Introduction

What is quality?

 Dictionary has many definitions:

 Essential characteristic,
 Superior, etc.
 Some definitions that have gained wide acceptance
in various organizations:
 Quality is customer satisfaction,
 Quality is Fitness for Use.
 The American National Standards Institute (ANSI) and the American Society for
Quality (ASQ) define quality as:
 The totality of features and characteristics of a product or service that bears
on its ability to satisfy given needs.

What is TQM?

 A comprehensive, organization-wide effort to

improve the quality of products and services,
applicable to all departments.
What is a customer?

 Anyone who is impacted by the product or process

delivered by an organization.
 External customer:
 The end-user as well as intermediate processors.
 Other external customers may not be purchasers but may have some
connection with the product.
 Internal customer
 Other divisions of the company that receive the processed product.

What is a product?

 The output of the process carried out by an organization. It may be in form:

 goods (e.g. automobiles, missile), etc
 Software (e.g. a computer code, a report) or
 service (e.g. banking, insurance).

How is customer satisfaction achieved?

 Two dimensions:
 Product features and
 Freedom from deficiencies
 Product features Refers to the quality of design.
 Examples in manufacturing industry

Performance,
Reliability,
Durability, Ease of use,
Esthetics, etc
 Examples in service industry
 Accuracy,
 Timeliness,
 Friendliness and courtesy,
 Knowledge of server, etc.
 Freedom from deficiencies Refers to quality of
 Higher conformance means fewer complaints and
 increased customer satisfaction.

Why Quality?

 Reasons for quality becoming a cardinal priority for most organizations

 Competition: Today's market demand high quality products at low cost. Having high
quality reputation is not enough! Internal cost of
maintaining the reputation should be less.
 Changing customer:
 The new customer is not only commanding priority based on volume but, is
more demanding about the quality system.
 Changing product mix:
 The shift from low volume, high price to high volume, low price have resulted
in a need to reduce the internal cost of
poor quality.

 Product complexity:
 As systems have become more complex, the reliability requirements for
suppliers of components have become more
 Higher levels of customer satisfaction
 Higher customers’ expectations are getting spawned by increasing competition.
 Relatively simpler approaches to quality viz. product inspection for quality control
and incorporation of internal cost of poor quality
into the selling price, might not work for today’s complex market environment.

Quality perspectives

 Everyone defines Quality based on their own perspective of it. Typical responses
about the definition of quality would include:
  Perfection
 Consistency
 Eliminating waste
 Speed of delivery
 Compliance with policies and procedures
 Doing it right the first time
 Delighting or pleasing customers
 Total customer satisfaction and service
 Judgmental perspective
 goodness of a product.

 Shewharts transcendental definition of quality absolute and universally recognizable,

a mark of uncompromising standards and high achievement.
 Examples of products attributing to this image
 Rolex watches,
 Lexus cars.
 Product-based perspective
 function of a specific, measurable variable and
that differences in quality reflect differences
in quantity of some product attributes.
 Example Quality and price perceived relationship.

10. Quality perspectives

User-based perspective

 fitness for intended use.

 Individuals have different needs and wants, and
hence different quality standards.
 Example Nissan offering dud models in US
markets under the brand name Datson which the US
customer didn’t prefer.
 Value-based perspective
 quality product is the one that is as useful as
competing products and is sold at a lesser
 US auto market Incentives offered by the Big
Three are perceived to be compensation for lower

11. Quality perspectives

Manufacturing-based perspective

 the desirable outcome of an engineering and

manufacturing practice, or conformance to
 Engineering specifications are the key!
 Example Coca-cola quality is about
manufacturing a product that people can depend on
every time they reach for it.

Questions on Quality perspectives? (See Quiz 1)

12. Quality levels

 At organizational level, we need to ask following

questions:
 Which products and services meet your
expectations?
 Which products and services you need that you are
not currently receiving?
 At process level, we need to ask:
 What products and services are most important to
the external customer?
 What processes produce those products and
services?
 What are the key inputs to those processes?
 Which processes have most significant effects on
the organizations performance standards?

13. Quality levels

 At the individual job level, we should ask:

 What is required by the customer?
 How can the requirements be measured?
 What is the specific standard for each measure?

History of quality management

 To know the future, know the past!

