tqm%5b1%5d

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E.H. Aghezzaf-Vakgroep Technische Bedrijfsvoering (TW18V)

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Total Quality ManagementTotal Quality Management

Steps Towards Continuous Improvement


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Total Quality ManagementTotal Quality Management

• Total Quality Management is a comprehensive managerial philosophy and a collection of approaches and tools for its implementation.

• The term Total Quality Management conveys de company-wide effort through full involvement of the entire workforce and focus on continuous improvement that companies use to achieve customer satisfaction.

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Goals of TQMGoals of TQM

• Satisfy the requirements and needs of customers.• Prevent poor quality rather than correcting

problems after fact.• Develop an attitude of continuous improvement

in operations.• Understand the value of measuring performance

in identifying opportunities and maintaining improvements.

• Identify and eliminate chronic sources of inefficiencies and costs.


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Foundations of TQM,Foundations of TQM,the Principlesthe Principles

• Customer Focus: – Involves collection and analysis of customer needs, and

once understood and accepted these must be met.

• Continuous Improvement:– Involves work on the process to reduce the variability of

output and improve the reliability of the process.

• Total Involvement (Participation & Teamwork):– Begins with leadership of senior management, then

employees empowerment, and includes suppliers.

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Foundations of TQM, Foundations of TQM, Infrastructures, Practices, and Infrastructures, Practices, and

ToolsTools• An integrated organizational infrastructure,• A set of management practices, • A wide variety of tools and techniques:

– Leadership, – Strategic Planning,– Data and Information Management,– Process Management,– Supplier Management,– Human Resources Management,


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Towards an Integrated Towards an Integrated Production SystemProduction System

Quality assured through inspection:• Inspect incoming materials,• Inspect outgoing products,• Quality is the responsibility of QA

department,

Quality designed through prevention:• Integrated customer-supplier chain,• Improve quality through the system,• Quality is responsibility of everyone,

Traditional MethodProduct Management

Modern MethodProcess Management

Work Process

Inspect

Inspect

input output

Waste Waste

WorkProcess

PeopleProcesses

input input

Information Information

Suppliers Customers Suppliers Customers

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Measurement DimensionsMeasurement Dimensions

• Customer

• Shareholder

• Employee

• Community

Customers

BossesOwners

Financial Analysts

Employees

Government agentsSocial services

• Customer satisfaction,• Output characteristics defined

by customers,

• Financial indicators,– Cost, sales, and profits– Cost of quality

• Goals and objectives defined by management,

• Employee satisfaction,• Factors contributing to job

satisfaction,

• Regulatory compliance,• Factors impacting on society,

If this is … then this who … and these

your focus... you need to please are key Measures


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The TQM SystemThe TQM System

LeadershipEducation and Training Supportive StructuresRewards and recognition Communication

Measurement

TotalInvolvement

TQMContinuous Improvement

CustomerFocus

ProcessImprovement

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Measurement

TotalInvolvement


CustomerFocus

ProcessImprovement


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Customer Focus Customer Focus --Leading PracticesLeading Practices--• Define, identify, and segment key customer groups

and markets,• Understand customer needs and expectations (the

voice of the customer),• Understand linkages between the voice of the

customer and design, production, and delivery,• Build relationships through commitments, provide

accessibility and information, set service standards, and follow-up on transactions,

• Develop and implement effective complaint management processes,

• Measure customer satisfaction for improvement,

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Identifying CustomersIdentifying Customers

Key customer groups:• Organization level:

– Consumers, – External customers, – Employees, – Society

• Process level: – Internal customer units or groups,

• Performer level: – Individual internal customers,


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Understanding Customer Understanding Customer ExpectationsExpectations

• Guidelines:– What are the product and service characteristics

do customers want?– What level of performance is required to satisfy

customers expectations?– What is the relative importance of these

characteristics?– How satisfied are customers with performance

at the current level?

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Implicit, Explicit, and Latent Customer Requirements

Options and trade-offsavailable for selection by

customers

Value-addedcharacteristics and features that

customer did not expect

Level 3

Minimum performancelevels always assumed

present

Specificationsand

Requirements

Base Expectations

Explicit

Implicit

Latent

Delight!

