Total Quality Management

Note: Slides presented in this chapter are based in part on slides prepared by
Wiley Education Canada to support the textbook chosen in this course

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 • What is the current challenge for organizations?

– To produce quality products or services efficiently.

• Total quality management is defined as managing the

entire organization so that it excels on all dimensions of
products and services that are important to the customer

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• TQM stresses 4 principles:

– customer satisfaction

– Quality leadership from senior management

– employee involvement

– continuous improvements in quality

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Dimensions of Quality

 Performance
 Reliability
 Durability
 Serviceability
 Aesthetics
 Features
 Perceived Quality
 Conformance to Standards
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• Value:

– How would you define value?

• How well an output serves its intended purpose at price customers

willing to pay.

• Value of output to customer depends on their expectations before

purchasing it.

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• Support:

– What effect can output support have?

• Often output support provided by organization as important

to customers as quality of output itself.

• Good output support can reduce consequences of quality failures in

other areas.

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The Costs of Poor Quality

 Prevention Costs

 Appraisal Costs

 Internal Failure Costs

 External Failure Costs

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Prevention Costs:
• What would be associated with this type of cost?

– Costs associated with preventing occurrence of defects:

• Costs of redesigning process to remove causes of poor quality

• Redesigning product to make it simpler to produce

• Training employees in methods of continuous improvement

• Working with suppliers to increase quality of purchased items or

contracted services

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Appraisal Costs:

• What is associated with this type of cost?

– Costs incurred in assessing level of quality

attained by operating system

• What does this help management to do?

– Assists management in identifying quality

problems

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• Why would appraisal costs decrease as
prevention increases quality?

– Because fewer resources needed for quality

inspections & subsequent search for causes of
any problems that are detected.

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Internal Failure Costs:

• What types of costs would these cover?

– Costs resulting from defects discovered during

production of output

• Fall into 2 major cost categories:

– yield losses (incurred if defective item must be scrapped)

– rework losses (incurred if item rerouted to some previous operation(s)

to correct defect or if service must be performed again)
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External Failure Costs:

• What are these costs?

– Costs arising when defect discovered after

customer has received output.

• What are examples?

– Lost market share because of bad word of mouth
– Lost profits
– Cost of warranty service
– Litigation costs
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• What is warranty?

– Written guarantee that producer will replace or

repair defective parts or perform service to
customer’s satisfaction

• Warranty costs must be considered in design

of new output, particularly as they relate to
reliability.
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Costs of Detecting Defects

Cost of detection and correction

Process Final testing

Customer 14
Where defect is detected
Management Aspects of Quality
Improvement

Effective management of quality requires the

execution of three activities:

1. Quality Planning

2. Quality Assurance

3. Quality Control and Improvement

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Quality Philosophy and Management Strategy

W. Edwards Deming
• Taught engineering, physics in
the 1920s, finished PhD in
1928
• Met Walter Shewhart at
Western Electric
• Long career in government
statistics, USDA, Bureau of the
Census
• During WWII, he worked with
US defense contractors,
deploying statistical methods
• Sent to Japan after WWII to
work on the census
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 Deming
• Deming was asked by Japanese Union
Scientists and Engineers to lecture on statistical
quality control to management

• Japanese adopted many aspects of Deming’s

management philosophy

• Deming stressed “continual never-ending

improvement”

• Deming lectured widely in North America during

the 1980s; he died 24 December 1993
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 Deming’s 14 Points
1. Create constancy of purpose toward improvement
2. Adopt a new philosophy, recognize that we are in a time
of change, a new economic age
3. Cease reliance on mass inspection to improve quality
4. End the practice of awarding business on the basis of
price alone
5. Improve constantly and forever the system of production
and service
6. Institute training

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 14 Points cont’d
7. Improve leadership, recognize that the aim of
supervision is help people and equipment to do a better
job
8. Drive out fear
9. Break down barriers between departments

10.Eliminate slogans and targets for the workforce such as

zero defects

11. Eliminate work standards

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 14 Points cont’d

12.Remove barriers that rob workers of the right to

pride in the quality of their work

13.Institute a vigorous program of education and self-

improvement

14.Put everyone to work to accomplish the

transformation

Note that the 14 points are about change

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 Deming’s Deadly Diseases
1. Lack of constancy of purpose
2. Emphasis on short-term profits
3. Performance evaluation, merit rating, annual
reviews
4. Mobility of management
5. Running a company on visible figures alone
6. Excessive medical costs for employee health
care
7. Excessive costs of warrantees

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25
Deming’s Obstacles to Success

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27
 Joseph M. Juran
• Born in Romania (1904-
2008), immigrated to the
US
• Worked at Western
Electric, influenced by
Walter Shewhart
• Emphasizes a more
strategic and planning
oriented approach to
quality than does Deming
• Juran Institute is still an
active organization
promoting the Juran
philosophy and quality
improvement practices
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 The Juran Trilogy

1. Planning
2. Control
3. Improvement

• These three processes are interrelated

• Control versus breakthrough
• Project-by-project improvement

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 Some of the Other “Gurus”

• Kaoru Ishikawa
– Son of the founder of JUSE, promoted widespread use
of basic tools
• Armand Feigenbaum
– Author of Total Quality Control, promoted overall
organizational involvement in quality,
– Three-step approach emphasized quality leadership,
quality technology, and organizational commitment
• Lesser gods, false prophets

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 Total Quality Management (TQM)

• Started in the early 1980s, Deming/Juran

philosophy as the focal point

• Emphasis on widespread training, quality awareness

• Training often turned over to HR function

• Not enough emphasis on quality control and

improvement tools, poor follow-through, no project-
by-project implementation strategy

• TQM was largely unsuccessful

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 Total Quality Management (TQM)

• TQM is “just another program”

• Value engineering
• Zero defects
• “Quality is free”

Recipes for Ineffectiveness and maybe

Disaster

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 Quality Function Deployment (QFD)

• What is the goal of any organization?

• What needs to be done to achieve this goal?

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 What is QFD?

• Technique having as its goal to bring the

voice of the customer into the design process
when developing a new output or modifying
an existing one

• Developed in 1970s by Dr. Akao

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• Objective:

– Allow company to obtain important, relevant

information related to an output that can be
analyzed to determine “best” production materials
and techniques

– Identify both strengths and weaknesses related to

output being evaluated

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• A matrix is created that organizes and
integrates both product and process
specifications with the customer wants and
needs

• Form of preventive action taken, what is the

value of this?

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• Main benefits:

– Reduced number of engineering changes

– Fewer production problems

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• Has two principal parts:

– Horizontal component: records information

related to customer desires

– Vertical component: records technical information

regarding achieving customer desires

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Summers, D. C. S., Quality, Fifth Edition, Prentice Hall, 2010, p. 370
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Summers, D. C. S., Quality, Fifth Edition, Prentice Hall, 2010, p. 371 37