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total quality management - January 27th, 2009

Total Quality Management

International Business Machine Corporation Total Quality Management International Standard Organization Total Productive Maintenance Quality Control Circles Business Process Re-Engineering Total Quality Circles Automated Teller Machines Control Processing Centre Computer Aided Design Including Plan-Do-Check-Act Quality Management System 5 SUMMARY Every nation has its own independent historical and cultural background. The quality sce-nario , therefore, differs from one national setting to the other. The nations are orienting their quality management strategies and systems to meet the requirements of the opera-ing environment though the primary focus remains the same, that is, Total Customer Satisfication .Many of the present techniques of quality management were developed in Japan. However, U.S.A., European nations and developing nations have also contributed significantly to this development. The studies carried out by researchers in different national settings reveal that the concept and philosophies of TQM are not understood by the managers and others.An all out effort , therefore is required to promote the understan-ding by launching massive educational and management development programs at all levels so as to create a cultural consciousness towards quality. TQM is not undimensional approach but is multifaceted in nature.Understanding these facets is essential to promote a successful quality improvement program. An integrated approach on all vital components of TQM is required to achieve the desired goal. So, the summarization is being done in the following points. 1. TQM has been accepted by both service and manufacturing organizations,globally as a systematic management approach to meet the competitive challenges. 6 2. TQM redefines the quality with emphasis on top management commitment and custo-mer satisfaction. 3. The benefits of TQM are numerous and are increasingly realized by organizations. 4. TQM provides a linkage between productivity and quality. 5. The application of TQM tools increases a company’s efficiency. 6. The focus of TQM is on: (a) (b) (c) (d) Involvement of everyone in organization in continuous improvement. Commitment to satisfy customers. Participation through teamwork. Commitment and Leadership of top management. CHAPTER ONE INTRODUCTION ? DEFINITION As defined by ISO: "TQM is a management approach of an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society." In Japanese, TQM comprises four process steps, namely: 1. Kaizen – Focuses on Continuous Process Improvement, to make processes visible, repeatable and measureable. 7 2. Atarimae Hinshitsu – Focuses on intangible effects on processes and ways to optimize and reduce their effects. 3. Kansei – Examining the way the user applies the product leads to improvement in the product itself. 4. Miryokuteki Hinshitsu – Broadens management concern beyond the immediate product. TQM requires that the company maintain this quality standard in all aspects of its business. This requires ensuring that things are done right the first time and that defects and waste are eliminated from operations. Total Quality Management (TQM) is a management strategy aimed at embedding awareness of quality in all organizational processes. TQM has been widely used in manufacturing, education, government, and service industries, as well as NASA space and science programs. ? ORIGINS Although W. Edwards Deming is largely credited with igniting the quality revolution in Japan starting in 1946 and trying to bring it to the United States in the 1980s, Armand V. Feigenbaum was developing a similar set of principles at General Electric in the United States at around the same time. "Total Quality Control" was the key concept of Feigenbaum's 1951 book, Quality Control: Principles, Practice, and Administration, a book that was subsequently released in 1961 under the title, Total Quality Control (ISBN 0070203539). Joseph Juran, Philip B. Crosby, and Kaoru Ishikawa also contributed to the body of knowledge now known as TQM. The American Society for Quality says that the term Total Quality Management was first used by the U.S. Naval Air Systems Command "to describe its Japanese-style management approach to quality improvement."[1] This is consistent with the story that the United States Department of the Navy Personnel Research and Development Center began researching the use of statistical process control (SPC); the work of Juran, Crosby, and Ishikawa; and the philosophy of Deming to make performance improvements in 1984. This approach was first tested at the North Island Naval Aviation Depot. 8 In his paper, "The Making of TQM: History and Margins of the Hi(gh)-Story" from 1994, Xu claims that "Total Quality Control" is translated incorrectly from Japanese since there is no difference between the words "control" and "management" in Japanese. William Golimski refers to Koji Kobayashi, former CEO of NEC, being the first to use TQM, which he did during a speech when he got the Deming prize in 1974. ? TQM :- “A QUALITY ORIENTED APPROACH” Total Quality Management (TQM) is one of quality-oriented approaches that many organisations adopt. It is generally acknowledged that manufacturing companies need to be quality oriented in conducting their business to survive the business world. TQM is an integrated management philosophy and a set of practices that emphasise top management commitment, customer focus, supplier relationship, benchmarking, quality-oriented training, employee focus, zerodefects, process improvement, and quality measurement. This paper investigates the structural linkages between TQM, product quality performance and business performance in the electronics industry in Malaysia. Given the nature of this study, the statistical analysis technique called Structural Equation Modelling was used. This preliminary result suggests that there is insufficient statistical evidence to conclude significant simple relationships between TQM, product quality performance, and business performance. This implies that the electronics industry cannot assume direct causal linkages between these three constructs, which might also suggest that there is a more complex relationship between TQM, product quality performance, and business performance. However, the results reveal that top management commitment, supplier relations and training in particular appear to be of primary importance for TQM practices in Malaysian electronics companies. 9 ? CHARACTERISTICS OF TQM: The characteristics of TQM, as revealed from above definition are as follows: 1. TQM is customer oriented. 2. TQM requires a long term commitment for continuous improvement of all processes. 3. The success of TQM demands the leadership of top management and continuous involvement. 4. Responsibility for establishments and improvement of systems lies with the management of an organisation. 5. TQM is a strategy for continuously improving performance at all levels and in all areas of responsibility. ? POTENTIAL BENEFITS OF TQM: The advantages of adopting TQM system compared to conventional quality system are numerous and are outlined below. 10 1. TQM helps to focus clearly on the needs of the market. The traditional approach of quality control focusses on the technical details of a product so as to satisfy the customer. However, the customer longs for different satisfaction perspectives which are generally overlooked in the traditional approach.The needs change from person to person and also from place to place. As TQM focuses on the concept of university, it tries to abstract the satisfaction perceptions of the market and thus helps the organisation to identify and meet the requirements of the market in a better way. 2. TQM facilitates to aspire for a top quality performer in every sphere of activity. It is a well accepted fact that the negative attitudes of employees and nonparticipative culture of the organization pose the greatest hurdle to organisation’s success, growth and prosperity. TQM emphasis, on bringing about attitudinal and cultural change through promotion of participative work culture and effective team-work. This serves to satisfy the higher human needs of recognition and self-development and enhances employee’s interest in the job. The employee’s performance, thus, is not restricted to the product or service areas but reflects in other spheres as well. 3. It channelises the procedures necessary to achieve quality performance. Quality in its true sense can not be achieved instantly. It requires a systematic and a long-term planning and strategic approach. By focusing on defining the quality policies, goals and objectives, and communicating these properly to one and all in the organization, adopting SQC and SPC techniques and developing and using a system of evaluation , the organization can channelize their efforts to achieve the desired and objectivated quality performance. 