UNIT-III

ORGANIZING FOR TOTAL QUALITY MANAGEMENT

INTRODUCTION

There are two prerequisites for a TQM organization.

1. Quality attitude that pervades the entire organization. Quality is not just a special activity
supervised by a high-ranking quality director.

2. Organizational infrastructure to support the pervasive attitude. Companies must have the
means and the structure to set goals, assign them to appropriate people, and convert them to
action plans.

People must be aware of the importance of quality and trained to accomplish the necessary tasks.

ORGANIZING FOR TQM: THE SYSTEMS APPROACH

A system can be defined as an entity composed of interdependent components that are integrated
for achievement of an objective. The organization is a social system comprising a number of
components such as marketing, production, finance, research, and so on. These organizational
components are activities that may or may not be integrated, and they do not necessarily have
objectives or operate toward achievement of an objective. Thus, synergism, a necessary attribute
of a well-organized system, may be lacking as each activity takes a parochial view or operates
independently of the others. This lack of synergism cannot continue under the TQM approach to
strategic management because interdependency across functions and departments is a necessary
precondition.

For any organization considering the implantation of quality management strategies, certain
quality management principles need to be considered. One such principle is system approach,
which determines the identification, understanding and management of a system of interrelated
processes for any goals that will improve the organization’s efficiency. This approach plays an
important role in any continuous improvement process, offering great benefit to the organization.

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 People
Dimension
Input n
Activities
Money Technical
Human Skills
Resources Objective
Machines s
Material
Technology

The Organizational System

The concept of an organizational system is shown in Figure. Inputs to the system are converted
by organization activities into an output. Indeed, the sole reason for the existence of the
organization and each activity within it is to add value to inputs and produce an output with
greater value. A measure of this conversion of inputs into outputs is known as productivity, and
the ratio of output to input must be a positive number if the system is to survive in the long run.

The activities of the organization are subsystems of the whole, but are also individual systems
with inputs and outputs that provide input to other systems such as customers and other internal
activities.

Key Benefits to System Approach

The primary benefits of system approach in regards to quality management can be seen on a
short- and long-term scale. These benefits include the following:
 Incorporation and configuration of processes that will best ensure return on investment.
 Capacity to concentrate efforts on the primary processes.
 Giving confidence to relevant parties in regards to the reliability, success and efficiency
of the organization.

Steps to Achieving System Approach

There are five steps that comprise of the system approach, with each step assisting organizations
to achieve more effective systems within their operations and goals. These steps include the
following:

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  Outline the system through the identification or development of specific processes that
are able to ensure that certain goals can be achieved.
 Organize the system in order to achieve the goal in the most efficient way possible, with
a clear plan that can be implemented by relevant parties.
 Understand the relationship among each one of the separate processes of the system, and
how they interrelate to form a complete system.
 Continuously expand the system through reporting, goal measurement and regular
system evaluation.
 Evaluate the resources that will be required to implement processes, to determine
resource constraints before implementation of each process within the system.
When these steps are taken into consideration during the development of systems within the
organization, processes will be far more effective. This in turn will assist with achieving quality
management and continuous improvement within the workplace through efficient systems.
ORGANIZING FOR QUALITY IMPLEMENTATION
 The traditional approach to organization sees the process as a mechanical assemblage of
functions and activities without a great deal of attention to strategy and desired results.
 This approach to building an organization structure has been criticized by Peter Drucker:
“What we need to know are not all the activities that might conceivably have to be
housed in the organization structure. What we need to know are the load-bearing parts of
the structure, the key activities.”
 Key activities will differ depending on the nature of the organization, its products, and its
strategy.
 What is a key activity in one may not be in another.
Example:
- Advertising may be a key activity in the value chain of Coca-Cola, but not in Boeing
Aircraft, where design is the key activity.
- Back office activity may be a key activity in Merrill Lynch, but not in McDonald’s.
 Firms frequently fail to prioritize or identify key activities in the value chain because of a
tendency to organize around the chart of accounts.
 Some firms focus on those activities where cost, rather than quality or other source of
differentiation, is the major consideration.

