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Total Quality Management Concepts, Philosophies and

Frameworks

prepared byÖmer Saatçioğlu

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Effective management of quality requires the execution of three activities:

1. Quality Planning2. Quality Assurance3. Quality Control and Improvement

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Quality Planning• Strategic activity and it is just as vital to - Long term business success - Product development plan - Financial Plan - Marketing Plan - Utilization of human resources• Identify customer needs (voice of the customer)• Products and services must be developed• Determine how these products and services are realized• Planning for quality improvement

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Quality Assurance• Set of activities that ensures - the quality levels of products and services are properly maintained - supplier and customer quality issues are properly resolved

• Documentation of the quality system which involves four components

- policy (what is to be done) - procedures (focus on the methods and personnel) - work instructions - specifications - records (documentation of policies, procedures, work instructions)

• Development, maintenance and control of documentation

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Quality Control and Improvement

• Set up activities used to ensure that the products and services meet requirement and are improved on a continous basis

• SPC and design of experiments are the major tools

• Quality improvement is often done on a project-by project basis

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Leaders in the Quality Revolution

• W. Edwards Deming• Joseph M. Juran• Philip B. Crosby• Armand V. Feigenbaum• Kaoru Ishikawa• Genichi Taguchi

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1-4.1 Quality Philosophies and Management Strategies

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 JUSE 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 Chain ReactionImprove quality

Costs decrease

Productivity improves

Increase market share with better quality and lower prices

Stay in business

Provide jobs and more jobs

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Deming’s System of Profound Knowledge

• Appreciation for a system• Understanding variation• Theory of knowledge• Psychology

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Systems

• Most organizational processes are cross-functional

• Parts of a system must work together• Every system must have a purpose• Management must optimize the system

as a whole

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Theory of Knowledge• Knowledge is not possible without

theory• Experience alone does not establish a

theory, it only describes• Theory shows cause-and-effect

relationships that can be used for prediction

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Psychology• People are motivated intrinsically and

extrinsically• Fear is demotivating • Managers should develop pride and joy

in work

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Deming’s 14 Points1. Create constancy of purpose toward improvement 2. Adopt a new philosophy, recognize that we are in a time of

change, a new economic age3. Cease reliance on mass inspection to improve quality4. End the practice of awarding business on the basis of price

alone5. Improve constantly and forever the system of production and

service6. Institute training7. Improve leadership, recognize that the aim of supervision is

help people and equipment to do a better job8. Drive out fear9. Break down barriers between departments

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14 Points cont’d10. Eliminate slogans and targets for the workforce such as zero

defects11. Eliminate work standards12. Remove barriers that rob workers of the right to pride in the

quality of their work13. Institute a vigorous program of education and self-

improvement14. Put everyone to work to accomplish the transformation

Note that the 14 points are about change

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Deming’s Deadly Diseases1. Lack of constancy of purpose2. Emphasis on short-term profits3. Performance evaluation, merit rating, annual

reviews4. Mobility of management5. Running a company on visible figures alone6. Excessive medical costs for employee health care7. Excessive costs of warrantees

17Ch 3 - 13© 2000 by Prentice-Hall Inc

Russell/Taylor Oper Mgt 3/e

The Deming Wheel(or P-D-C-A Cycle)

Identify problemDevelop plan for improvement

Implement plan on test basis

Is the plan working

Institutionalize improvementContinue cycle

1. Plan

2. Do

3. Study / Check

4. Act

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Joseph M. Juran• Born in Romania (1904),

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. Planning2. Control3. Improvement

• These three processes are interrelated• Control versus breakthrough• Project-by-project improvement

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Phillip B. Crosby

Quality is free . . . :“Quality is free. It’s not a gift, but it is free. What costs money are the unquality things -- all the actions that involve not doing jobs right the first time.”