Level 2

Level 1

Ref- TQM, A.R.Tenner & I.J.DeToro


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measurement and feedback

Customer needs and expectations(Expected quality)

Identification of customer needs

Translation into product/service specifications(Design quality)

Output (Actual quality)

Customer perceptions (Perceived quality)

PERCEIVED QUALITY = ACTUAL - EXPECTED

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Linking Voice of Customer to Linking Voice of Customer to Design, Production, and DeliveryDesign, Production, and Delivery

Quality Function Deployment HOQ

Technical requirements

Voice ofthe

customer

Relationship matrix

Technical requirementpriorities

Customerrequirement

priorities

Competitiveevaluation

Interrelationships


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The Quality Function Deployment The Quality Function Deployment

ProcessProcess

Technicalrequirements

Componentcharacteristics

Processoperations

Quality plan

Linking Voice of Customer to Linking Voice of Customer to Design, Production, and DeliveryDesign, Production, and Delivery

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Build Customer Relationships: Build Customer Relationships: Gathering InformationGathering Information

• Comment cards and formal surveys: These approaches concentrate on measuring customer satisfaction.

• Focus groups: A panel of individuals who answer questions about a company’s products and services.

• Direct customer contacts: Hearing complaints directly by top-executives is an eye-opening experience.

• Field intelligence: Conversing with customers and observing their behavior helps in gaining useful information.

• Study complaints: Helps in understanding de gaps between expectations and performance


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Customer Relationships Customer Relationships ManagementManagement

• Accessibility and commitments,• Selecting and developing customer contact

employees through empowerment and training,

• Customer focused service based on relevant customer contact requirements,

• Effective complaint management,• Strategic partnerships and alliances,

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Effective Complaint Management Effective Complaint Management ProcessesProcesses

Approach

Level 3

Personal interviews, Focus GroupsDesigned Suveys

Benchmarking

Reactive Proactive

High

Low

Maximum Levelof

UndestandingLevel 2

Service Desk Networks Hot Line Sales Data Analysis Unstructured Surveys Customer Representatives

Level 1

Unsolicited Complaints

FullUnderstanding


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Measuring Customer Measuring Customer SatisfactionSatisfaction

• Discover customer perceptions of company’s performance through identification of appropriate quality dimensions and measurement schemes,

• Compare company’s performance relative to leading competitors,

• Measure potential and former customers and identify areas for improvement,

• Track trends to determine if changes result in improvements,

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• Product and service quality dimensions– Access– Communication– Competence– Courtesy– Credibility– Reliability– Responsiveness

Word ofMouth

Personal Needs

Past Experience

Expected Performance

External Communication

to Customers

Perceived Product/Service

Quality

QualityPerformance

Gap

Perceived Performance



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Word-of-Mouthcommunications Personal Needs Past Experience

Expected Performance

Product/Service Quality Specifications

Management Perceptions of Customer Expectations

External Communication

to Customers

Perceived Performance

Delivery Performance

Customer

Provider

Gap 1

Gap 2

Gap 3Gap 4

Gap 5


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Measurement

TotalInvolvement


CustomerFocus

ProcessImprovement

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Scope of Process ManagementScope of Process ManagementScope of Process Management

• Process Management: involves planning and administering the activities – design, control, and improvement – necessary to achieve a high level of performance,

• There are four types of key processes:– Design processes,– Production/delivery processes,– Support processes,– Supplier processes,

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• Translate customer requirements and internal capabilities into product and service design requirements early in the process,

• Ensure that quality is built into products and services and use appropriate tools during development,

• Manage product development process to enhance communication, reduce time, and ensure quality,

• Define, document, and manage important production/delivery and support processes,

Process Management Process Management --Leading Leading

PracticesPractices--

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• Define performance requirements for suppliers and ensure that they are met,

• Control the quality and operational performance of key processes and use systematic methods to identify variations, determine root causes, and make corrections,

• Continuously improve processes to achieve better quality, cycle time, and overall operational performance,

• Innovate to achieve breakthrough performance using benchmarking and reengineering,

Process Management Process Management --Leading Leading

PracticesPractices--

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Process Improvement StepsProcess Improvement Steps

• Defining key processes: Identify the processes that have the greatest impact on customer-driven performance standards .

• Planning: Establish a structured and disciplined approach to define and document the major components in the process and to understand their interrelationships.

• Control: Assure effectiveness so that the output is predictable and consistent with the customers’ expectations.


