Total Quality Management Faculty: J.M.Pant Management Consultant, Trainer and Visiting Professor For any query, contact Mob: 9811030273; e-mail: jm.pant@gmail.com; jiten1@bol.net.in J.M.Pant, Faculty

Total Quality Management 1. Main concerns of Manufacturers and Customers Manufacturer Customer Quality Quality Cost Price Productivity Availability Concerns of manufacturer and customer are generally not the same. Customer usually has no concern for company productivity and cost.  Quality is the only common concern J.M.Pant, Faculty

Total Quality Management 2. What is Total Quality Management (TQM)   The elements of TQM as the name suggests are : Total Quality Management   Total implies - Complete - 100% All areas and functions All activities All employees - everyone All time - always J.M.Pant, Faculty

Total Quality Management 3. Quality target is 100%, not even 99.9% because even 99.9% might mean many dissatisfied customers every year, defective components entering assembly, accidents etc.   Quality definition Old view : Quality relates to products manufactured exactly to specifications.   New view : Total Quality relates to products that totally satisfy our customer needs and expectations in every respect on a continuous basis. Quality then is to satisfy customer needs....it is in fact to delight customers. J.M.Pant, Faculty

Total Quality Management 4. Who is our customer The next person(individual or functional group) in the workplace; the receiver of output and the next to act on it. A customer may be either external or internal.   Example :  Next in process customer   Marketing Design Design Manufacturing Manufacturing Sales Machine Shop Assembly Assembly Testing Testing Despatch Sales Product user J.M.Pant, Faculty

Total Quality Management 5. Management implies :   Quality does not happen on its own. It requires to be planned and managed. It is a management function, though it involves everyone. Therefore it needs a systematic approach.   TQM = Sum of TOTAL + QUALITY + MANAGEMENT   J.M.Pant, Faculty

Total Quality Management 6. TOTAL QUALITY MANAGEMENT is a thought revolution in management where the entire business is operated with customer orientation in all activities all the time by every one in the organization. TQM is an integrated system and methodology throughout the organization that help to design, produce and service quality products or services which are most economical for their value, most useful and always satisfactory to the customer. J.M.Pant, Faculty

Total Quality Management 7. Elements of TQM 7.1 Top management commitment Management responsibility Support all TQM activities Appointment of management representative Customer feedback and complaints Quality reviews Shareholder delight 7.2 Delight the customer Customer satisfaction, customer delight Internal customers Customer focus, customer orientation J.M.Pant, Faculty

Total Quality Management 7. Elements of TQM 7.3 People based management Total Employee Involvement Employee delight Team work People make quality Education and Training Effective communication Internal audits Review of non conformities J.M.Pant, Faculty

Total Quality Management 7. Elements of TQM 7.4 Management by fact Process orientation Measurement, Observation, Experimentation 7.5 Continuous improvement Continuous improvement cycle (PDCA) Kaizen 5S Prevention of repetitive occurrence J.M.Pant, Faculty

PDCA Cycle How to improve next time? What to do? How to do? 1. Plan Identify problem and develop plan for improvement. 2. Do Implement plan on a test basis. 3. Study/Check Assess plan; is it working? 4. Act Institutionalize improvement; continue cycle. How to improve next time? What to do? How to do? Things as per plan? Do as planned J.M.Pant, Faculty

Problem Solving Cycle PDCA for problem solving Definition of problem What Plan Analysis of Problem Why Identification Of causes How Planning Countermeasures Implementation Do Confirmation Of result Check Standardization Action J.M.Pant, Faculty

Total Quality Management 7. Elements of TQM 7.6 Appropriate technology JIT Automation Fool proofing TPM 7.7 Statistical process control 7.8 Problem solving tools/techniques including Seven QC tools 7.9 Benchmarking J.M.Pant, Faculty

Total Quality Management 7. Elements of TQM 7.10 Quality Function deployment Identify customer expectations Derive measurable parameters Set standards for these 7.11 Monitor variability in parameters 7.12 Move towards zero variability J.M.Pant, Faculty

Total Quality Management 7. Elements of TQM 7.13 Institute all pervasive system ISO 9001:2000 TS 16949 ISO 14000 series, ISO 14001 7.14 Supplier Control Approval of supplier for purchase Technical support and vendor development Supplier delight Qualify suppliers and certify for direct line feed J.M.Pant, Faculty