4. It helps examine critically and continuously all processes to remove nonproductive activities and waste. The organizations always aim at improving productivity as it leads to reduction in cost resulting in increase in profitability. The efforts in this direction are 11 contributed because of the formation of quality improvement teams which meet regularly and through a systematic approach which tries to remove nonproductive activity. A continuous effort to identify the problems and resolve them helps to reduce the waste. The culture of well being thus improves housekeeping, cost-effectiveness and safety. 5. It gears organizations to fully understand the competition and develop an effective combating strategy. The dynamic changes in the global market and the open market policies adopted by a large number of organizations has resulted in increased competition and for many organizations the survival has become a key issue. For this cause it is essential for the organistions to understand the competition and develop and adopt suitable strategies to meet the challenges. As TQM helps to understand the pulse of customer and thus the market, it gives an edge to the organizations of variable nature to meet the competition. 6. It helps to develop good procedures for communication and acknowledging good work. Improper procedures and inadequate communication are yet another bane of many organizations, which result in misunderstanding, confusion, low productivity, duplication of efforts, poor quality, low morale and so on. TQM brings together members of various related sections, departments and different levels of management thereby providing an effective vehicle of communication and interaction. 7. It helps to review the process needed to develop the strategy of never ending improvement. Quality improvement efforts cannot be restricted to any time period. They need to be continuous to meet the dynamic challenges. TQM emphasizes on a continuous and periodic review so as to make the required changes. The benefits derived by the organizations, therefore, are many and multifaceted. Many of these can be measured in quantitative terms. However, the intangible benefits, which includes enrichment of the quality of the worklife and many more are not quantifiable. At the same time, it has to be established whether they do occur or not in order to prove or disapprove the efficacy of the concept. This can be assessed by a well-planned research 12 project or by carrying out an opinion survey periodically. The tangible and intangible benefits of TQM are variable in nature. CHAPTER TWO CONCEPTS AND PHILOSOPHIES OF TQM ? INTRODUCTION: Total Quality Management (TQM), a buzzword phrase of the 1980's, has been killed and resurrected on a number of occasions. The concept and principles, though simple seem to be creeping back into existence by "bits and pieces" through the evolution of the ISO9001 Management Quality System standard. Companies who have implemented TQM include Ford Motor Company, Phillips Semiconductor, SGL Carbon, Motorola and Toyota Motor Company. The latest changes coming up for the ISO 9001:2000 standard’s "Process Model" seem to complete the embodiment. TQM is the concept that quality can be managed and that it is a process. The following information is provided to give an understanding of the key elements of this process. 13 ? TOTAL QUALITY MANAGEMENT(TQM) : Total = Quality involves everyone and all activities in the company. Quality = Conformance to Requirements (Meeting Customer Requirements). Management = Quality can and must be managed. TQM = A process for managing quality; it must be a continuous way of life; a philosophy of perpetual improvement in everything we do. ? TQM Compared to ISO 9001 : ISO 9000 is a Quality System Management Standard. TQM is a philosophy of perpetual improvement. The ISO Quality Standard sets in place a system to deploy policy and verifiable objectives. An ISO implementation is a basis for a Total Quality Management implementation. Where there is an ISO system, about 75 percent of the steps are in place for TQM. The requirements for TQM can be considered ISO plus. Another aspect relating to the ISO Standard is that the proposed changes for the next revision (1999) will contain customer satisfaction and measurement requirements. In short, implementing TQM is being proactive concerning quality rather than reactive. ? TQM as a Foundation : TQM is the foundation for activities which include; • • • • • • Meeting Customer Requirements Reducing Development Cycle Times Just In Time/Demand Flow Manufacturing Improvement Teams Reducing Product and Service Costs Improving Administrative Systems Training ? Ten Steps to Total Quality Management (TQM): 14 The Ten Steps to TQM are as follows: 1. Pursue New Strategic Thinking 2. Know your Customers 3. Set True Customer Requirements 4. Concentrate on Prevention, Not Correction 5. Reduce Chronic Waste 6. Pursue a Continuous Improvement Strategy 7. Use Structured Methodology for Process Improvement 8. Reduce Variation 9. Use a Balanced Approach 10. Apply to All Functions ? Principles of TQM : The Principles of TQM are as follows: 1. Quality can and must be managed. 2. Everyone has a customer and is a supplier. 3. Processes, not people are the problem. 4. Every employee is responsible for quality. 5. Problems must be prevented, not just fixed. 6. Quality must be measured. 7. Quality improvements must be continuous. 8. The quality standard is defect free. 9. Goals are based on requirements, not negotiated. 10. Life cycle costs, not front end costs. 11. Management must be involved and lead. 12. Management Commitment 1. Plan (drive, direct) 2. Do (deploy, support, participate) 3. Check (review) 4. Act (recognize, communicate, revise) 13. Employee Empowerment 1. Training 2. Suggestion scheme 3. Measurement and recognition 4. Excellence teams 15 14. Fact Based Decision Making 1. SPC (statistical process control) 2. DOE, FMEA 3. The 7 statistical tools 4. TOPS (FORD 8D - Team Oriented Problem Solving) 15. Continuous Improvement 1. Systematic measurement and focus on CONQ 2. Excellence teams 3. Cross-functional process management 4. Attain, maintain, improve standards 16. Customer Focus 1. Supplier partnership 2. Service relationship with internal customers 3. Never compromise quality 4. Customer driven standards Plan and organize for quality improvement. ? Processes must be Managed and Improved: Processes must be managed and improved! This involves: • • • • • • • Defining the process Measuring process performance (metrics) Reviewing process performance Identifying process shortcomings Analyzing process problems Making a process change Measuring the effects of the process change Communicating both ways between supervisor and user 16 ? Key to Quality: The key to improving quality is to improve processes that define, produce and support our products. All people work in processes. People • • Get processes "in control" Work with other employees and managers to identify process problems and eliminate them Managers and/or Supervisors Work on Processes • • • Provide training and tool resources Measure and review process performance (metrics) Improve process performance with the help of those who use the process ? Planning a Change: 17 ? TQM PROBLEM SOLVING SEQUENCE: 18 TQM Process Improvement and Problem Solving Sequence PLAN (PLAN A CHANGE) DEFINE THE PROBLEM 1. Recognize that what you are doing is a "PROCESS" IDENTIFY POSSIBLE CAUSES 6. "BRAINSTORM" what is causing the problem. EVALUATE POSSIBLE CAUSES DO (IMPLEMENT THE CHANGE) MAKE A CHANGE CHECK (OBSERVE THE EFFECTS) TEST THE CHANGE ACTION (EMBED THE FIX INTO THE PROCESS FOR GOOD) TAKE PERMANENT ACTION 12. Ensure the fix is embedded in the process and that the resulting process is used. Continue to monitor the process to ensure: A. The problem is fixed for good. and B. The process is good enough o Control charts - sampling ****To ensure continuous improvement, return to step 5. 