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Philip B. CrosbyAbsolutes of Quality Management:• Quality means conformance to requirements• Problems are functional in nature• There is no optimum level of defects• Cost of quality is the only useful measurement• Zero defects is the only performance standard

www.philipcrosby.com

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A.V. Feigenbaum

• Three Steps to Quality– Quality Leadership, with a strong focus

on planning– Modern Quality Technology, involving

the entire work force– Organizational Commitment, supported

by continuous training and motivation

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Kaoru Ishikawa

• Instrumental in developing Japanese quality strategy

• Influenced participative approaches involving all workers

• Advocated the use of simple visual tools and statistical techniques

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Genichi Taguchi• Pioneered a new perspective on quality based

on the economic value of being on target and reducing variation and dispelling the traditional view of conformance to specifications:

No Loss LossLoss

Tolerance

0.500 0.5200.480

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Total Quality

• People-focused management system• Focus on increasing customer satisfaction

and reducing costs• A systems approach that integrates

organizational functions and the entire supply chain

• Stresses learning and adaptation to change• Based on the scientific method

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Principles of Total Quality

• Customer and stakeholder focus• Participation and teamwork• Process focus and continuous

improvement...supported by an integrated organizational infrastructure, a set of management practices,and a set of tools and techniques

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Customer and Stakeholder Focus

• Customer is principal judge of quality• Organizations must first understand

customers’ needs and expectations in order to meet and exceed them

• Organizations must build relationships with customers

• Customers include employees and society at large

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Participation and Teamwork• Employees know their jobs best and therefore,

how to improve them• Management must develop the systems and

procedures that foster participation and teamwork

• Empowerment better serves customers, and creates trust and motivation

• Teamwork and partnerships must exist both horizontally and vertically

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Process Focus and Continuous Improvement

• A process is a sequence of activities that is intended to achieve some result

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Continuous Improvement

• Enhancing value through new products and services

• Reducing errors, defects, waste, and costs• Increasing productivity and effectiveness• Improving responsiveness and cycle time

performance

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Infrastructure, Practices, and Tools

Leadership Strategic HRM Process Data and information Leadership Strategic HRM Process Data and information Planning mgt. managementPlanning mgt. management

Performance TrainingPerformance Training appraisalappraisal

Trend chartTrend chartToolsTools

PracticesPractices

InfrastructureInfrastructure

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TQ Infrastructure

• Customer relationship management• Leadership and strategic planning• Human resources management• Process management• Data and information management

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Quality Systems and Standards

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ISO 9001:2000• Standart has eight clauses

1. Scope2. Normative References3. Definitions4. Quality management systems5. Management system6. Resource management7. Product (or service) realization8. Measurement, analysis and improvement

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ISO 9001:2000 cont’d• Clauses 4 through 8 are the most important, and

their key component and requirements are shown below table

• ISO Certification process focuses heavily on quality assurance

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ISO 9001:2000 requirements1. Quality management systems2. Management system3. Resource management4. Product (or service) realization5. Measurement, analysis and

improvement

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Quality Management System

• General requirements The organization shall establish, document, implement, and maintain

a quality management system and continually improve its effectiveness in accordance with the requirements of the international standart.

• General Documentation Quality management system documentation will include a quality

policy and quality objectives; a quality manual; documented procedures; documents to ensure effective planning, operation, and control of processes; and records required by the international standart

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Management System

• Management Commitment - Communication of meeting customer, statutory, and

regulatory requirements - Establishing a quality policy - Establishing quality objectives - Conducting management reviews - Ensuring that resources are available

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Management System cont’d• Top management shall ensure that customer requirements are

determined and are met with the aim of anhancing customer satisfaction

• Management shall establish a quality policy• Management shall ensure that quality objectives shall be

established. Management shall ensure that planning occurs for the quality management system

• Management shall ensure that responsibilities and authorities are defined and communicated

• Management shall review the quality management system at regular intervals

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Resource Management• The organization shall determine and provide needed

resources• Workers will be provided necessary education, training,

skills, and experience• The organization shall determine , provide, and maintain

the infrastructure needed to achieve conformity to product requirements

• The organization shall determine and manage the work environment needed to achieve conformity to product requirements

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Product or Service Realization

The organization shall • plan and develop processes needed for product or service realization• determine requirements as specified by customers• plan and control the design and development for its products or

services• ensure that a purchased material or product conforms to specified

purchase requirements• plan and carry out production and service under controlled conditions• determine the monitoring and measurements to be undertaken and the

monitoring and measuring devices needed to provide evidence of conformity of products or services to determined requirement