 Before Industrial Revolution, skilled craftsmen
served both as manufacturers and inspectors,
building quality into their products through
their considerable pride in their workmanship.
 Industrial Revolution changed this basic concept
to interchangeable parts. Likes of Thomas
Jefferson and F. W. Taylor (scientific
management fame) emphasized on production
efficiency and decomposed jobs into smaller work
Holistic nature of manufacturing rejected!
 Statistical approaches to quality control started
at Western Electric with the separation of
inspection division. Pioneers like Walter
Shewhart, George Edwards, W. Edwards Deming and
Joseph M. Juran were all employees of Western
 After World War II, under General MacArthur's
Japan rebuilding plan, Deming and Juran went to
 Deming and Juran introduced statistical quality
control theory to Japanese industry.
 The difference between approaches to quality in
USA and Japan Deming and Juran were able to
convince the top managers the importance of

 Next 20 odd years, when top managers in USA

focused on marketing, production quantity and
financial performance, Japanese managers improved
quality at an unprecedented rate.
 Market started preferring Japanese products and
American companies suffered immensely.
 America woke up to the quality revolution in
early 1980s. Ford Motor Company consulted Dr.
Deming to help transform its operations.
 (By then, 80-year-old Deming was virtually
unknown in USA. Whereas Japanese government had
instituted The Deming Prize for Quality in 1950.)

 Managers started to realize that quality of

management is more important than management of
Birth of the term Total Quality
Management (TQM).
 TQM Integration of quality principles into
organizations management systems.
 Early 1990s Quality management principles
started finding their way in service industry.
FedEx, The Ritz-Carton Hotel Company were the
quality leaders.
 TQM recognized worldwide Countries like Korea,
India, Spain and Brazil are mounting efforts to
increase quality awareness.
19. Evolution of TQM philosophies

The Deming Philosophy

 Definition of quality, A product or a service

possesses quality if it helps somebody and enjoys
a good and sustainable market.
 Improve quality.
 Decrease cost because of less rework, fewer
 Productivity improves.
 Capture the market with better quality and
reduced cost.
 Stay in business.
 Long-term competitive strength
14 points for management

 Create and publish to all employees a statement

of the aims and purposes of the company. The
management must demonstrate their commitment to
this statement.
 Learn the new philosophy.
 Understand the purpose of inspection to reduce
the cost and improve the processes.
 End the practice of awarding business on the
basis of price tag alone.
 Improve constantly and forever the system of
production and service.
 Institute training
 Teach and institute leadership.
 Drive out fear. Create an environment of
 Optimize the team efforts towards the aims and
purposes of the company.
 Eliminate exhortations for the workforce.
 Eliminate numerical quotas for production.
 Remove the barriers that rob pride of
 Encourage learning and self-improvement.
 Take action to accomplish the transformation.

 A System of Profound Knowledge

 Appreciation for a system - A system is a set of
functions or activities within an organization
that work together to achieve organizational
Managements job is to optimize the
system. (not parts of system, but the whole!).
System requires co-operation.
 Psychology The designers and implementers of
decisions are people. Hence understanding their
psychology is important.

 Understanding process variation A production

process contains many sources of variation.
Reduction in variation improves quality. Two
types of variations- common causes and special
Focus on the special causes. Common
causes can be reduced only by change of
technology.
 Theory of knowledge Management decisions should
be driven by facts, data and justifiable
Don’t follow the management fads!

The Juran philosophy

 Pursue quality on two levels

 The mission of the firm as a whole is to achieve
high product quality.
 The mission of each individual department is to
achieve high production quality.
 Quality should be talked about in a language
senior management understands money (cost of
poor quality).
 At operational level, focus should be on
conformance to specifications through elimination
of defects- use of statistical methods.

Quality Trilogy

 Quality planning Process of preparing to meet

quality goals. Involves understanding customer
needs and developing product features.
 Quality control Process of meeting quality goals
during operations. Control parameters. Measuring
the deviation and taking action.
 Quality improvement Process for breaking through
to unprecedented levels of performance. Identify
areas of improvement and get the right people to
bring about the change.
The Crosby philosophy

 Absolutes of Management
 Quality means conformance to requirements not
 There is no such thing as quality problem.
 There is no such thing as economics of quality
it is always cheaper to do the job right the
first time.
 The only performance measurement is the cost of
quality the cost of non-conformance.
 Basic Elements of Improvement
 Determination (commitment by the top management)
 Education (of the employees towards Zero Defects
(ZD))
 Implementation (of the organizational processes
towards ZD)