8. Determine the 10. Determine what 11. Determine what relationship change would help change worked between cause (confirmation). and effect • Your o Scatter knowledge • Histograms 2. Identify the 7. Determine what diagrams of the • Control charts commodity past data shows. o Regression process - sampling analysis being o Frequency • Scatter processed. distribution diagrams • Scatter - Process o Pareto charts 9. Determine • Control diagrams Inference o Control charts what the Charts - sampling process is doing - sampling 3. Define some now • Pareto measurable o Control charts analysis characteristics - sampling of value to the ****Then make commodity. the change. 4. Describe the "PROCESS" o Process Flow Analysis's o Flow charts o List of steps 5. Identify the "Big" problem o Brainstorming o Checklists o Pareto analysis ? THE EIGHT ELEMENTS OF TQM: 19 Total Quality Management is a management approach that originated in the 1950's and has steadily become more popular since the early 1980's. Total Quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with processes being done right the first time and defects and waste eradicated from operations. To be successful implementing TQM, an organization must concentrate on the eight key elements: 1. 2. 3. 4. 5. 6. 7. 8. Ethics Integrity Trust Training Teamwork Leadership Recognition Communication This paper is meant to describe the eight elements comprising TQM. Key Elements TQM has been coined to describe a philosophy that makes quality the driving force behind leadership, design, planning, and improvement initiatives. For this, TQM requires the help of those eight key elements. These elements can be divided into four groups according to their function. The groups are: I. Foundation - It includes: Ethics, Integrity and Trust. II. Building Bricks - It includes: Training, Teamwork and Leadership. III. Binding Mortar - It includes: Communication. IV. Roof - It includes: Recognition. I. Foundation TQM is built on a foundation of ethics, integrity and trust. It fosters openness, fairness and sincerity and allows involvement by everyone. This is the key to unlocking the ultimate potential of TQM. These three elements move together, however, each element offers something different to the TQM concept. 1. Ethics - Ethics is the discipline concerned with good and bad in any situation. It is a two-faceted subject represented by organizational and individual ethics. Organizational ethics establish a business code of ethics that outlines guidelines that all employees are to adhere to in the performance of their work. Individual ethics include personal rights or wrongs. 2. Integrity - Integrity implies honesty, morals, values, fairness, and adherence to the facts and sincerity. The characteristic is what customers (internal or external) expect 20 and deserve to receive. People see the opposite of integrity as duplicity. TQM will not work in an atmosphere of duplicity. 3. Trust - Trust is a by-product of integrity and ethical conduct. Without trust, the framework of TQM cannot be built. Trust fosters full participation of all members. It allows empowerment that encourages pride ownership and it encourages commitment. It allows decision making at appropriate levels in the organization, fosters individual risk-taking for continuous improvement and helps to ensure that measurements focus on improvement of process and are not used to contend people. Trust is essential to ensure customer satisfaction. So, trust builds the cooperative environment essential for TQM. II.Bricks Basing on the strong foundation of trust, ethics and integrity, bricks are placed to reach the roof of recognition. It includes: 4. Training - Training is very important for employees to be highly productive. Supervisors are solely responsible for implementing TQM within their departments, and teaching their employees the philosophies of TQM. Training that employees require are interpersonal skills, the ability to function within teams, problem solving, decision making, job management performance analysis and improvement, business economics and technical skills. During the creation and formation of TQM, employees are trained so that they can become effective employees for the company. 5. Teamwork - To become successful in business, teamwork is also a key element of TQM. With the use of teams, the business will receive quicker and better solutions to problems. Teams also provide more permanent improvements in processes and operations. In teams, people feel more comfortable bringing up problems that may occur, and can get help from other workers to find a solution and put into place. There are mainly three types of teams that TQM organizations adopt: A. Quality Improvement Teams or Excellence Teams (QITS) - These are temporary teams with the purpose of dealing with specific problems that often re-occur. These teams are set up for period of three to twelve months. B. Problem Solving Teams (PSTs) - These are temporary teams to solve certain problems and also to identify and overcome causes of problems. They generally last from one week to three months. C. Natural Work Teams (NWTs) - These teams consist of small groups of skilled workers who share tasks and responsibilities. These teams use concepts such as employee involvement teams, self-managing teams and quality circles. These teams generally work for one to two hours a week. 21 6. Leadership - It is possibly the most important element in TQM. It appears everywhere in organization. Leadership in TQM requires the manager to provide an inspiring vision, make strategic directions that are understood by all and to instill values that guide subordinates. For TQM to be successful in the business, the supervisor must be committed in leading his employees. A supervisor must understand TQM, believe in it and then demonstrate their belief and commitment through their daily practices of TQM. The supervisor makes sure that strategies, philosophies, values and goals are transmitted down through out the organization to provide focus, clarity and direction. A key point is that TQM has to be introduced and led by top management. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company and in creating and deploying well defined systems, methods and performance measures for achieving those goals. III.BindingMortar 7. Communication - It binds everything together. Starting from foundation to roof of the TQM house, everything is bound by strong mortar of communication. It acts as a vital link between all elements of TQM. Communication means a common understanding of ideas between the sender and the receiver. The success of TQM demands communication with and among all the organization members, suppliers and customers. Supervisors must keep open airways where employees can send and receive information about the TQM process. Communication coupled with the sharing of correct information is vital. For communication to be credible the message must be clear and receiver must interpret in the way the sender intended. There are different ways of communication such as: A. Downward communication - This is the dominant form of communication in an organization. Presentations and discussions basically do it. By this the supervisors are able to make the employees clear about TQM. B. Upward communication - By this the lower level of employees are able to provide suggestions to upper management of the affects of TQM. As employees provide insight and constructive criticism, supervisors