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Process Improvement StepsProcess Improvement Steps

• Measurement: Map performance attributes to customers’ requirements and establish criteria for accuracy, precision, and frequency of data acquisition.

• Improvement: Increase effectiveness of the process by permanently embedding identified improvements.

• Optimization: Increase efficiency and productivity of the key processes by optimizing the resources.

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Identifying Key ProcessesIdentifying Key Processes

Developing & Understanding

Markets

Developing & Designing

(R&D - Engineering)

Marketing & Sales

ProducingProducts & Services

Distributing & Delivering

Installation & Services(Maintenance + Repair)

Attracting Developing and Retaining People

Legal Services

Finance & Accounting

ManagementInformation

Systems

Business Planning


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Planning and Documenting a Planning and Documenting a Process Process --Flow DiagramsFlow Diagrams--

* = Points critical to the success of the service † = Points at which failure is most often experienced

Customer drops off

car

Mechanic makes

diagnosis*

Discuss needed

work with customer*

Customer departs with car

Collect payment

Notify customer

Checkparts

availability†

Order parts

Repair complete

Repair not authorized

Parts available

Service visible to customerRepair

authorized

Service not visible to customer

Perform work†

Inspect/ test and repair

Perform corrected

work

Corrective work

necessary

Parts not available

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Process: Emergency room admissionSubject: Ankle injury patientBeginning: Enter emergency roomEnding: Leave hospital

1 0.50 15 X Enter emergency room, approach patient window, 2 10.0 - X Sit down and fill out patient history,3 0.75 40 X Nurse escorts patient to ER triage room,4 3.00 - X Nurse inspects injury,5 0.75 40 X Return to waiting room,

6 1.00 - X Wait for available bed, 7 1.00 60 X Go to ER bed,8 4.00 - X Wait for doctor,9 5.00 - X Doctor inspects injury and questions patient,

10 2.00 200 X Nurse takes patient to radiology,

11 3.00 - X Technician x-rays patient,12 2.00 200 X Return to bed in ER,13 3.00 - X Wait for doctor to return,14 2.00 - X Doctor provides diagnosis and advice,15 1.00 60 X Return to emergency entrance area,

16 4.00 - X Check out,17 2.00 180 X Walk to pharmacy,18 4.00 - X Pick up prescription, 19 1.00 20 X Leave the building,

Step no.

Time (min)

Distance (ft)

Summary

Number of stepsActivity Time

(min)Distance

(ft)

Transport 9 11 815 Operation 5 23 —

Inspect 2 8 —

Store — — —Delay 3 8 —

Step description

Insert Step

Append Step

Remove Step

Planning and Documenting a Planning and Documenting a Process Process --Process ChartsProcess Charts--


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Evaluating a Process -Diagnosis-

• Are steps arranged in a logical sequence?• Do all steps add value? Can some be eliminated

or added? Can some be combined? Should some be reordered?

• Are capacities in balance? What skills, equipment, and tools are required at each step?

• At which points might errors occur and how can they be corrected?

• At which points should quality be measured?• What procedures should employees follow where

customer interaction occurs?

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Controlling a ProcessControlling Controlling a a ProcessProcess

• Process control consists in continually evaluating performance and taking corrective action when necessary,

• Components of control systems:– Standards and goals,– Means of measuring accomplishments,– Comparison of the results with the standard as a

basis for corrective action,

• A well-controlled system is predictable,


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Generic Quality Control SystemGeneric Quality Control SystemInputs

(Materials) Processes

Inspection & Measurement

Identify Causes

Comparison with

Standards

Comparison with

Standards

Comparison with

Standards



Output(Products)

AcceptableQuality

AcceptableQuality

AcceptableQuality

Cor

rect

ives

Act

ions

Cor

rect

ives

Act

ions

Pro

cess

-rel

ated

Yes

No No No

YesYes

Mat

eria

ls-r

elat

ed

• What was supposed to happen? What actually happened?

• Why is there a difference? What can we learn?