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ACTIVITY VALUE TO CUSTOMER
Purchasing Improved cost and quality of product
Engineering and design characteristics Unique product
Manufacturing Product reliability
Order processing Response time
Service Customer installation
Scheduling Response time
Inspection Defect-free product
Spare parts Maintenance
Human resources Customer training

MAKING THE TRANSITION FROM A TRADITIONAL TO A TQM ORGANIZATION

The systems approach to organizing suggests three significant changes:

1. The concept of the inverted organizational chart
2. A system of intra company internal quality
3. Horizontal and vertical integration of functions and activities

Roles in organizational transition to TQM

The role of top management is critical.

 Many of the most successful companies launched their programs by creating a quality
council or steering committee whose members comprise the top management team.
 Some multi-division companies encourage a council in each division or strategic business
unit. The council provides a good vehicle for management to demonstrate its leadership
in the quality initiative.
 Opinions differ as to who should lead or coordinate the TQM effort.
 One source suggests a new role similar to that of a financial controller, a role that is
justified on the basis that quality is now a strategic business planning and management

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 function.
 Others disagree and suggest that the company should avoid setting up a quality
bureaucracy headed by a high-profile quality director.
 There is general agreement that it should not be headed by a staff department such as
personnel or quality assurance.
 The process should be line led and given back to the business managers who implement it
on a daily basis.
 The role of middle managers has traditionally been an integrative one.
 They are the drivers of quality and the information funnel for change both vertically and
horizontally— the go-between for top management and front-line employees.
 They implement the strategy devised by top management by linking unit goals to
strategic objectives.
 They develop personnel, make continuous improvement possible, and accept
responsibility for performance deficiencies.

QUALITY CIRCLES
DEFINITION
The most widespread form of an employee involvement team is the quality circle, defined as “a
small group of employees doing similar or related work who meet regularly to identify, analyze,
and solve product quality and production problems and to improve general operations.”

Quality Circle is a small group of 6 to 12 employees doing similar work who voluntarily meet
together on a regular basis to identify improvements in their respective work areas using proven
techniques for analyzing and solving work related problems coming in the way of achieving and
sustaining excellence leading to mutual upliftment of employees as well as the organization.
It is "a way of capturing the creative and innovative power that lies within the work force".

CONCEPT
 The concept of Quality Circle is primarily based upon recognition of the value of the
worker as a human being, as someone who willingly activises on his job, his wisdom,
intelligence, experience, attitude and feelings.

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  It is based upon the human resource management considered as one of the key factors in
the improvement of product quality & productivity. Quality Circle concept has three
major attributes:
– Quality Circle is a form of participation management.
– Quality Circle is a human resource development technique.
– Quality Circle is a problem solving technique.

OBJECTIVES
The objectives of Quality Circles are multi-faced.
a) Change in Attitude
 From "I don’t care" to "I do care"
 Continuous improvement in quality of work life through humanization of work.
b) Self Development
 Bring out ‘Hidden Potential’ of people
 People get to learn additional skills.
c) Development of Team Spirit
 Individual Vs Team – "I could not do but we did it"
 Eliminate inter departmental conflicts.
d) Improved Organizational Culture
 Positive working environment.
 Total involvement of people at all levels.
 Higher motivational level.
 Participate Management process.

BENEFITS AND LIMITATIONS OF QUALITY CIRCLES

Advantages of quality circles

 Increase Productivity
 Improve Quality
 Boost Employee Morale

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Disadvantages/problems with quality circles

 Inadequate Training
 Unsure of Purpose
 Not truly Voluntary
 Lack of Management Interest
 Quality Circles are not really empowered to make decisions.

SEVEN STATISTICAL TOOLS OF QUALITY

The Seven Basic Tools of Quality (7 QC Tools) originated in Japan when the country was
undergoing major revolution in quality standards. It had become a mandatory topic as part of
Japanese’s industrial training program. These tools have simple graphical and statistical
techniques which are helpful in solving critical quality related issues.

They are also known as Seven Basics Tools of Quality because these tools could be implemented
by any person with very basic training in statistics. They are simple to apply and solve quality-
related complex issues.

The seven QC tools are:

STRATIFICATION (DIVIDE AND CONQUER)

 It is a method of dividing data into sub–categories. After that, one has to classify it based
on various parameters into groups and sub-groups. It helps in deriving meaningful
information and analyse the existing problem.
 It helps in dividing the data and deriving meaning out of it to solve a problem.

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CHECK SHEET

DEFINITION:

 Check sheets are tools for collecting data. They are designed specific to the type of data
to be collected. Check sheets aid in systematic collection of data.