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Measurement, Analysis, and Improvement

The organization shall • plan and implement the monitoring, measurement,

analysis, and improvement process for continual improvement and conformity to requirements

• monitor information relating to customer perceptions• ensure that product that does not conform to requirements

is identified and controlled to prevent its unintended use or delivery

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Measurement, Analysis, and Improvement cont’d

The organization shall • determine, collect, and analyze data to demonstrate the

suitability and effectiveness of the quality management system, including- Customer satisfaction- Conformance data- Trend data- Supplier data

• Continually improve the effectiveness of the quality management system

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• The MBNQA process is a valuable assessment tool

• See Table 1-3 for Performance Excellence Criteria and point values

The Malcolm Baldrige National Quality Award

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1 Leadership 1201.1 Leadership System....................................................... 801.2 Company Responsibility and Citizenship......................... 40

2 Strategic Planning 852.1 Strategy Development Process............................................ 402.2 Company Strategy............................................................... 45

3 Customer and Market Focus 853.1 Customer and Market Knowledge......................................... 403.2 Customer Satisfaction and Relationship Enchantment............ 45

4 Information and Analysis 904.1 Measurement and Analysis of Performance.......................... 504.2 Information Management..................................................... 40

5 Human Resource Focus 805.1 Work Systems.................................................................... 355.2 Employee Education, Traning, and Development................... 255.3 Employee Well-Being and Satisfaction................................. 25

6 Process Management 856.1 Management of Product and Service Processes................... 456.2 Management of Business Processes.................................... 256.3 Management of Support Processes...................................... 15

7 Business Results 4507.1 Customer Results................................................................ 1257.2 Financial and Market Results............................................... 1257.3 Human Resource Results..................................................... 807.4 Organization Results........................................................... 120Total Points 1000

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ApplicationReceived by

NIST

Stage 1Independent

Review byExaminers

JudgesSelect for

ConsensusReview

Stage 2Independent

Review byExaminers

No

Yes

FeedbackReport toApplicant

A

AJudges

Select forSite Visit

FeedbackReport toApplicant

No

YesStage 3Site Visit

JudgesRecommend

Winner

No

FeedbackReport toApplicant

YesFeedback

Report

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The EFQM Excellence Model

Leadership10%

People9%

Processes14%

KeyPerformance

Results15%

Policy &Strategy

8%

Partnerships& Resources

9%

PeopleResults

9%

CustomerResults

20%

SoceityResults

6%

ENABLERS RESULTS

INNOVATION AND LEARNING

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Leadership• Leaders develop the mission, vission, values and ethics

and are role models of a culture of Excellence • Leaders are personally involved in ensuring the

organization’s management system is developed, implemented and continously improved

• Leaders interact with customers, partners and representatives of soceity

• Leaders reinforce a culture of excellence with the organization’s people

• Leaders identify and champion organization change

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Policy and Strategy• Policy and Strategy are based on the present and future

needs and expectations of stakeholders• Policy and Strategy are based on information from

performance measurement, research, learning and external related activities

• Policy and Strategy are developed, reviewed and updated

• Policy and Strategy are communicated and deployed through a framework of key processes

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People• People resources are planned, managed and

improved• People’s knowledge and compentencies are

identified, developed and sustained• People are involved and empowered• People and the organization have a dialogue• People are rewarded, recognised and cared for

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Partnerships and Resources• External Partnerships are managed• Finances are managed• Buildings, equipment and materials are

managed• Technology is managed• Information and knowledge are managed

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Processes• Processes are systematically designed and managed• Processes are improved, as needed, using innovation in

order to fully satisfy and generate increasing value for customers and other stakeholders

• Products and Services aredesigned and developed based on customer needs and expectations

• Products and Services are produced, delivered and serviced

• Customer relationships are managed and enhanced

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Customer, People, Soceity Results

• Perception Measures• Performance Measures

Key Performance Results• Key Performance Outcomes• Key Performance Indicators

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Six Sigma

• Use of statistics & other analytical tools has grown steadily for over 80 years

• Six-Sigma (origins at Motorola in 1987, expanded impact during 1990s to present)

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Focus of Six Sigma is on Process Improvement with an Emphasis on Achieving

Significant Business Impact• A process is an organized sequence of activities that

produces an output that adds value to the organization

• All work is performed in (interconnected) processes– Easy to see in some situations (manufacturing)– Harder in others

• Any process can be improved• An organized approach to improvement is necessary• The process focus is essential to Six Sigma

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What is Six Sigma?