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Process ImprovementProcess Improvement• Productivity improvement,• Work simplification,• Planned methods change,

• Kaizen,• Stretch goals,• Benchmarking,• Reengineering,

Traditional Industrial Engineering

New approaches from the total quality movement


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Process ImprovementProcess ImprovementSupplier Management &

development Customer

Identify Quality ProblemsCategorize &Set priorities

Select a Quality Problem

Analyze the QualityProblem Causes

Collect Relevante Data &Diagnose for Causes

Confirme the QualityProblem Causes

Develop CorrectiveActions, Solutions& New Objectives

Remove the QualityProblem Causes

Test,Evaluate &

Implement Solutions

Input Output Input Outpu t Input Output

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The Quality Circle ProcessThe Quality Circle ProcessOrganization

8-10 membersSame area Moderator

PresentationImplementation

monitoring

SolutionProblem results

Problem analysisCause & effect

Data collection & analysis

Problem IDList alternatives

Consensus Brainstorming

TrainingGroup processes Data collection Problem analysis


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Tools for Process ImprovementTools for Process Improvement

Histogram

0

5

10

15

20

1 2 6 13 10 16 19 17 12 16 20 17 13 5 6 2 1

Nu

mb

er o

f def

ects

100

80

60

40

20

0

50

40

30

20

10

0

Cu

mu

lati

ve p

erce

nta

ge

Defect type

C

DA B

Poo

r D

esig

n

Def

ectiv

e P

arts

Headliner Defects

Defect type Tally Total

A. Tears in fabric //// 4

B. Discolored fabric /// 3

C. Broken fiber board //// //// //// //////// //// //// / 36

D. Ragged edges //// // 7

Total 50

Pareto Chart

Checklists

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Tools for Process ImprovementTools for Process Improvement

Parametervalues

Characteristics

values

Scatter Diagram

Nu

mb

er o

f def

ects

First Second ThirdShift

20

15

10

05

00

Control ChartsBar Chart


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Tools for Improving QualityTools for Improving Quality

Cause-and-Effect Analysis

QualityProblem

MachinesMeasurement Human

ProcessEnvironment Materials

Faulty testing equipment

Incorrect specifications

Improper methods

Poor supervision

Lack of concentration

Inadequate training

Out of adjustment

Tooling problems

Old or Worn

Defective from vendor

Not to specifications

Material-handling problems

Deficienciesin product design

Ineffective qualitymanagement

Poor process design

Inaccuratetemperature

control

Dust and Dirt

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Performance MeasurementPerformance MeasurementPerformance Parameters

Operations that Control Products or Services

Produced and delivered

Customer Satisfaction

Degree to which Products or Servicesare Perceived to Meet Expectations

Requirements

Features, Valuesand Characteristics

Desired by Cusmoters

Capability

Features, Valuesand Characteristics

Delivered by Process

Suppliers CustomersWork Groups

Process

Output

Outcome

Work


levelslevels


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Process MeasurementProcess MeasurementFlexibility MeasuresFlexibility Measures

Degree of empowerment,

Percentage of events in which customers expectations are exceeded,

Degree of difficulty to respond to special requests,

Degree of authority people have to continuously improve the process,

Amount of time it takes to adjust the process to handle new requirements,

Number of pre-planned process scenarios,

Effectiveness MeasuresEffectiveness Measures

Product Appearance, Performance,

Reliability, Timeliness,

Usability,

Serviceability,

Durability,Cost,

Responsiveness,Dependability,

Accuracy,Adaptability,

Efficiency MeasuresEfficiency Measures

Process Cycle Time,

Resources used per unit of output,

Value Added cost per unit of output,

Ratio of value added to non-value added time,

Cost of poor quality,

Wait and delay time per unit of output,

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Breakthrough ImprovementBreakthrough Improvement

• Occasional change resulting from innovative and creative thinking,

• Benchmarking: The search of industry best practices that lead to superior performance,– Competitive benchmarking,– Process benchmarking,– Strategic benchmarking,

• Reengineering: Radical redesign of processes,


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Breakthrough ImprovementBreakthrough Improvement

Exp

ecte

d Im

pac

tIn

crea

men

tal

Bre

akth

rou

gh

Ongoing Periodic Occasional Application Frequency

Co

nti

nu

ou

sIm

prov

emen

t

Ben

chm

arki

ng

Ree

ng

inee

rin

g

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Measurement

TotalInvolvement


CustomerFocus

ProcessImprovement


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Total InvolvementTotal Involvement

• Human Resources,– Leadership,– Empowerment,– Employee Involvement,– Teamwork and work systems,

• Suppliers Quality,

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LeadershipLeadership

• The ability to positively influence people and systems to have a meaningful impact and achieve results,

