Opmgt CH.5 Reid

CHAPTER
•5
Total Quality Management
Learning Objectives
 Define Total Quality Management
(TQM)
 Identify the TQM philosophy
 Describe the service/good
dimensions of quality
 Identify the costs of quality
 Describe problem-solving tools
 Describe quality awards &
certifications
What is TQM?
 Quality (Oxford dictionary’s definition):
 The degree or level of excellence of a thing.
 Total Quality Management (TQM)

 An integrated effort designed to improve
quality performance at every level of the
organization.
 TQM is Customer-defined quality

 The meaning of quality as defined by the
customer.
The
The Meaning
Meaning of
of Quality
Quality
Producer’s
Producer’s Perspective
Perspective Consumer’s
Consumer’s Perspective
Perspective
Quality
Quality of
of Conformance
Conformance Quality
Quality of
of Design
Design
Production
Production .Conformance to • Quality characteristics Marketing
Marketing
specifications • Price
• Cost
Fitness
Fitness for
for
Consumer
Consumer UseUse
Defining Quality
 Services are intangible (indirect) products that
cannot be seen or touched. Rather, they are
experienced and evaluated through
perceptions (e.g., health care, educational
services, tourism/recreation services).
 Common definitions of quality:

 Conformance to specifications (producer’s
perspective)
 How well the product meets pre-specified targets and
tolerances of designers
 It refers to the degree to which the product meets, or
conforms to, it’s design specifications such as width, length,
and weight or volume (e.g., of a bottle of soft drink). It is a
measure of consistency & lack of variation.
 Value for Price Paid (consumer’s perspective)

Costs of Quality
 Quality of Design/Characteristics (consumer’s
perspective)
 Determines which features will be included in the final design
of a product to meet customers’ preferences/needs.
 Fitness for Use (Consumer’s + Producer’s Perspective)

 Evaluation of ow well the product performs for its intended use
(e.g., sedan cars versus pick-up trucks are equally ‘fir for use’ but
with different customers).
Additional Definitions of Quality

 Quality of Support Services (consumer’s perspective)
 Quality of support after sale (post-sale services)
 Relates to the assistance with issues that arise after the
purchase (e.g., warranty & repair issues).
 It includes responsiveness of service personnel (to inquiries),
rapid repair, flexible preventive maintenance, and short lead
times for ordering spare parts.
 The promises is to build a continuing customer relationship.
 Psychological Criteria (consumer’s perspective)

 Focuses on judgmental evaluations of what constitutes product
The Evolution of TQM
(Old and New Quality
Concepts)
The Philosophy of TQM
 TQM is different from the old concept of

quality due to the:
 Focus on identifying root causes of
reoccurring problems & correcting them.
 A proactive, not reactive approach.
 Allowing of customers to determine what’s
important (customer-driven quality).
 Involvement of everyone in the organization.
Specific Concepts of TQM
Philosophy
 Customer Focus:
 Identify and meet current customer needs.
 Continually gather data (look for changing
preferences).
 Continuous Improvement:
 A philosophy of never-ending improvement through
learning and problem solving.
 Good enough, isn’t good enough.
 To use an analogy, they believe that it is better to
take frequent small doses of medicine than to take
one large dose or undertake surgical operation.
 Japanese orgs. believe in gradual/continuous
improvements (kaizen) not large magnitudes of
radical changes (reengineering) as in U.S. org.
 Example: Using PDSA Cycle (Deming’s Wheel)
PDSA Cycle (Deming’s Interactive
Wheel)
 Plan: Plan experiments to uncover the root
cause of problems
 Do: Conduct the experiments
 Study: Study the data generated
 Act: Implement improvements or start over

 Employee Empowerment: Empower employees
to find and correct quality problems.
 Team Approach:
 Quality requires an organization-wide effort.
 Quality circle (initiated by Japanese companies): a
team of volunteer production employees
(composed of eight to ten members) and their
supervisors who meet regularly (e.g., weekly) to
solve quality problems. They use brainstorming
and function in a casual and friendly manner.
 Product Design:
 Products need to be designed to meet customer
expectations (e.g., QFD).
 Use of Quality Tools:

 All employees should be trained to properly utilize 7
quality control tools on an ongoing basis (not one-
 Process Management (Quality at the Source)
 Find (uncover) the source of quality problems &
correct or eliminate them than to discard defective
items after production.
 Example: throwing away the burned cookies will
not correct the problem, instead, you need to see
where the problem is and correct it.
 The old concept of quality focused on inspecting
goods after they were produced, whereas the new
concept of quality focuses on identifying quality
problems at the source (input stage) and correcting
them.
 Quality should be built into the process.
 Sources of quality problems should be identified and
corrected.
 Managing Supplier Quality:

 Ensuring that suppliers engage in the same high
quality practices.
7 Quality Control Tools
(Problem Solving Tools)
 Cause-and-Effect Diagrams
 Flow Charts
 Check Lists
 Control Charts
 Scatter Diagrams
 Pareto Charts
 Histograms
Cause-and-Effect
Diagrams
 Also called Fishbone Diagrams
 Help identify potential causes of specific

‘effects’ (quality problems).
Flow Charts
 A schematic diagram of the sequence of
steps involved in a process.
 Used to improve operation- to make it
faster, more efficient, less costly, and
more responsive.
Checklists
 Simple data check-off sheet designed to
identify type of quality problems at each
work station; per shift, per machine, per
operator.
 Simple forms used to record the
appearance of common defects and the
number of occurrences.
Control Charts
 Important tool used in Statistical Process
Control.
 The UCL and LCL are calculated limits
used to show when process is in or out of
control.
 Track whether a process is operating as
expected (upper/lower tolerance level)
Scatter Diagrams
 A graph that illustrates how two
variables are statistically (but may not
causally) related to each other.
 Data can be used in a regression analysis
to establish equation for the relationship.
Pareto Analysis
 Technique that helps in identifying the degree of
importance of different quality problems (percentage).
displays the degree of importance for each element
 Named after the 19th century Italian economist.
 Often called the 80-20 Rule
 Principle is that quality problems are the result of only
a few problems e.g. 80% of the problems caused by
20% of causes
Histograms
 A chart that illustrates the frequency
distribution (normal or symmetrical) of
observed values of a variable, e.g., service
time at a bank drive-up window
 Displays whether the distribution is
symmetrical (normal) or skewed.

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CHAPTER

 Total Quality Management (TQM)

 TQM is Customer-defined quality

 Common definitions of quality:

 Value for Price Paid (consumer’s perspective)

 Fitness for Use (Consumer’s + Producer’s Perspective)

Additional Definitions of Quality

 Psychological Criteria (consumer’s perspective)

 TQM is different from the old concept of

 Study: Study the data generated

 Act: Implement improvements or start over

 Use of Quality Tools:

 Managing Supplier Quality:

 Help identify potential causes of specific

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