total quality management in doing business

total quality management

1. TOTAL QUALITY MANAGEMENT Prepared by: JEFFREY G. ESTILLORE YSCELINE L. ESPITAL

2. LEARNING OBJECTIVES: Define quality and TQM Describe the ISO international quality standards Explain Six Sigma Explain how benchmarking is used in TQM Explain quality robust products and Taguchi concepts Use the seven tools of TQM

3. Total - made up of the whole Quality - degree of excellence a product or service provides Management - act, art or manner of planning, controlling, directing,…. Therefore , TQM is the art of managing the whole to achieve excellence.

4. QUALITY I mprovements in quality help firms increase sales and reduce costs, both of which can increase profitability. Source: Heizer

5. QUALITY L ack of quality, affects the entire organization from supplier to customer and from product design to maintenance. A successful quality strategy begins with an organizational culture that fosters quality, followed by an understanding of the principles of quality, and then engaging employees in the necessary activities to implement quality. The ultimate goal is to win customers Source: Heizer

6. QUALITY Source: Heizer KEY DIMENSIONS OF QUALITY

7. The Concept of TQM • Produce quality work the first time . • Focus on the customer . • Have a strategic approach to improvement. • Improve continuously . • Encourage mutual respect and teamwork.

8. Characteristics of TQM  Committed management.  Adopting and communicating about total quality management .  Closer customer relations .  Closer provider relations.  Benchmarking.  Increased training.  Open organization  Employee empowerment.  Flexible production.  Process improvements.  Process measuring

9. The three aspects of TQM Counting - Tools, techniques, and training in their use for analyzing, understanding, and solving quality problems Customers - Quality for the customer as a driving force and central concern . Culture - Shared values and beliefs, expressed by leaders, that define and support quality.

10. Principles of tqm 1. Produce quality work the first time and every time. 2 . Focus on the customer . 3 . Have a strategic approach to improvement. 4 . Improve continuously . 5 . Encourage mutual respect and teamwork

11. The key elements of the TQM  Focus on the customer.  Employee involvement  Continuous improvement

12. QUALITY AND STRATEGY Source: Heizer

13. The Flow of Activities Necessary to Achieve Total Quality Management Source: Heizer

14. Garvin’s Five Definitions of Quality (Different Views of Quality Source: Heizer Transcendent Definition (Relative quality) Product-based definition User-based definition Manufacturing-based definition Value-based definition

15. Implications of Quality Source: Heizer

16. Costs of Quality Source: Heizer Cost of quality ( COQ) – The cost of doing things wrong—that is, the price of nonconformance . 1) Prevention costs: costs associated with reducing the potential for defective parts or services (e.g., training, quality improvement programs). 2) Appraisal costs : costs related to evaluating products, processes, parts, and services (e.g., testing, labs, inspectors). 3) Internal failure costs : costs that result from production of defective parts or services before delivery to customers (e.g., rework, scrap, downtime). 4) External failure costs : costs that occur after delivery of defective parts or services (e.g., rework, returned goods, liabilities, lost goodwill, costs to society).

17. Costs of Quality Source: Heizer The first three costs can be reasonably estimated, but external costs are very hard to quantify.

18. TOTAL QUALITY MANAGEMENT Source: Heizer Encompasses entire organization, from supplier to customer. Stresses a commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer .

19. Quality expert W. Edwards Deming used 14 points (see Table 6.2 ) to indicate how he implemented TQM Source: Heizer

20. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM Source: Heizer

21. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM CONTINUOUS IMPROVEMENT Represents continual improvement of all processes Involves all operations and work centers including suppliers and customers People , Equipment, Materials, Procedures Source: Heizer

22. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM CONTINUOUS IMPROVEMENT Walter Shewhart , another pioneer in quality management, developed a circular model known as PDCA (plan, do, check, act) as his version of continuous improvement. The PDCA cycle (also called a Deming circle or a Shewhart circle) Source: Heizer

23. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM CONTINUOUS IMPROVEMENT THE PDCA CYCLE Source: Heizer

24. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM SIX SIGMA Originally developed by Motorola, Six Sigma refers to an extremely high measure of process capability A Six Sigma capable process will return no more than 3.4 defects per million operations (DPMO) Highly structured approach to process improvement Source: Heizer

25. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM SIX SIGMA Six Sigma is a comprehensive system— a strategy, a discipline, and a set of tools—for achieving and sustaining business success: It is a strategy because it focuses on total customer satisfaction. It is a discipline because it follows the formal Six Sigma Improvement Model known as DMAIC . It is a set of seven tools : check sheets, scatter diagrams , cause-and-effect diagrams, Pareto charts, flowcharts, histograms, and statistical process control. Source: Heizer

26. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM SIX SIGMA Source: Heizer

27. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM EMPLOYEE EMPOWERMENT Employee empowerment – Enlarging employee jobs so that the added responsibility and authority is moved to the lowest level possible in the organization . Getting employees involved in product and process improvements • 85% of quality problems are due to process and material Source: Heizer

28. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM BENCHMARKING Benchmarking – Selecting a demonstrated standard of performance that represents the very best performance for a process or an activity . The steps for developing benchmarks are: 1. Determine what to benchmark. 2. Form a benchmark team. 3. Identify benchmarking partners. 4. Collect and analyze benchmarking information. 5. Take action to match or exceed the benchmark. Source: Heizer

29. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM JUST-IN-TIME (JIT) The philosophy behind just-in-time (JIT) is one of continuing improvement and enforced problem solving. JIT systems are designed to produce or deliver goods just as they are needed . JIT is related to quality in three ways: Source: Heizer

30. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM JUST-IN-TIME (JIT) JIT cuts the cost of quality: This occurs because scrap, rework, inventory investment, and damage costs are directly related to inventory on hand JIT improves quality : As JIT shrinks lead time, it keeps evidence of errors fresh and limits the number of potential sources of error Better quality means less inventory and a better, easier-to-employ JIT system: Often the purpose of keeping inventory is to protect against poor production performance resulting from unreliable quality. Source: Heizer

31. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM JUST-IN-TIME (JIT) Source: Heizer

32. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM TAGUCHI CONCEPT Most quality problems are the result of poor product and process design. Genichi Taguchi has provided us with three concepts aimed at improving both product and process quality: quality robustness , target-oriented quality, and the quality loss function . Source: Heizer

33. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM TAGUCHI CONCEPT Quality robust products are products that can be produced uniformly and consistently in adverse manufacturing and environmental conditions. Taguchi’s idea is to remove the effects of adverse conditions instead of removing the causes. Source: Heizer

34. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM TAGUCHI CONCEPT Source: Heizer

35. 7 CONCEPTS OF TOTAL QUALITY MANAGEMENT PROGRAM TAGUCHI CONCEPT Target-oriented quality – A philosophy of continuous improvement to bring a product exactly on target . Quality loss function (QLF ) – A mathematical function that identifies all costs connected with poor quality and shows how these costs increase as output moves away from the target value. Source: Heizer

36. KNOWLEDGE OF TQM TOOLS To empower employees and implement TQM as a continuing effort, everyone in the organization must be trained in the techniques of TQM. Tools for Generating Ideas • Check sheets • Scatter diagrams • Cause and effect diagrams Tools to Organize the Data • Pareto charts • Flow charts Tools for Identifying Problems • Histogram • Statistical process control chart Source: Heizer

37. KNOWLEDGE OF TQM TOOLS Tools for Generating Ideas Check sheets Scatter diagrams Source: Heizer Cause and effect diagrams

38. KNOWLEDGE OF TQM TOOLS Tools for Organizing Data Pareto Chart Source: Heizer Flow Charts (Process diagram)

39. KNOWLEDGE OF TQM TOOLS Tools for Organizing data Pareto Chart The Hard Rock Hotel in Bali has just collected the data from 75 complaint calls to the general manager during the month of October. The manager wants to prepare an analysis of the complaints. The data provided are room service, 54; check-in delays, 12; hours the pool is open, 4; minibar prices, 3; and miscellaneous , 2. Source: Heizer

40. KNOWLEDGE OF TQM TOOLS Tools for Identifying Problems Histogram Source: Heizer Statistical Process Control Chart

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