27. TQM for Middle Management

 Process Management
 Statistical Process Control (SPC)

Process management

 Planning and administrating the activities

necessary to achieve high quality in business
processes and also identifying opportunities for
improving quality and operational performance
ultimately, customer satisfaction.
 Process simplification reduces opportunities for
errors and rework.
 Processes are of two types value-added
processes and support processes.
 Value-added processes those essential for
running the business and achieving and
maintaining competitive advantage. (Design
process, Production/Delivery process)
 Support processes Those that are important to
an organizations value-creation processes,
employees and daily operations.
 Value creation processes are driven by external
customer needs while support processes are driven
by internal needs.
 To apply the techniques of process management, a
process must be repeatable and measurable.
 Process owners are responsible for process
performance and should have authority to manage
the process. Owners could range from high-level
executive to workers who run a cell.
 Assigning owners ensures accountability.

Questions on Process management?

30. Process control

 Control is the activity of ensuring the

conformance to the requirements and taking
corrective action when necessary.
 Two reasons for controlling the process
 Process control methods are the basis of
effective daily management of processes.
 Long-term improvements cannot be made to a
process unless the process is first brought under
 Short-term corrective action should be taken by
the process owners. Long-term remedial action
should be the responsibility of the management.

 Effective quality control systems include

 Documented procedures for all key processes
 A clear understanding of the appropriate
equipment and working environment
 Methods of monitoring and controlling critical
quality characteristics
 Approval processes for equipment
 Criteria for workmanship written standards,
samples etc.
 Maintenance activities

33. Process improvement

 Customer loyalty is driven by delivered value.

 Delivered value is created by business processes.
 Sustained success in competitive markets require
a business to continuously improve delivered
 To continuously improve value creation ability, a
business must continuously improve its value
creation processes.
 Continuous process improvement is an old
management concept dating back to 1895. However,
those approaches were mainly productivity
 More recently (1951) Toyota implemented
Just-In-Time which relies on zero defects and
hence continuous improvement!

34. Process improvement Kaizen

 Japanese for gradual and orderly continuous

improvement over a long period of time with
minimum financial investment, and with
participation by everyone in the organization.
 Improvement in all areas of business serves to
enhance quality of the firm.
 Three things required for successful kaizen
program operating practices, total involvement,
and training.
 Operating practices expose opportunities for
JIT reveals waste and inefficiency
as well as poor quality.

 Every employee strives for improvement. Top

management views improvement as part of strategy
and supports it. Middle management can implement
top managements improvement goals by
establishing, maintaining, and upgrading
operating standards. Workers can engage through
suggestions, small group activity.
 Middle management can help create conducive
environment for improvement by improving
cooperation amongst departments, and by making
employees conscious of their responsibilities for
 Supervisors can direct their attention more on
improvement than supervision, which will
facilitate communication.
36. Kaizen Implementation

 The Deming cycle Originally developed by Walter

Shewart, but renamed in 1950s because Deming
promoted it extensively.

 Plan Study the current system identifying

problems testing theories of causes and
developing solutions.
 Do Plan is implemented on a trial basis. Data
collected and documented.
 Study Determine whether the trial plan is
working correctly by evaluating the results.
 Act Improvements are standardized and final
plan is implemented.
 Variation of PDSA cycle FADE Focus, Analyze,
Develop, Execute cycle!

 Jurans breakthrough sequence

 Proof of the need
 Project identification
 Organization for breakthrough two paths
identified symptom to cause (diagnostic) and
cause to remedy (remedial) paths.
 Diagnostic journey
 Remedial journey
 Holding the gains.

39. Process improvement tools

 Seven QC Tools
 Flow charts
 Check sheets
 Histograms
 Pareto diagrams
 Cause-and-effect diagrams
 Scatter diagrams
 Control charts

40. Flow charts

 Process map identifies the sequence of activities

or the flow in a process.
 Objectively provides a picture of the steps
needed to accomplish a task.
 Helps all employees understand how they fit into
the process and who are their suppliers and
 Can also pinpoint places where quality-related
measurements should be taken.
 Also called process mapping and analysis.
 Very successfully implemented in various
e.g. Motorola reduced
manufacturing time for pagers using flow charts.

41. Check sheets

 Special types of data collection forms in which

the results may be interpreted on the form
directly without additional processing.
 Data sheets use simple columnar or tabular forms
to record data. However, to generate useful
information from raw data, further processing
generally is necessary.
 Additionally, including information such as
specification limits makes the number of
nonconforming items easily observable and
provides an immediate indication of the quality
of the process.