must listen effectively to correct the situation that comes about through the use of TQM. This forms a level of trust between supervisors and employees. This is also similar to empowering communication, where supervisors keep open ears and listen to others. C. Sideways communication - This type of communication is important because it breaks down barriers between departments. It also allows dealing with customers and suppliers in a more professional manner. IV.Roof 8. Recognition - Recognition is the last and final element in the entire system. It should be provided for both suggestions and achievements for teams as well as individuals. Employees strive to receive recognition for themselves and their teams. Detecting and recognizing contributors is the most important job of a supervisor. As people are recognized, there can be huge changes in self-esteem, productivity, 22 quality and the amount of effort exhorted to the task at hand. Recognition comes in its best form when it is immediately following an action that an employee has performed. Recognition comes in different ways, places and time such as, Ways - It can be by way of personal letter from top management. Also by award banquets, plaques, trophies etc. • • Places - Good performers can be recognized in front of departments, on performance boards and also in front of top management. Time - Recognition can given at any time like in staff meeting, annual award banquets, etc. We can conclude that these eight elements are key in ensuring the success of TQM in an organization and that the supervisor is a huge part in developing these elements in the work place. Without these elements, the business entities cannot be successful TQM implementers. It is very clear from the above discussion that TQM without involving integrity, ethics and trust would be a great remiss, in fact it would be incomplete. Training is the key by which the organization creates a TQM environment. Leadership and teamwork go hand in hand. Lack of communication between departments, supervisors and employees create a burden on the whole TQM process. Last but not the least, recognition should be given to people who contributed to the overall completed task. Hence, lead by example, train employees to provide a quality product, create an environment where there is no fear to share knowledge, and give credit where credit is due is the motto of a successful TQM organization ? THE TQM MODEL: At the century close, the creation of the global market, international orientation of management that sweeps national boundaries, introduction of new technologies, and shift towards customer focused strategies, make the competition stronger than ever. The criteria for success in this global, internationally oriented market have been changing rapidly. In order to expand business, enter new markets, and set realistic, competitive long-term objectives, excellence became an imperative. Management's effort has been directed towards discovering what makes a company excellent. To achieve excellence, companies must develop a corporate culture of treating people as their most important asset and provide a consistent level of high quality products and services in every market in which they operate. Such an environment has supported the wide acceptance of Total Quality Management (TQM) which 23 emerged recently as a new, challenging, marketable philosophy. It involves three spheres of changes in an organization -- people, technology and structure. There is also a need for a systematic approach so that each element of TQMEX can be bonded together smoothly. Oakland [1989] originated the idea of a 3-cornerstone model. The proposed 4-pillar model (Figure 3.1) brings the customer's requirement into the system. This makes the approach to TQM more complete. The additional pillar -- satisfying customers -- is vital because it explicitly addresses customers requirements. Without it TQM would have no objective. The Four Pillars of TQM The role of top management in implementation of total quality is crucial and its input on people far-reaching. TQM, therefore, should be understood as management of the system through systems thinking, which means understanding all the elements in the company and putting them to work together towards the common goal. The TQMEX Model advocates an integrated approach in order to support the transition to systems management which is an ongoing process of continuous improvement that begins when the company commits itself to managing by quality. The Model illuminates the elements that form a base to the understanding of TQM philosophy and implementation of the process company-wide. ? The Structure of TQMEX: 24 ? The Logic of TQMEX: In order to have a systematic approach to TQM, it is necessary to develop a conceptual model. Generally, a model is a sequence of steps arranged logically to serve as a guideline for implementation of a process in order to achieve the ultimate goal. The model should be simple, logical and yet comprehensive enough for TQM implementation. It also has to sustain the changes in business environment of the new era. The Model also reflects teachings of the contemporary quality gurus. The idea was to develop a universally applicable step-by-step guideline by including recognized practices in TQM: • • • • • Japanese 5-S Practice (5-S) Business Process Re-engineering (BPR) Quality Control Circles (QCCs) ISO 9001/2 Quality Management System (ISO) Total Productive Maintenance (TPM) As Osada pointed out, 5-S is the key to total quality environment. Therefore, it should be the first step. BPR is concerned with re-defining and designing your business process in order to meet the needs of your customers effectively. It is more concerned with the business objectives and systems, and should follow as Step 2. QCCs are concerned with encouraging the employees to participate in continuous improvement and guide them through. They improve human resources capability to achieve the business objectives. Therefore, this should be Step 3. ISO 9000 is to develop a quality management system based on the good practices in the previous three steps. TPM is a result of applying 5-S to equipment based on a sound quality 25 management system. In fact ISO 9001 requires procedures for process control and inspection and testing equipment which are part of TPM. Therefore TPM should be implemented in Step 5. If the above five steps have been implemented successfully, the organization is already very close towards achieving TQM. TQMEX is a sequential model which is easy to remember and simple to implement. This is in line with the quality principle of Keep It Short and Simple (KISS), although it is not simple to make a model simple! Companies starting to implement TQM should follow TQMEX step-by-step. Companies which have already gone through some degree of improvement using some of the steps should review what have not been done and do it as their next step of improvement. In order to maximize your benefits from TQMEX, you have to start early too. CHAPTER THREE THE ACCEPTABILITY OF TQM ? JAPANESE TQM MODEL: At first, few but the Japanese took Deming seriously. Known for his legendary attacks on executives and compassion for the worker, the Japanese sense of responsibility to one's superiors and subordinates made it easier to accept Deming's message that management's role was to provide the optimal conditions for the workers to do the best job. The Japanese then extended Deming's teaching to many dimensions of management. Here are TQM models from the Japanese Society of Quality and the Japan Standards Association that show how extensive their definition of TQM is. The Japanese identify three major dimensions of TQM: Daily Management, Hoshin/Policy Management, and Cross Function Management. We will study these in detail in the course. They can be visualized with the following picture. 