Total Quality Management 7. Elements of TQM 7.15 Reduce cost of quality Internal failure External failure Appraisal Prevention 7.16 Developing a quality culture Change in mind set Being proactive J.M.Pant, Faculty

Cost of uality Measurement of a Company’s Health Financial Data 50 40 30 20 10 5 % Sales Operation Costs Material Costs Overhead Costs Gen. & Admin. Costs Percentage of Sales Dollar Factory Data Defect Reports Labor Hours Recode/Redesign Customer Complaints J.M.Pant, Faculty

Cost of uality Iceberg Bugs Recode Defects Warranty Costs Quotation Errors Product Liability Missed Deadlines Configuration Errors Complaint Handling Bad Market Reviews Process Slowdown Field Service Lost Market Share Software Patches Returned Goods Interface Errors Help Desk Poor Documentation Training J.M.Pant, Faculty

Cost of uality Element Decision Flow YES NO PREVENTION APPRAISAL Is Cost related to Prevention of Non- Conformance ? Evaluating the Conformance ? Non-conformance Is Non-Conformance found prior to Shipment ? YES NO PREVENTION APPRAISAL INTERNAL FAILURE EXTERNAL FAILURE Not a Quality Cost J.M.Pant, Faculty

Cost of uality Examples of Elements PREVENTION Design Quality Progress Reviews Requirements Documentation QA Training Process Engineering üINTERNAL FAILURE Recode/Repair Labor Defect Tracking & Reports Requirement Changes Down Equipments APPRAISAL Unit Testing Regression Testing Automated Test Tools User Interface Reviews EXTERNAL FAILURE Returned Goods Liability Costs Help Desk Lost Sales/Market Share J.M.Pant, Faculty

Cost of uality Strategy Premise The Strategy is based on the premise that: For each failure there is a root cause. Causes are preventable. Prevention is always cheaper. J.M.Pant, Faculty

Cost of uality Appraisal Prevention Internal Failures Cost of Quality% External Total Sales Cost of Quality% TOTAL SALES C O Q (Rs.Rs.Rs.) J.M.Pant, Faculty

COST OF QUALITY OPTIMUM QUALITY COST MODEL TOTAL COST OPTIMAL POINT COST/ GOOD UNIT FAILURE COSTS PREVENTION & APPRAISAL COSTS 100 % GOOD J.M.Pant, Faculty

Target Specification Example A study found U.S. consumers preferred Sony TV’s made in Japan to those made in the U.S. Both factories used the same designs & specifications. The difference in quality goals made the difference in consumer preferences. Japanese factory (Target-oriented) This slide probably deserves some discussion. Some students will probably question whether consumers could tell the difference between the two. You should stress that they can tell the difference and that this will have an impact on their buying decisions. U.S. factory (Conformance-oriented) J.M.Pant, Faculty

Benchmarking How do today's business leaders sustain their competitive edge? By staying abreast of the latest, best practices and learning to apply them to every aspect of their organization. Whether you work in accounts payable, travel & entertainment, planning & budgeting, inventory management or payroll, learning about, customizing and implementing the best practices is the surest way to enhance the efficiency and effectiveness of your work. J.M.Pant, Faculty

Benchmarking Benchmarking concept What are others’ What is our Performance levels? How did they get there? What is our Performance level? How do we do it? Creative Adaptation Breakthrough Performance J.M.Pant, Faculty

Benchmarking Implicit in benchmarking are two key elements: Measuring performance in numerical terms (metrics). Requires some sort of units of measure. The numbers achieved by the best in class benchmark are the target. Organization seeking improvement plots its own performance against the target. Think of measures of performance in your manufacturing unit? service unit? For HR processes? J.M.Pant, Faculty

Benchmarking Benchmarking requires that managers understand why their performance differs. Bench markers must develop a thorough and in-depth knowledge of both their own processes and the processes of the best-in-class organization. An understanding of the differences allows the managers to organize their improvement efforts to meet the goal. Benchmarking is about setting goals and about meeting them by improving processes. J.M.Pant, Faculty

Benchmarking Process Decide what to benchmark Understand current performance Plan Study others Learn from the data Use the findings J.M.Pant, Faculty

Benchmarking Process Decide what to benchmark Think about the critical success factors and the mission. Which processes are causing the most trouble? Which processes contribute most to customer satisfaction and which are not performing up to expectations? What are the competitive pressures impacting the organization the most? What processes have the most potential for differentiating our organization from the competition? J.M.Pant, Faculty