Questions on Check sheets?

42. Pareto diagrams

 Based on the 85-15 Pareto distribution.

 Helpful in identifying the quality focus areas.
 Popularized by Juran.
 It is a histogram of the data from the largest
frequency to the smallest.

44. Cause-effect diagrams

 Also called fishbone diagrams (because of their

shape) or Ishikawa diagrams.
 Helps in identifying root causes of the quality
(Helps in the diagnostic journey.)
45. Scatter diagrams

 Graphical components of the regression analysis.

 Often used to point out relationship between
Statistical correlation analysis used
to interpret scatter diagrams.

46. Run chart Measurement against progression of

 Control chart Add Upper Control Limit and Lower

Control Limit to the run chart.

47. TQM for the Workforce

 Kaizen teams
 Quality Circles

Quality circles

 Teams of workers and supervisors that meet

regularly to address work-related problems
involving quality and productivity.
 Developed by Kaoru Ishikawa at University of
 Became immediately popular in Japan as well as
 Lockheed Missiles and Space Division was the
leader in implementing Quality circles in USA in
1973 (after their visit to Japan to study the
same).
 Typically small day-to-day problems are given to
quality circles. Since workers are most familiar
with the routine tasks, they are asked to
identify, analyze and solve quality problems in
the routine processes.

49. Additional process improvement tools

 Kaizen blitz
 An intense and rapid improvement process in which
a team or a department throws all its resources
into an improvement project over a short period
of time.
 Short time burst rather than long range simmer-
hence the name.
 Blitz teams usually comprise of employees from
all areas involved in the process who understand
it and can implement the changes on the spot.
50. Additional process improvement tools

 Poka-Yoke (Mistake proofing)

 Approach for mistake-proofing processes using
automatic devises or methods to avoid simple
human error.
 Developed and refined in the 1960s by the late
Shigeo Shingo, a Japanese manufacturing engineer
who developed the Toyota production system.
 Focused on two aspects
 Prediction Recognizing that a defect is about
to occur and provide a warning.
 Detection Recognizing that a defect has
occurred and stop the process.

51. Quality Management Awards and Framework

 ISO 9000 2000

 Malcolm Baldrige National Quality Award
 Deming Prize
 Six Sigma

ISO 9000 2000

 Created by International Organization for

Standardization (IOS) which was created in 1946
to standardize quality requirement within the
European market.
 IOS initially composed of representatives from 91
countries probably most wide base for quality
 Adopted a series of written quality standards in
1987 (first revised in 1994, and more recently
(and significantly) in 2000).
 Prefix ISO in the name refers to the scientific
term iso for equal. Thus, certified
organizations are assured to have quality equal
to their peers.

 Defines quality systems standards based on the

premise that certain generic characteristics of
management principles can be standardized.
 And that a well-designed, well-implemented and
well managed quality system provides confidence
that outputs will meet customer expectations and
 Standards are recognized by 100 countries
including Japan and USA.
 Intended to apply to all types of businesses.
(Recently, B2B firm bestroute.com became the
first e-commerce company to get ISO)

 Created to meet five objectives

 Achieve, maintain, and seek to continuously
improve product quality in relation to the
 Improve the quality of operations to continually
meet customers and stakeholders needs.
 Provide confidence to internal management that
quality requirements are being met.
 Provide confidence to the customers that quality
requirements are being met.
 Provide confidence that quality system
requirements are fulfilled.

ISO 9000 2000 structure

 Consists of three documents

 ISO 9000 Fundamentals and vocabulary.
 ISO 9001 Requirements.
 Organized in four sections Management
Responsibility Resource Management Product
Realization and Measurement, Analysis and
 ISO 9004 Guidelines for performance

2000 Quality Management Principles

 Principle 1 Customer Focus

 Principle 2 Leadership
 Principle 3 Involvement of people
 Principle 4 Process approach
 Principle 5 Systems approach for management
 Principle 6 Continual improvement
 Principle 7 Factual approach to decision making
 Principle 8 Mutually beneficial supplier relationships.