26 ? TQM IN USA: As regards quality, USA is at crossroads today.Inspite of the fact that USA developed the techniques and concepts of SQC and TQC and the japenese imported these techniques, the further orientation and development in philoshophy, concept and techniques in terms of Q.C. circles and company wide quality control took place in Japan more rapidly and successfully. While the American companies remained concerned about detecting and segregating defective parts from good ones, the Japanese companies devised systems to reduce defects and produce good quality products.This resulted in America losing its position of dominance not only in the American market but also in the world. Much of the quality movement in USA is based on tools and techniques developed by the japenese. Adoption of these techniques requires complete redevelopment in both methods and emphasis.The most critical challenge facing U.S quality movement is the development and implementation of quality focused corporate management systems that achieve the coherence, integration and 27 comprehensiveness of quality management in japan. The American companies are characterized by: 1. A high concentration of industry on relatively few companies. 2. Stress on promoting share-holders, and 3. Running the company by professional managers. These features of autonomous organisations and professional management have a considerable impact on the conduct of quality function. Each organisation determines independently what it will produce and what quality policies it will adopt. Marguardt divides the evolution of quality movement in USA in three periods: 1. Advocates for SQC- Emphasis on technical tools of control charts, lot inspection and sampling schemes. 2. Administrators for system of quality control- Emphasis on the cost of quality and managerial aspects of organizing the quality. 3. Advertising and selling quality consciousness-Emphasis on changing organizational culture and providing an environment that will enable people to activate and sustain in their own work and in products and services produced by the organistions with the focus on needs of customers. TQM in Service Industry ? TQM in Service Industry Introduction Today’s customer has before him the possibility of a wider choice of products & Services than ever before .He is going to be demanding & keen on having the best services in the shortest possible time & at the minimum cost .He will look for solutions that are more specific to his needs thus creating opportunity of many niche market. -Today customers avail ATM services 24 hrs -Book airline tickets & check-in over phone -Self-service at fast food restaurant. -And many more 28 What is different ? -Service is also a product of different kind . -No time delay between the production & delivery of service -A defective product can be replaced but a defective service may create a permanent damage. Growth of Service sector Service sector is growing rapidly due to -Change in environment , life style etc -Demand for new kind of services -Advent of new technologies -Fast development of information technology & computerisation -Lean manufacturing . (contracting out most activities) Challenge of Service sector Delight customers -In a dynamic environment which is changing fast -In growing competitive market -With relatively shorter product life cycle -Requiring more customisation Service Quality Dimensions Quality of Services differs from manufactured products -Special characteristics including intangibility. -Simultaneity ( promptness ) -Heterogeneity -Unique dimensions of some services (e.g. Banking) CHAPTER FOUR THE ESSENTIALS OF TQM Introduction TQM is the way of managing for the future, and is far wider in its application than just assuring product or service quality – it is a way of managing people and business processes to ensure complete customer satisfaction at every stage, 29 internally and externally. TQM, combined with effective leadership, results in an organization doing the right things right, first time. The core of TQM is the customer-supplier interfaces, both externally and internally, and at each interface lie a number of processes. This core must be surrounded by commitment to quality, communication of the quality message, and recognition of the need to change the culture of the organisation to create total quality. These are the foundations of TQM, and they are supported by the key management functions of people, processes and systems in the organisation. This section discusses each of these elements that, together, can make a total quality organisation. Other sections explain people, processes and systems in greater detail, all having the essential themes of commitment, culture and communication running through them. What is quality? 30 A frequently used definition of quality is “Delighting the customer by fully meeting their needs and expectations”. These may include performance, appearance, availability, delivery, reliability, maintainability,cost effectiveness and price. It is, therefore, imperative that the organisation knows what these needs and expectations are. In addition, having identified them, the organisation must understand them, and measure its own ability to meet them. Quality starts with market research – to establish the true requirements for the product or service and the true needs of the customers. However, for an organisation to be really effective, quality must span all functions, all people, all departments and all activities and be a common language for improvement. The cooperation of everyone at every interface is necessary to achieve a total quality organization, in the same way that the Japanese achieve this with company wide quality control. Customers and suppliers There exists in each department, each office, each home, a series of customers, suppliers and customer supplier interfaces. These are “the quality chains”, and they can be broken at any point by one person or one piece of equipment not meeting the requirements of the customer, internal or external. The failure usually finds its way to the interface between the organization and its external customer, or in the worst case, actually to the external customer. Failure to meet the requirements in any part of a quality chain has a way of multiplying, and failure in one part of the system creates problems elsewhere, leading to yet more failure and problems, and so the situation is exacerbated. The ability to meet customers’ (external and internal) requirements is vital. To achieve quality throughout an organization, every person in the quality chain must be trained to ask the following questions about every customer-supplier interface: Customers (internal and external) • Who are my customers? • What are their true needs and expectations? 31 • How do, or can, I find out what these are? • How can I measure my ability to meet their needs and expectations? • Do I have the capability to meet their needs and expectations? (If not, what must I do to improve this capability?) • Do I continually meet their needs and expectations? (If not, what prevents this from happening when the capability exists?) • How do I monitor changes in their needs and expectations? Suppliers (internal and external) • Who are my internal suppliers? • What are my true needs and expectations? • How do I communicate my needs and expectations to my suppliers? • Do my suppliers have the capability to measure and meet these needs and expectations? • How do I inform them of changes in my needs and expectations? As well as being fully aware of customers’ needs and expectations, each person must respect the needs and expectations of their suppliers. The ideal situation is an open partnership style relationship, where both parties share and benefit. Poor practices To be able to become a total quality organization, some of the bad practices must be recognized and corrected. These may include: • Leaders not giving clear direction • Not understanding, or ignoring competitive positioning 32 • Each department working only for itself • Trying to control people through systems • Confusing quality with grade • Accepting that a level of defects or errors is inevitable • Firefighting, reactive behaviour • The “It’s not my problem” attitude How many of these behaviours do you recognize in your organization? The essential components of TQM – commitment & leadership TQM is an approach to improving the