STANDING IN THE MARKETPLACE <Example>Rating for each attribute and weighted rating to be entered in the cells for company X and the competitors Attribute Weight Company X Competitor A Competitor B Safety Performance Quality Service Ease of Use Reliability J.M.Pant, Faculty

STANDING IN THE MARKETPLACE <Example>For a service unit Satisfaction with .. Weightage Company X Competitor A Competitor B Greeting with a smile Processing transactions without error Easy to read and understand bank statements Prompt response J.M.Pant, Faculty

STANDING IN THE MARKETPLACE <Example>automobile manufacturer experiencing a drop in market share Attribute Weightage Comparison to competition % Superior Competitive Inferior Quality of equipment Quality and availability of spare parts Quality of field repair service J.M.Pant, Faculty

Types Of Benchmarking Internal Competitive Comparison within the organization of similar activities. Data easy to obtain Competitive Organization’s survival depends on its performance relative to competition Through surveys, reports, customers, suppliers, buying customers product to take apart and test. J.M.Pant, Faculty

Types Of Benchmarking Process. Many processes are common across industry boundaries, and innovations from other types of organizations can be applied across industries. It is relatively easy to find organizations with world class operations through published information, suppliers and consultants. For example, processes of payroll and accounts receivable, order processing, design, logistics etc.. J.M.Pant, Faculty

Types Of Benchmarking Process. <Examples> Southwest Airlines benchmarked turnaround time with auto racing pit crews. Motorola looked to Domino’s Pizza and Federal Express for the best ways to speed up delivery systems. J.M.Pant, Faculty

Benchmarking Process Identifying the best firms to benchmark There is no existing magic list of best-in-class companies. Hierarchy of best practices World Class Any organization, India Industry-wide, Sector-wide Competitor Internally J.M.Pant, Faculty

Benchmarking Process Studying Others Information available internally Public information Questionnaires Site visits Focus groups Panels of benchmarking partners brought together to discuss areas of mutual interest.(customers, suppliers, members of professional organizations, people with previous benchmarking activity experience, consultants). J.M.Pant, Faculty

Benchmarking Process Learning from the data Is there a gap between the organization’s performance and the performance of the best-in-class organizations? What is the gap? How much is it? Why is there a gap? What does the best-in-class do differently that is better? If best-in-class practices were adopted, what would be the resulting improvement? J.M.Pant, Faculty

Benchmarking Process Using the findings Two groups must agree on the change The process owners-people who will run the process Top management-who will enable the process and provide the necessary resources If best-in-class practices were adopted, what would be the resulting improvement? Current practices can’t change the best-in-class results but changing the process can. J.M.Pant, Faculty

Benchmarking Process Using the findings When acceptance is gained, new goals based on the benchmark findings are set. The generic steps for the development and execution of action plans are: Specify tasks Sequence tasks Determine resource needs Establish task schedule Assign responsibility for each task Describe expected results Specify methods for monitoring results J.M.Pant, Faculty

Quality Function Deployment Dr Mizuno of Tokyo Institute of Technology is credited with initiating the QFD system. First application of QFD was at Mitsubishi Heavy Industries in Kobe shipyard in 1972. After 4 years implemented by Toyota in production of mini-vans. QFD introduced in U.S in 1984 by Dr Clausing of Xerox. J.M.Pant, Faculty

Quality Function Deployment Benefits of QFD: Improves customer satisfaction Defines requirements in a set of basic needs and compares it to all competitive information. Management can then place resources where they will be the most beneficial in improving quality. Reduces implementation time Fewer engineering changes needed Critical to quality issues are identified and monitored from product inception to production. J.M.Pant, Faculty

Quality Function Deployment Benefits of QFD: Promotes team work Horizontal deployment of communication channels Avoids misinterpretation, opinions and miscues. Provides documentation Database for future design or process improvements is created. Serves as a training tool for new engineers. J.M.Pant, Faculty

Quality Function Deployment QFD is a planning tool used to fulfill customer expectations. Focuses on Voice of the customer. Market research attempts to capture the voice of customer but they sometimes conflict, and lack clarity. This is where voice of the customer gets lost and voice of the organization enters. J.M.Pant, Faculty

Quality Function Deployment Voice of Customer Unsolicited Solicited Qualitative Quantitative Random Structured Trade visits Customer visits Consultants Focus groups Customer Complaint reports; lawsuits Customer surveys; market surveys; trade trials; customer audits; product purchase (buy back) survey Sales force; training programs; conventions; trade journals; suppliers; academic; employees J.M.Pant, Faculty