• Leadership System:– Refers to how decisions are made,

communicated, and carried out at all levels; mechanisms for leadership development, self-examination, and improvement,

– Effectiveness of leadership system depends in part on its organizational structure,

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Leadership – Leading Practices –Leadership Leadership –– Leading PracticesLeading Practices ––

• Create a customer-focused strategic vision and clear quality values,

• Create and sustain leadership system and environment for empowerment, innovation, and organizational learning,

• Set high expectations and demonstrate personal commitment and involvement in quality,

• Integrate quality values into daily leadership and management and communicate extensively,

• Integrate public responsibilities and community support into business practices,

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Leadership TheoriesLeadership Theories

• Trait approach,• Behavioral approach,• Contingency approach,• Role approach,• Emerging theories:

– Attributional theory,– Transactional theory,– Transformational leadership theory,– Substitutes for leadership theory,– Emotional intelligence theory,

Leading

VisionAlign

Empowercoachcare

Managing

PlanOrganize

DirectCoordinate

Control

GettingResults

ImprovingSystems


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LeadershipLeadership

Foundation(Direction)

Commitment

Allocate resourcesconsistent with leadership

framework

Style

Role model- how we willbehave

ObjectivesWhat is to be acheived inscheduled period of time

GoalWhat is to be acheived

through sustained effortsover long period of time

MissionThe purpose or the reason

for the existance of thebusiness

MethodologyHow objectives will be

acheived through strategyand plans

PoliticyStatement of principles that

guide how all businessactivities are to function

ValuesDefine how we will behave

by delineating sharedbeliefs

VisionWhat we will look like in sucessful future

state

Implement(Action)

Specific Intent

Broad Intent

Do the right things(What to do)

Doing things right(How to do it)


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Human Resource ParadigmsHuman Resource Paradigms–– EmpowermentEmpowerment ––

• Old Thinking:– People are part of the process,– Process requires external control,– Managers have to control what people do,

• New Thinking:– People design and improve processes,– Workers who run the process control it,– Managers must obtain commitment of workers,


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EmpowermentEmpowerment–– Leading PracticesLeading Practices ––

• Promote cooperation and collaboration through teamwork,

• Empower individuals and teams to make decisions that affect quality and customer satisfaction,

• Make extensive investments in training and education,

• Maintain a work environment conducive to the well-being and growth of all employees,

• Monitor extent and effectiveness of HR practices and measure employee satisfaction,

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EmpowermentEmpowerment

Alig

nm

ent

Capab

ility

Trust

Empowerment in three Dimensions

- Capability- Alignment- Trust

Build CapabilityIndividuals System- Ability - Materials - Skills - Methods- Knowledge - Machines


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EmpowermentEmpowerment

Build Alignment

1. Teach your mission, vision, values, and objectives,

2. Build everyone's commitment to them,

Alig

nm

ent

Trust

Without alignment and trust theorganization will suffer with paralisis,

bureaucracy, or chaos.

Build Mutual TrustEmployees feel that:

1. They can trust their managers,2. Thier managers trust them,

Bureaucracy

Paralysis

Empowerment

Chaos

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Measuring EmployeeMeasuring EmployeeSatisfaction and EffectivenessSatisfaction and Effectiveness

• Satisfaction,– Quality of work-life, training, teamwork,

leadership, communications, compensation, benefits, internal suppliers and customers,

• Effectiveness,– Team and individual behavior, cost, quality,

and productivity improvements, employee turnover; suggestions, training effectiveness,

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Supplier and Partnering Processes

Supplier and Partnering Supplier and Partnering ProcessesProcesses

• Recognize the strategic importance of suppliers,

• Develop win-win relationships throughstrong partnerships,

• Establish trust through openness and honesty,

• Reduce number of suppliers and integrate the important once and eliminate the others,

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Suppliers QualitySuppliers Quality

• “Certified supplier” – one that, after extensive investigation, is found to supply material of such quality that routine testing on each lot received is unnecessary,

• Benefits of Effective Supplier Process Management:

– Reduced costs and faster time to market,– Increased access to technology,– Reduced supplier risk and improved quality,


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Strategies for qualityStrategies for quality

CustomerFocus

ProcessImprovement

TotalInvolvement

ContinuousImprovement

Strategies and Plans

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Linking the Strategic Planning To Linking the Strategic Planning To Process ManagementProcess Management

DesiredBusiness Strategy

Operations Strategy

DesiredCapabilities

Marketing, …, Financial Strategy

Desired Operational Structure: Processes &

Infrastructure

Product Attributes

Price, Time, Quality, Variety

Process Attributes

Cost, Time, Quality,

Flexibility

Existing Capabilities

Current Operational Structure: Processes &

Infrastructure

Existing Desired

FeasibleBusiness Strategies

Strategy Gap?