competitiveness, effectiveness and flexibility of an organization for the benefit of all stakeholders. It is a way of planning, organizing and understanding each activity, and of removing all the wasted effort and energy that is routinely spent in organizations. It ensures the leaders adopt a strategic overview of quality and focus on prevention not detection of problems. Whilst it must involve everyone, to be successful, it must start at the top with the leaders of the organization. All senior managers must demonstrate their seriousness and commitment to quality, and middle managers must, as well as demonstrating their commitment, ensure they communicate the principles, strategies and benefits to the people for whom they have responsibility. Only then will the right attitudes spread throughout the organization. A fundamental requirement is a sound quality policy, supported by plans and facilities to implement it. 33 Leaders must take responsibility for preparing, reviewing and monitoring the policy, plus take part in regular improvements of it and ensure it is understood at all levels of the organization. Effective leadership starts with the development of a mission statement, followed by a strategy, which is translated into action plans down through the organization. These, combined with a TQM approach, should result in a quality organization, with satisfied customers and good business results. The 5 requirements for effective leadership are: • Developing and publishing corporate beliefs, values and objectives, often as a mission statement • Personal involvement and acting as role models for a culture of total quality • Developing clear and effective strategies and supporting plans for achieving the mission and objectives • Reviewing and improving the management system • Communicating, motivating and supporting people and encouraging effective employee participation The task of implementing TQM can be daunting. The following is a list of points that leaders should consider; they are a distillation of the various beliefs of some of the quality gurus: • The organisation needs a long-term commitment to continuous improvement. • Adopt the philosophy of zero errors/defects to change the culture to right first time • Train people to understand the customer/supplier relationships • Do not buy products or services on price alone – look at the total cost • Recognise that improvement of the systems must be managed 34 • Adopt modern methods of supervising and training – eliminate fear • Eliminate barriers between departments by managing the process – improve communications and teamwork • Eliminate goals without methods, standards based only on numbers, barriers to pride of workmanship and fiction – get facts by studying processes • Constantly educate and retrain – develop experts in the organisation • Develop a systematic approach to manage the implementation of TQM ? Culture change The failure to address the culture of an organisation is frequently the reason for many management initiatives either having limited success or failing altogether. Understanding the culture of an organisation, and using that knowledge to successfully map the steps needed to accomplish a successful change, is an important part of the quality journey. The culture in any organisation is formed by the beliefs, behaviours, norms, dominant values, rules and the “climate”. A culture change, e.g, from one of acceptance of a certain level of errors or defects to one of right first time, every time, needs two key elements: • Commitment from the leaders • Involvement of all of the organisation’s people There is widespread recognition that major change initiatives will not be successful without a culture of good teamwork and cooperation at all levels in an organisation, as discussed in the section on People. 35 ? The building blocks of TQM: processes, people, management systems and performance measurement Everything we do is a Process, which is the transformation of a set of inputs, which can include action, methods and operations, into the desired outputs, which satisfy the customers’ needs and expectations. In each area or function within an organisation there will be many processes taking place, and each can be analysed by an examination of the inputs and outputs to determine the action necessary to improve quality. In every organisation there are some very large processes, which are groups of smaller processes, called key or core business processes. These must be carried out well if an organisation is to achieve its mission and objectives. The section on Processes discusses processes and how to improve them, and Implementation covers how to prioritise and select the right process for improvement. 36 The only point at which true responsibility for performance and quality can lie is with the People who actually do the job or carry out the process, each of which has one or several suppliers and customers. An efficient and effective way to tackle process or quality improvement is through teamwork. However, people will not engage in improvement activities without commitment and recognition from the organisation’s leaders, a climate for improvement and a strategy that is implemented thoughtfully and effectively. The section on People expands on these issues, covering roles within teams, team selection and development and models for successful teamwork. An appropriate documented Quality Management System will help an organisation not only achieve the objectives set out in its policy and strategy, but also, and equally importantly, sustain and build upon them. It is imperative that the leaders take responsibility for the adoption and documentation of an appropriate management system in their organisation if they are serious about the quality 37 journey. The Systems section discusses the benefits of having such a system, how to set one up and successfully implement it. Once the strategic direction for the organisation’s quality journey has been set, it needs Performance Measures to monitor and control the journey, and to ensure the desired level of performance is being achieved and sustained. They can, and should be, established at all levels in the organisation, ideally being cascaded down and most effectively undertaken as team activities and this is discussed in the section on Performance. CHAPTER FIVE THE EFFECTS OF TQM ? Improving Financial Services through TQM 38 The work described in this case study was undertaken in a young, rapidly expanding company in the financial services sector with no previous experience with Total Quality Management (TQM). The quality project began with a two-day introductory awareness program covering concepts, cases, implementation strategies and imperatives of TQM. The program was conducted for the senior management team of the company. This program used interactive exercises and real life case studies to explain the concepts of TQM and to interest them in committing resources for a demonstration project. The demonstration project, which used the Seven Steps of Problem Solving (similar to DMAIC), was to show them how TQM concepts worked in practice before they committed resources for a company-wide program. Step 1. Define the Problem 1.1) Selecting the theme: A meeting of the senior management of the company was held. Brainstorming produced a list of more than 20 problems. The list was prioritized using the weighted average table, followed by a structured discussion to arrive at a consensus on the two most important themes -- customer service and sales productivity. Under the customer service theme, "Reducing the Turnaround Time from an Insurance Proposal to Policy" was selected as the most obvious and urgent problem. The company was young, and therefore had few claims to process so far. The proposal-to-policy process therefore impacted the greatest number of customers. An appropriate cross functional group was set up to tackle this problem. 