Quality Function Deployment Voice of customer: What does the customer really want? What are the customer’s expectations? Are the customer’s expectations used to drive the design process? What can the design team do to achieve customer satisfaction? J.M.Pant, Faculty

Quality Function Deployment Voice of customer: Once the customer expectations and needs have been identified and researched, QFD team processes the information. The Affinity diagram is ideally suited for most QFD applications. QFD team: Designing a new product Improving an existing product J.M.Pant, Faculty

Quality Function Deployment QFD team Team members from Marketing, Design, Quality, Finance and Production. For existing product, team may have fewer members. Time commitment and inter team communication is a must. Regular team meetings. Team focus on quality management goal. J.M.Pant, Faculty

Quality Function Deployment Affinity Diagram Gathers large amount of data and organizes data into groupings based on their natural interrelationships. Used when thoughts are too widely dispersed or numerous to organize New solutions are needed Steps Phrase the objective Record all responses Group the responses Organize groups in an affinity diagram J.M.Pant, Faculty

Mapping the Voice of Customer Affinity diagram – Scrambled ideas What are the issues involved in missing shipping dates? Not enough fork trucks Engineering changes Insufficient training Overcrowded dock Error on bill of lading Teams not used Computer crashes No place for returns Inexperienced supervisors Shipping turnover J.M.Pant, Faculty

Mapping the Voice of Customer Affinity diagram – Ordered ideas What are the issues involved in missing shipping dates? Facilities People System Computer crashes Overcrowded dock Insufficient training Engineering changes Teams not used No place for returns Shipping turnover Error on bill of lading Not enough fork trucks Inexperienced supervisors J.M.Pant, Faculty

Quality Function Deployment Prepare an affinity diagram for: Improvement of the cafetaria Reducing equipment downtime Reducing congestion on roads Making Delhi more safe Increasing literacy in India Improving quality of PG management /engineering/ medical education J.M.Pant, Faculty

House of Quality The primary planning tool used in QFD is the house of quality. The house of quality translates the voice of the customer into design requirements that meet specific target values and matches those against how an organization will meet those requirements. J.M.Pant, Faculty

Technical descriptors (voice of the organization) Interrelationship between technical descriptors Technical descriptors (voice of the organization) Customer requirements (Voice of the customer) Relationship between requirements and descriptors Prioritized customer requirements Prioritized technical descriptors J.M.Pant, Faculty

Quality Function Deployment QFD (Fig A) Process Control features Process features features Process Product features Customers’ needs features Product Customers needs Customers J.M.Pant, Faculty

Quality Function Deployment Fig B is a matrix of customer needs (“customer requirements”) and product features (“technical requirements”) for paper being supplied to a commercial printer. Note the additional requirements on importance weighting, correlations between requirements, units of target values (e.g millimeters for width and thickness) and competitive evaluations. Fig B is also called as the House of Quality. J.M.Pant, Faculty

Quality Function Deployment House of Quality (Fig B) Correlations entered In squares like: Strong positive, positive, Negative, Strong negative Technical requirements Paper width Paper thickness Coating thickness Tensile strength Paper color Competitive evaluation Importance to customer X = Us A = Competitor A B = Competitor B ( 5 is best) 1 2 3 4 5 Customer requirements Paper will not tear 3    X A B Consistent finish 1 A X B No ink bleed 2 B A X Prints clearly X A B Relationships Strong=9  Medium = 3  Small=1 J.M.Pant, Faculty

Quality Function Deployment House of Quality (Fig B) Correlations entered In squares like: Strong positive, positive, Negative, Strong negative Technical requirements Peper width Paper thickness Coating thickness Tensile strength Paper color Competitive evaluation Importance to customer X = Us A = Competitor A B = Competitor B ( 5 is best) 1 2 3 4 5 Customer requirements Importance weighting 3 27 36 9 X A B Target Values W:mm T: mm microns Kg per sq cm Approved panel A X B Technical 5 evaluation 4 2 1 B X A B A X A X A X B B X B A B A X X A B Relationships Strong=9  Medium = 3  Small=1 J.M.Pant, Faculty

Total Quality Management Change in mind set for variability reduction Conventional TQM way Meet specifications Move to target value High tech machines needed Even with old machines through better setting, maintenance and employee training Managers think and plan Managers guide and lead Workers think, plan and do MBO Kaizen (continuous improvement) Profit by driving task completion Quality is the path of profit J.M.Pant, Faculty