Total Quality Management

Quality Management

World- Class Service#Gaither Chapter 17#OverviewNature of QualityTraditional v/s Modern Quality ManagementEmerging Quality StandardsTQM ProgramsWrap-Up: What World-Class Producers Do#Gaither Chapter 17#

QUALITY

For the Japanese, it is religionFor the Americans, it is their growthFor the Gulf, it is bull-shit

&For the Indians - - is it waste of time & money ????#Gaither Chapter 17#What is Quality?

The quality of a product or service is a customers perception of the degree to which the product or service meets his or her expectations.#Gaither Chapter 17#Nature of QualityDimensions of Quality

Determinants of Quality

Costs of Quality

. Why should we understand them ???#Gaither Chapter 17#OFFICE MEMO Reads :All members of staff please note that due to recession, there will only be one drink per person at this year's Annual Party.

And please bring your own cup! Regards, Management

And what happened at the annual party !!!

#

The specifications were missing in the memo (size of cup).

Moral of the story: Givevery clear specifications, in your daily life including project work.#8 Dimensions of Product QualityPerformance : Primary Optg. Characteristics of product e.g. - TV : Sound, Picture clarity, Color, Reception .Features : Secdry Charct. that supplement basic functioning. e.g.-Free drinks on a flight, Automatic tuners in TV Reliability : Dependability of product, as down-time is expensive Conformance : meeting pre-established specifications Durability : Amount of use one gets from a product before it deteriorates, e.g. -1000 hr. bulb Appearance: looks, feels, sounds, tastes or smells.Customer service : Elapsed time before service is restored.Safety#Gaither Chapter 17#5 Dimensions of Service Quality (RATER)Reliability: Perform promised service dependably and accurately. Example: receive mail at same time each day.

Assurance: Ability to convey trust and confidence. Example: being polite and showing respect for customer.

Tangibles : Physical facilities and facilitating goods. Example: cleanliness.

Empathy: Ability to be approachable (e.g. being a good listener)

Responsiveness: Willingness to help customers promptly. e.g. Avoid keeping customers waiting for no apparent reason.

#Gaither Chapter 17#Determinants of QualityQuality of designQuality capability of production processesQuality of conformanceQuality of customer serviceOrganizational quality culture#Gaither Chapter 17#Costs of QualityCost of Prevention for preventing defective goods to be provided. e. g. : Investment in M/Cs, Technology, Education Programs, Data Collection & Analysis,This investment brings in high returns like Customer Satisfaction, Reduced Scrap, and Reduced Rework Expenses.

2. Cost of Detection/ Appraisal Inspection of RM / WIP / FG, Final Performance Test, Maintenance of Test Eqpt.

3. Cost of Failure Relates to non-conforming & non-performing productsInternal Failure Cost Cost incurred before delivery of product e.g. Scrap, Rework, Repair, Down Time (No cost if no defects produced within the system )External Failure Cost Cost incurred after product is delivered.e.g. Cost of Returned Goods , Warranty Charges, Legal Exp., Customer Dissatisfaction#Gaither Chapter 17#TQM TQM is an organized scientific approach towards continuous improvement of quality, involving everyone in the organization, covering every function, aimed towards total customer satisfaction.

3 Pillars of TQM Customer SatisfactionContinuous ImprovementTotal Employee Involvement#Gaither Chapter 17#Conventional Approach TQM Approach

Begins at the end of Begins at the start of the product line processExternal Customers Internal and External customers

DetectionPrevention

DeviationError Free

Tolerance rangeTarget Value

#Gaither Chapter 17#Quality GurusW. Edwards Deming - Assisted Japan in improving productivity and qualityPhilip B. Crosby - Quality Is Free Co. should have the goal of zero defectArmand Feigenbaum - Developed TQM concept Kaoru Ishikawa - Quality circles & fishbone diagramsJoseph M. Juran - Wrote Quality Control Handbook

#Gaither Chapter 17#Crosbys Concept of Free QualityPhillip Crosby (Corp. VP & Director of Quality ITT )

Quality is not a gift, but it is FREE . What costs money are the un-quality things - all the actions that involve not doing jobs right the first time. Quality is not only free; it is an honest-to-everything profit maker. #Gaither Chapter 17#Quality Drives the Productivity MachineIf production does it right the first time and produces products and services that are defect-free, waste is eliminated and costs are reduced.

Quality management programs today are viewed by many companies as productivity improvement programs.#Gaither Chapter 17#Emerging Quality StandardsISO 9000 Standards Malcolm Baldrige National Quality AwardDeming PrizeSix Sigma Concept#Gaither Chapter 17#Malcolm Baldrige National Quality Award Awards given annually to U.S. firmsCriteria include- 1. Leadership 1252. Strategic Planning 853. Customer & Market Focus 854. Information and Analysis 855. HRD & Management 856. Process Management 85

7. Business Results ( e.g. Customer Satisfaction Financial and Market Results Supplier Results , etc. ) 450--------TotalPoints1000 Winners are required to share their strategies to other applicants.#Gaither Chapter 17#

Indian Scenario

Tata Group have formulated their TBEM ( Tata Business Excellence Model) on the basis of Malcolm Baldrige Award.