1.2) Problem = customer desire – current status: Current status: What did the individual group members think the turnaround is currently? As each member began thinking questions came up. "What type of policies do we address?" Medical policies or non-medical? The latter are take longer because of the medical examination of the client required. "Between what stages do we consider turnaround?" Perceptions varied, with each person thinking about the turnaround within their department. The key process stages were mapped: 39 Several sales branches in different parts of the country sent proposals into the Central Processing Center. After considerable debate it was agreed at first to consider turnaround between entry into the computer system at the Company Sales Branch and dispatch to the customer from the Central Processing Center (CPC). Later the entire cycle could be included. The perception of the length of turnaround by different members of the team was recorded. It averaged: Non-Medical Policies Medical Policies 17 days 35 days Invoking the slogan from the awareness program "In God we trust, the rest of us bring data" the group was asked to collect data and establish reality. Armed with a suitably designed check sheet they set about the task. Customer desire: What was the turnaround desired by the customer? Since a customer survey was not available, individual group members were asked to think as customers -- imagine they had just given a completed proposal form to a sales agent. When would they expect the policy in hand? From the customer's point of view they realized that they did not differentiate between medical and non-medical policies. Their perception averaged out six days for the required turnaround. 40 "Is this the average time or maximum time that you expect?" they were asked. "Maximum," they responded. It was clear therefore that the average must be less than six days. The importance of "variability" had struck home. The concept of sigma was explained and was rapidly internalized. For 99.7 percent delivery within the customer limit the metric was defined. Customer desire: Average+3 Sigma turnaround = less than 6 days Current status: Non-medical policies (Average 19/Sigma 15) Average+3 sigma= 64 days Medical (Average 37/Sigma 27) Average+3 sigma= 118 days The Problem was therefore defined: Reduce Average+3 sigma of turnaround for: Non-Medical Policies From 64 to 6 days Medical Policies From 118 to 6 days The performance requirement appeared daunting. Therefore the initial target taken in the Mission Sheet (project charter) was to reduce the turnaround by 50 percent -to 32 and 59 days respectively. Step 2. Analysis of the Problem In a session the factors causing large turnaround times from the principles of JIT were explained. These were:Input arrival patterns • • • • • Waiting times in process - Batching of work - Imbalanced processing line - Too many handovers - Non-value added activities, etc. Processing times Scheduling Transport times Deployment of manpower 41 Typically it was found that waiting times constitute the bulk of processing turnaround times. Process Mapping (Value Stream Mapping in Lean) was undertaken. The aggregate results are summarized below: Number of operations 84 Number of handovers 13 In-house processing time (estimated) 126 man-mins. Range of individual stage time 2 to 13 mins. Could this be true? Could the turnaround be 126 minutes for internal processing without waiting? The group started to question of the status quo. The change process had begun. To check this estimate it was decided to collect data -- run two policies without waiting and record the time at each stage. The trial results amazed everyone: Policy No. 1 took 100 minutes and Policy No. 2 took 97 minutes. Almost instantly the mindset changed from doubt to desire: "Why can't we process every proposal in this way?" Step 3. Generating Ideas In the introductory program of TQM during the JIT session the advantages of flow versus batch processing had been dramatically demonstrated using a simple exercise. Using that background a balanced flow line was designed as follows: 1. Determine the station with the maximum time cycle which cannot be split up by reallocation -- 8 minutes. 2. Balance the line to make the time taken at each stage equal 8 minutes as far as possible. 3. Reduce the stages and handovers -- 13 to 8. 4. Eliminate non-value added activities -- transport -- make personnel sit next to each other. 5. Agree processing to be done in batch of one proposal. Changing the mindset of the employees so they will accept and welcome change is critical to building a self-sustaining culture of improvement. In this case, the line personnel were involved in a Quality Mindset Program so that they understood the reasons for change and the concepts behind them and are keen to experiment with new methods of working. The line was ready for a test run. 42 Step 4. Testing the Idea Testing in stages is a critical stage. It allows modification of ideas based upon practical experience and equally importantly ensures acceptance of the new methods gradually by the operating personnel. Stage 1: Run five proposals flowing through the system and confirm results. The test produced the following results: Average turnaround time: < 1 day In-house processing time: 76 mins. There was jubilation in the team. The productivity had increased by 24 percent. The head of the CPC summarized: "I gave five files for processing, and went for a meeting. Emerging from the meeting about 30 minutes later I was greeted by the dispatch clerk jubilantly reporting, "'Madam, the TQM files are ready for dispatch.'" The mindset was dramatically changed and line personnel were now keen to push the implementation. Stage 2: It was agreed to run the new system for five days -- and compute the average and sigma of the turnaround to measure the improvement. It was agreed that only in-house processing was covered at this stage and that the test would involve all policies at the CPC but only one branch as a model. This model, once proved, could be replicated at other branches. The test results showed a significant reduction in turnaround: 1. For all non-medical policies From 64 to 42 days or 34% 2. For policies of the model branch From 64 to 27 days of 60% The Mission Sheet goal of 50 percent reduction had been bettered for the combined model branch and CPC. Further analysis of the data revealed other measures which could reduce the turnaround further. Overall reduction reached an amazing 75 percent. Turnaround, which had been pegged at 64 days, was now happening at 99.7 percent on-time delivery in 15 days. 43 Step 5. Implementing the Ideas Regular operations with the new system was planned to commence. However, two weeks later it was still not implemented. One of the personnel on the line in CPC had been released by his department for the five-day trial to sit on the line but was not released on a regular basis. The departmental head had not attended the TQM awareness program and therefore did not understand why this change was required. There were two options -- mandate the change or change the mindset to accept the change. Since the latter option produces a robust implementation that will not break down under pressures it was agreed that the group would summarize TQM, the journey and the results obtained in the project so far and also simulate the process with a simple exercise in front of the department head. This session was highly successful and led to the release of the person concerned on a regular basis. Step 6. Check the Result The process was run for one month with regular checks. The results obtained were marginally better than the trials conducted in Step 5: Average 11 days Sigma 9 days Average+3 sigma 38 days Step 7. Standardize Control/Document the Improvement Story • Essentially the in-house processes in two centers of processing -- the CPC and one sales branch -- had been impacted so far. To make sure that the gains were held, control charts were introduced in both locations. Sample x-bar 44 and sigma-control charts for the CPC are shown below: • • • • • A special "Grind It In" session was conducted for line personnel to ensure that the control chart was updated every day, and any deterioration was dealt with by finding and killing the root causes of the problems. Customer reaction: Sales management and sales agents (internal customers) clearly noticed the difference. For instance one sales manager reported that a customer had received a policy within a week of giving a proposal and was so amazed that he said, "If you give such service I will give you the next policy also!" Adoption of a similar process at the CPC and the model branch for medical policies has already reduced the average+3 sigma of turnaround time by 70 percent -- from 118 days to 37 days. The corresponding all-India reduction was from 118 days to 71 days -- a 60 percent reduction. The project objective of 50 percent in the first stage has been achieved. A quality improvement story was compiled by the project Leader for training and motivating all employees. Future Actions 45 Non-medical policies: Goal to reduce turnaround from 42 days to about 15 days. 1. Roll out process to branches to achieve 24 days throughout the country. 