EXAMPLES:

 Daily maintenance check sheets, attendance records, production log books, etc.

FUNCTIONS:

 To check the shape of the probability distribution of a process.

 To quantify defects by type.
 To quantify defects by location.
 To quantify defects by cause (machine, worker).
 To keep track of the completion of steps in a multistep procedure (in other words, as a
checklist).

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PARETO DIAGRAM/(80/20 RULE)

 Pareto Diagram is a tool that arranges items in the order of the magnitude of their
contribution, thereby identifying a few items exerting maximum influence.
 This is named after Vilfredo Pareto. It revolves around the concept of 80-20 rule which
underlines that in any process, 80% of problem or failure is just caused by 20% of few
major factors which are often referred as Vital Few, whereas remaining 20% of problem
or failure is caused by 80% of many minor factors which are also referred as Trivial
Many.
 The purpose of Pareto Chart is to highlight the most important factors that is the reason
for major cause of problem or failure.
 Pareto chart is having bars graphs and line graphs where individual factors are
represented by a bar graph in descending order of their impact and the cumulative total is
shown by a line graph.

BENEFITS:

 Prioritize projects for improvement,

 Set up corrective action teams to solve problems,
 Identify products on which most complaints are received,
 Identify the nature of complaints occurring most often,
 Identify most frequent causes for rejections or for other similar purposes.

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SCATTER DIAGRAM/ SHEWHART CHART

DEFINITION:

 A scatter diagram, also called a scatter plot or a scatter plot, is a visualization of the
relationship between two variables measured on the same set of individuals.
 A tool to study the relationship between two variables is known as Scatter Diagram. It
consists of plotting a series of points representing several observations on a graph in
which one variable is on X-axis and the other variable in on Y-axis.

BENEFITS:

 It shows the relationship between two variables.

 It is the best method to show a non-linear pattern.
 The range of data flow, i.e. maximum and minimum value, can be easily determined.
 Shows a trend in the data relationship
 Retains exact data values and sample size
 Shows minimum/maximum

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CAUSE & EFFECT DIAGRAM/ FISH-BONE DIAGRAM/ ISHIKAWA DIAGRAM

 A cause and effect diagram, also known as a fish-bone diagram shows the many possible
causes of a problem.
 The defect is shown as the fish's head, facing to the right, with the causes extending to the
left as fishbones; the ribs branch off the backbone for major causes, with sub-branches
for root-causes, to as many levels as required.
 A diagram that shows the causes of an event and is often used to outline the different
steps in a process, demonstrate where quality control issues might arise and determine
which resources are required at specific times.
 To use this tool, you need to first identify the problem you are trying to solve and simply
write it in the box (head of the fish) to the right.
 Next, you will list the major causes of the problem on the spine of the fish.
 Causes are typically separated into categories of people, process, materials and
equipment.
 Causes are then identified through brainstorming with a group familiar with the problem.
 Once all of the possible causes are identified, they can be used to develop an
improvement plan to help resolve the identified problem.

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K-T METHODOLOGY

 Kepner Tregoe methodology is a structured methodology for gathering information and

prioritizing and evaluating it. It was developed by Charles H. Kepner and Benjamin B.
Tregoe in the 1960s.
 This is a rational model that is well respected in business management circles. An
important aspect of Kepner Tregoe decision making is the assessment and prioritizing of
risk.
 So the idea is not to find a perfect solution but rather the best possible choice, based on
actually achieving the outcome with minimal negative consequences.
 It is marketed as a way to make unbiased decisions in that it is said to limit conscious and
unconscious biases that draw attention away from the outcome.
 It is used for decision making .
 It is very detailed and complex method applicable in many areas, which is much broader
than just idea selection.
 It is called also a root cause analysis and decision-making method.
 It is a step-by-step approach for systematically solving problems, making decisions, and
analyzing potential risks.
There are four basic steps when using the Kepner Tregoe decision matrix:

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  Situation appraisal - is used to clarify the situation, outline concerns and choose a
direction
 Problem analysis - here the problem is defined and it's root cause determined
 Decision analysis - alternatives are identified and a risk analysis done for each
 Potential problem analysis - the best of the alternatives is further scrutinized against
potential problems and negative consequences and actions are proposed to minimize the
risk.

Following the step-by-step approach of Kepner Tregoe decision making allows for the use of
critical thinking skills in considering many possible factors that may be vital in making the
decision.

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