ISO 9000 2000 registration

 Originally intended to be a two-party process

where the supplier is audited by its customers,
the ISO 9000 process became a third-party
accreditation process.
 Independent laboratory or a certification agency
conducts the audit.
 Recertification is required every three years.
 Individual sites not entire company must
achieve registration individually.
 All costs are to be borne by the applicant.
 A registration audit may cost anywhere from
10,000 to 40,000.
 (more information at http//www.iso.ch)

58. Six Sigma

 Business improvement approach that seeks to find

and eliminate causes of defects and errors in
processes by focusing on outputs that are
critical to customers.
 The term Six Sigma is based on a statistical
measure that equates 3.4 or fewer errors or
defects per million opportunities.
 Motorola pioneered the concept of Six Sigma.
 The late Bill Smith, a reliability engineer is
credited with conceiving the idea of Six Sigma.
 GE (specifically CEO Jack Welch) extensively
promoted it.

 Core philosophy based on key concepts

 Think in terms of key business processes and
customer requirements with focus on strategic objectives.
 Focus on corporate sponsors responsible for
championing projects.
 Emphasize quantifiable measures such as defects
per million opportunities (dpmo).
 Ensure appropriate metrics is identified to
maintain accountability.
 Provide extensive training.
 Create highly qualified process improvement experts -belts.
 Set stretch objectives for improvement.

 Contrasts between traditional TQM and Six Sigma (SS) -

 TQM is based largely on worker empowerment and
teams SS is owned by business leader champions.
 TQM is process based SS projects are truly cross-functional.
 TQM training is generally limited to simple
improvements tools and concepts SS is more
rigorous with advanced statistical methods.
 TQM has little emphasis on financial
accountability SS requires verifiable return on
investment and focus on bottom line.
61. TQM for Top Management

 Strategic Quality Management (SQM)

 Competitive Advantage

SQM Hoshin planning

 Hoshin kanri Japanese for management cycle build

around Plan, Do, Check, Act. Elements of this
cycle include
 Quality policies
 Quality goals
 Deployment of goals
 Plans to meet goals
 Organizational structure
 Resources
 Measurement feedback
 Review of progress
 Training

63. SQM Vision/Mission statement

 Developed by taking everyone in confidence. Guide

for the Quality journey. Ties quality to overall
business goals.
 Vision Statement Collection of quality policies.
A vision statement outlines what a company wants
to be. It focuses on tomorrow it is
inspirational it provides clear decision-making
criteria and it is timeless. A vision needs to
address three areas people, culture (or values)
and product or service.
 Mission statement A mission statement outlines
what the company is now. It focuses on today it
identifies the customers it identifies the
critical processes and it states the level of

 It has been said that a vision is something to be

pursued, while a mission is something to be
 Mission is what you do best every day, and vision
is what the future looks like because you do that
mission so exceedingly well.
 For vision Think leading with inspiration and
courage, obsessed with future possibility.
 For mission Think managing with greatness and
untamed strength, improving everything daily.
 Famous vision statement By the end of the
decade, we will put a man on the moon. JFK.
 Famous mission statement CRUSH REEBOK. Nike

65. SQM Quality policies

 Prepared to provide guidelines for planning the

overall quality program and defining the action
to be taken in situation for which personnel had
requested guidelines.
 Policies state a) a principle to be followed b)
what is to be done.
 Examples of quality policy For a computer
manufacturer In selecting suppliers, decision
makers are responsible for choosing the best
source even if this means internal sources are
not selected.

66. SQM Quality goals

 A goal (or objective) is a statement of the

desired result to be achieved within a specified
period an aimed-at target.
 These goals then become basis for detailed
planning of activities.
 Tactical goals are short range (up to 1 year),
whereas strategic goals are long range (say, 5
years).
 Examples of corporate quality goals For a
health product company, the quality goals over
the next year could be The average leakage rate
for . product shall be reduced to
 Note that quality goal statements include
quantified data.
 Typically Pareto analysis is used to develop the
quality goals.

Questions on Components of ISO, Six Sigma, and SQM?

SQM Deploying quality goals

 Broad goals dont lead to results. First they

have to be deployed as follows
 Division and subdivision of the goal until
specific deeds to be done are identified.
 Allocation of responsibility of doing these
 Provision for the needed resource.

SQM Caveats

 Reasons of failure of SQM could be

 Lack of leadership by upper management.
 Lack of infrastructure for quality.
 Failure to understand the skepticism about the
new quality program.
 Management assumption that the exhortation
approach will work.
 Failure to start small and learn from pilot
 Reliance on specific techniques as the primary
 Underestimating the time and resource required.