2. Minimize rework by analyzing, prioritizing and training sales branches to avoid the causes of rework. 3. Working with the bank to improve the turnaround time of banking checks. 4. Considering processing proposals while check clearance is in progress. Medical policies: Goal to reduce turnaround from 71 days to about 24 days. 1. Roll out process to branches to reduce turnaround from 71 to 37 days. 2. Streamline the process of medical exam of the client from 37 to 24 days. 46 CHAPTER SIX IMPLEMENTATION OF TQM ? Implementation Principles and Processes A preliminary step in TQM implementation is to assess the organization's current reality. Relevant preconditions have to do with the organization's history, its current needs, precipitating events leading to TQM, and the existing employee quality of working life. If the current reality does not include important preconditions, TQM implementation should be delayed until the organization is in a state in which TQM is likely to succeed. If an organization has a track record of effective responsiveness to the environment, and if it has been able to successfully change the way it operates when needed, TQM will be easier to implement. If an organization has been historically reactive and has no skill at improving its operating systems, there will be both employee skepticism and a lack of skilled change agents. If this condition prevails, a comprehensive program of management and leadership development may be instituted. A management audit is a good assessment tool to identify current levels of organizational functioning and areas in need of change. An organization should be basically healthy before beginning TQM. If it has significant problems such as a very unstable funding base, weak administrative systems, lack of managerial skill, or poor employee morale, TQM would not be appropriate. However, a certain level of stress is probably desirable to initiate TQM. People need to feel a need for a change. Kanter (1983) addresses this phenomenon be describing building blocks which are present in effective organizational change. These forces include departures from tradition, a crisis or galvanizing event, strategic decisions, individual "prime movers," and action vehicles. Departures from tradition are activities, usually at lower levels of the organization, which occur when entrepreneurs move outside the normal ways of operating to solve a problem. A 47 crisis, if it is not too disabling, can also help create a sense of urgency which can mobilize people to act. In the case of TQM, this may be a funding cut or threat, or demands from consumers or other stakeholders for improved quality of service. After a crisis, a leader may intervene strategically by articulating a new vision of the future to help the organization deal with it. A plan to implement TQM may be such a strategic decision. Such a leader may then become a prime mover, who takes charge in championing the new idea and showing others how it will help them get where they want to go. Finally, action vehicles are needed and mechanisms or structures to enable the change to occur and become institutionalized. ? Steps in Managing the Transition Beckhard and Pritchard (1992) have outlined the basic steps in managing a transition to a new system such as TQM: identifying tasks to be done, creating necessary management structures, developing strategies for building commitment, designing mechanisms to communicate the change, and assigning resources. Task identification would include a study of present conditions (assessing current reality, as described above); assessing readiness, such as through a force field analysis; creating a model of the desired state, in this case, implementation of TQM; announcing the change goals to the organization; and assigning responsibilities and resources. This final step would include securing outside consultation and training and assigning someone within the organization to oversee the effort. This should be a responsibility of top management. In fact, the next step, designing transition management structures, is also a responsibility of top management. In fact, Cohen and Brand (1993) and Hyde (1992) assert that management must be heavily involved as leaders rather than relying on a separate staff person or function to shepherd the effort. An organization wide steering committee to oversee the effort may be appropriate. Developing commitment strategies was discussed above in the sections on resistance and on visionary leadership. To communicate the change, mechanisms beyond existing processes will need to be developed. Special all-staff meetings attended by executives, sometimes designed as input or dialog sessions, may be used to kick off the process, and TQM newsletters may be an effective ongoing communication tool to keep employees aware of activities and accomplishments. 48 Management of resources for the change effort is important with TQM because outside consultants will almost always be required. Choose consultants based on their prior relevant experience and their commitment to adapting the process to fit unique organizational needs. While consultants will be invaluable with initial training of staff and TQM system design, employees (management and others) should be actively involved in TQM implementation, perhaps after receiving training in change management which they can then pass on to other employees. A collaborative relationship with consultants and clear role definitions and specification of activities must be established. In summary, first assess preconditions and the current state of the organization to make sure the need for change is clear and that TQM is an appropriate strategy. Leadership styles and organizational culture must be congruent with TQM. If they are not, this should be worked on or TQM implementation should be avoided or delayed until favorable conditions exist. Remember that this will be a difficult, compreh
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Re: total quality management - February 7th, 2009

hey do u hav sum material or prjct on IMPLEMENTATION OF TQM and SHARING GAINS IN PRODUCTIVITY....if u cud hlp it wud b vry nyc of u..
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Re: total quality management - February 17th, 2009

hai i am jeniffer. i attached one project related to TQM. i hope, it ill be usefull to u.
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see this project .it will be really useful for u all.
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here is a ppt on quality management................
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Re: total quality management - August 3rd, 2010

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hey do u hav sum material or prjct on IMPLEMENTATION OF TQM and SHARING GAINS IN PRODUCTIVITY....if u cud hlp it wud b vry nyc of u..
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thank you............................................... ............................................
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Re: total quality management - March 17th, 2011

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see this project .it will be really useful for u all.
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