This is being used as a powerful tool to conduct the business through a more systematic approach and sustainable process that will not be dependent on any individual. #Gaither Chapter 17#The Deming Prize(details from Tisco Annual report 2008-09)Estd. in 1950. Originally designed to reward the Japanese Cos. that demonstrated successful quality improvement programsGiven by Japanese Union of Scientists and Engineers (JESU)Now also awarded to non-Japanese Cos. Four top-management activities recognizedSenior management activitiesCustomer satisfaction activityEmployee involvement activitiesTraining activity So far, 160 cos. have won worldwide, including 15 Indian cos. Indian Winners : Sundaram Clayton, M & M, Tata Steel

#Gaither Chapter 17#

ISO - Benefits of implementation:

ISO 9001 forces a firm to document all its processes. Such documentation makes the system process-dependant and no person-dependant.While defining the processes, the process-owners have to visualize all possible defect opportunity and strengthen the process.

Audit procedures continually check the working of the process and force a re-examination of the processes.

General benefits include:Clear understanding of customer requirements Better relationship with vendors and customersReduction in operations costEfficient business communication at all levels with all stake holdersLower defect rates, consistent output#Gaither Chapter 17#Elements of TQMTop management commitment and involvementCustomer involvementDesign products for qualityDesign production processes for qualityControl production processes for qualityDevelop supplier partnershipsCustomer service, distribution and installationBuilding teams of empowered employeesBenchmarking and continuous improvement#Gaither Chapter 17#Top ManagementCommitment and InvolvementSupport must be genuine or TQM will be seen as just another passing fadFundamental changes must occur in the culture of the organizationSuch fundamental changes are not easy, but are impossible without top managements commitment and involvement#Gaither Chapter 17#Customer InvolvementMechanisms to involve the customerFocus groupsMarket surveysCustomer questionnairesMarket research programsQuality Function Deployment (QFD)Formal system for identifying customer wantsEliminate wasteful product features and activities that do not contribute#Gaither Chapter 17#Developing Supplier PartnershipsSupplier becomes part of the customers TQM drive

The relationship between the supplier and the customer becomes long-lasting and durable( not at Arms Length)#Gaither Chapter 17#Customer Service, Distribution, and InstallationPackaging, shipping, and installation must be included in TQM.

Warehousing, marketing, and the distribution function must be committed to perfect quality.

Contact between the customers and the firms product must be planned and managed to provide satisfied customers.#Gaither Chapter 17#Benchmarking and Continuous ImprovementBenchmarkingThe practice of establishing internal standards of performance by looking to how world-class companies run their businesses

Continuous ImprovementThe company makes small incremental improvements toward excellence on a continual basis#Gaither Chapter 17#Six Sigma Concept Six Sigma simply means striving for near perfection.It is a disciplined, data-driven approach & methodology for eliminating defects in any process - from manufacturing to transactional and from product to service.Driving towards 6 Std. Devns. (bet. Mean and the Spec. limit)i.e. The process must not produce > 3.4 def. /million opportunities.

PPM Defects ProcessCapabilityDefects per Million Opportunities#Gaither Chapter 17#Six Sigma ProcessAccomplished through 2 sub-methodologies:

DMAIC (define, measure, analyze, improve, control) used for existing processes falling below specification and looking for incremental improvement.

DMADV (define, measure, analyze, design, verify) used to develop new processes or products, or if a current process requires more than just incremental improvement.

Both processes are executed by Six Sigma Green Belts and Black Belts, and are overseen by Master Black Belts.

The goal of Six Sigma is to increase profits by eliminating variability, defects and waste.

#Gaither Chapter 17#

Process MeanLowerspecificationUpperspecification1350 ppm1350 ppm1.7 ppm1.7 ppm+/- 3 Sigma+/- 6 Sigma3 Sigma and 6 Sigma CoverageGaither Chapter 17#Six Sigma-Practical Meaning99.99966% Good (6 Sigma)20,000 lost articles of mail /hr.Unsafe drinking water for almost 15 minutes each day5,000 incorrect surgical operations per weekTwo short or long landings at most major airports each day200,000 wrong drug prescriptions each yearNo electricity for almost seven hours each monthSeven articles lost per hourOne unsafe minute every seven months1.7 incorrect operations /weekOne short or long landing every five years68 wrong prescriptions / yearOne hour without electricity every 34 years99% Good (3.8 Sigma)#

Customer Delight -

Philip Kotler : It is not just enough to satisfy a customer, but it is important to delight him. Delighting is - adding unexpected surprises to the offer Prof. W. E. Deming : It will not suffice to have customer that are merely satisfied. An unhappy customer will switch over. Unfortunately a satisfied customer may also switch, on the theory that he could not lose much, and might gain.Profit in business comes from repeat customers, customers that boast about your products and service, and that bring friends with them

Examples of Customer Delight Carry Bag, Goods Return Guarantee

#Gaither Chapter 17#Kano ModelModel of Customer Satisfaction

Classifies product attributes (how they are perceived) and their effect on customer satisfaction.

Indicates - when good is good enough, and when more is better.

#Gaither Chapter 17#Threshold AttributesBasic or musts of a product, Not contributing to any product differentiation.Increasing attributes provide diminishing returns, but absence may results into dissatisfaction. ( e.g. Brakes of a car.)

Performance AttributesMost of the customers verbalized needs fall into this categoryMore is better, and will improve customer satisfaction. Conversely, weak performance reduces customer satisfaction. Customers willingness to pay is tied to performance attributes. ( e.g. Car providing better fuel economy)

Excitement AttributesUnspoken & unexpected (Latent Needs) of customers, but may result into higher customer satisfaction. However absence may not lead to dissatisfaction.Provide a competitive advantage.

SatisfactionDis-satisfactionKano Model 3 Categories of Product attributes -#Gaither Chapter 17#Thank YouPratik Saraiyapratiks7041@gmail.com#