Measures

Capability Gap?

Process Gap?


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The TQM The TQM Strategic ModelStrategic Model

Business/Activity

MissionVisionValues

Goals

Critical successfactors

Objectives

Competitive Analysis Strengths/Weaknesses

Assumptions

Strategies

Programs

OrganizationProjects Budgets/Resources

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Objective QualityObjective Quality

Top managementConsensus

Generalised Educationand training

From Problem Solvingto Process Control

Quality ManagementPolicies

Deployment

Integration of qualityManagement

&Business Strategies

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4

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Strategic PlanningStrategic Planning

GuidelineGuideliness

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Strategic Management

• The Strategic Management is a long-term, future oriented process of assessment, goal setting, and decision-making that maps an explicit path between the present and a vision of the future.

• This process relies on careful consideration of an organization’s capabilities and the environment.

• This process leads also to priority-based resource allocation for achieving the organization’s mission.


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Vision

• A vision is an inspiring picture of a preferred future, not bound by time. It represents global and continuing purposes. It serves as a foundation for strategic planning.

• A vision would depict an ideal future for the organization and the contributions that it can make to that end.

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Goals

• The general ends toward which the organization directs its efforts.

• They address the primary issues facing the organization within broad grouping of interrelated concerns.

• They are founded on the vision and may involve coordination among several department with similar functions.


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Mission

• The reason for an organization’s existence. it succinctly identifies what the organization does, why, and for whom it does it.

• A mission reminds everyone in the organization, and also outside, of the unique purposes promoted and served by the organization.

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Objectives

• Objectives are clear targets for specific action. • They are more detailed than goals, they have

shorter time frames, and may state a quantity. • They are achievable, measurable, and they set the

direction for strategies. • A single goal may be subdivided into multiple

objectives.


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Strategy

• Strategies are the methods to achieve goals and objectives.

• The means of transforming inputs into outputs, and ultimately outcomes, with the best use of resources.

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Performance Measures

Indicators of the work performed and the results achieved. Can divided into:

• Output measures• Outcomes measures• Input measures• Efficiency measures


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Output Measures

• Outputs are the goods and services produced by an organization.

• Output measures are the tools, or indicators, to count the services and goods produced by an organization.

• The number of people receiving a service, or unit produced, or the number of services and customer delivered are often used as measures of output.

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Development Guides

• Is the output reliably measurable?• Is the output measure directly related to the

organization's strategies?• Does the output measure show the quantity

of work performed? • Can the measure be stated in unit cost

terms?• Is the output measure clear?


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Outcome Measures

• Outcomes are the quantified results, or impacts, of organization action.

• Outcome measures are tools, or indicators, to assess the actual impact of an organization’s action.

• A means for quantified comparison between the actual results and the intended result.

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Development Guides

• Is the outcome measure directly related to the organization’s goals.

• Is the outcome reliably measurable?• Does the outcome measure show what change

(difference) the organization’s action will have on the target group or problem?

• Can the organization gather data for the outcome measure without incurring excessive costs or undertaking cumbersome procedures?

• Is the outcome measure clear?


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Output versus Outcome Measures

• Percentage of high school graduates (output measure) is not the same as the percentage of students with a certain level of mastery of subjects (outcome measure).

• The number of patients treated and discharged from a state mental hospital (output measure) is not the same as the number of discharged patients who are capable of living independently (outcome measure).

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Input Measures• The resources that an organization uses to produce

products and services, including human, financial, facility, or material resources.– Number of €’s expended – Kilograms of material used

• Also includes measures of the scope of an organization’s operations:– Number of clients eligible for services– Number of entities subject to inspection/regulation– Number of applications or order received


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Efficiency Measures

• Indicators that measure the cost, unit cost or productivity associated with a given outcome or output.

– Average cost per client served– Average cost per inspection– Average time to process an order

tqm%5b1%5d

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