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Why “Quality Improvement” is Important: A Simple Example

• A visit to a fast-food store: Hamburger (bun, meat, special sauce, cheese, pickle, onion, lettuce, tomato), fries, and drink.

• This product has 10 components - is 99% good okay?

10

4

12

{Single meal good} (0.99) 0.9044

Family of four, once a month: {All meals good} (0.9044) 0.6690

{All visits during the year good} (0.6690) 0.0080

P

P

P

10 4

12

{single meal good} (0.999) 0.9900, {Monthly visit good} (0.99) 0.9607

{All visits in the year good} (0.9607) 0.6186

P P

P

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Six Sigma Focus• Initially in manufacturing • Commercial applications

– Banking– Finance– Public sector – Services

• DFSS – Design for Six Sigma– Only so much improvement can be wrung out of an existing

system– New process design– New product design (engineering)

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Some Commercial Applications• Reducing average and variation of days outstanding on

accounts receivable• Managing costs of consultants (public accountants, lawyers)• Skip tracing• Credit scoring• Closing the books (faster, less variation)• Audit accuracy, account reconciliation • Forecasting• Inventory management• Tax filing• Payroll accuracy

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Six Sigma• A disciplined and analytical approach to process and product

improvement• Specialized roles for people; Champions, Master Black belts, Black

Belts, Green Belts• Top-down driven (Champions from each business)• BBs and MBBs have responsibility (project definition, leadership,

training/mentoring, team facilitation)• Involves a five-step process (DMAIC) :

– Define – Measure– Analyze– Improve– Control

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What Makes it Work?

• Successful implementations characterized by:– Committed leadership– Use of top talent– Supporting infrastructure

• Formal project selection process• Formal project review process• Dedicated resources• Financial system integration

• Project-by-project improvement strategy (borrowed from Juran)

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OVERALL PROGRAMS

LEAN Variation Reduction• Predictability• Feasibility• Efficiency• Capability• Accuracy

• Flow Mapping • Waste Elimination• Cycle Time• WIP Reduction• Operations and

Design

Lean

Lead-time Capable

DMAICELIMINATE

WASTE, IMPROVE

CYCLE TIME

DESIGN PREDICTIVE

QUALITY INTO PRODUCTS

ELIMINATE DEFECTS, REDUCE

VARIABILITY

DFSS

Robust

• Requirements allocation• Capability assessment• Robust Design• Predictable Product Quality

Design for Six Sigma

The “I” in DMAIC may become DFSS

The Process Improvement Triad: DFSS, Lean, and DMAIC

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DFSS Matches Customer Needswith Capability

• Mean and variability affects product performance and cost– Designers can predict costs and yields in the design phase

• Consider mean and variability in the design phase– Establish top level mean, variability and failure rate targets for

a design– Rationally allocate mean, variability, and failure rate targets to

subsystem and component levels– Match requirements against process capability and identify gaps – Close gaps to optimize a producible design– Identify variability drivers and optimize designs or make designs

robust to variability• Process capability impact design decisionsDFSS enhances product design methods.

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Lean Focuses on Waste Elimination

• Definition• A set of methods and tools used to eliminate waste in a

process• Lean helps identify anything not absolutely required to

deliver a quality product on time.

• Benefits of using Lean• Lean methods help reduce inventory, lead time, and cost• Lean methods increase productivity, quality, on time

delivery, capacity, and sales

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DMAIC Solves Problems by UsingSix Sigma Tools

• DMAIC is a problem solving methodology

• Use this method to solve problems:– Define problems in processes– Measure performance– Analyze causes of problems– Improve processesremove variations and nonvalue-

added activities– Control processes so problems do not recur

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Six Sigma

• DMAIC is closely related to the Shewhart cycle (variously called the Deming cycle, or the PDCA cycle)