high expectations and
encourage them to be creative and show innovation.

- Motivate and Inspire

The best leaders drive their team forward with passion, enthusiasm,
inspiration and motivation. Invest time in the people you lead to
determine their strengths, needs, and priorities. As well as making them
feel valuable, this will help you to understand the best way to motivate
 them. Continually reinforce how their efforts are making a difference,
and encourage the development of their potential with meaningful goals
and challenges.

16. What is the Important Role of Senior Management?

- Providing guidance to direct reports, typically comprising first-line
managers and supervisors
- Ensuring clarity around priorities and goals for the entire functional area
- Approving requests for investment to a certain level of authority
- Managing overall financial budgeting for her function
- Approving hiring and firing requests within her group
- Guiding the talent identification and development processes for a group
or function
- Working across functions with peers in other groups to ensure
collaboration for shared goals
- Interacting with senior management for reporting
- Working with senior management and other peers for strategy
development and execution planning
- Communicating financial and goal results and key performance
indicators to direct reports
- Facilitating goal-level creation for the broader function and working with
managers to ensure the goals cascade to all workers.