AMITY BUSINESS SCHOOL
AMITY UNIVERSITY, NOIDA, UTTAR PRADESH
OPERATIONS MANAGEMENT
PSDA – 1
“TOTAL QUALITY MANAGEMENT OF FORD”
Submitted by:
Vinay Nayak – 41
Siddharth Bhattacharya – 48
Amit Kishore-34
Vishant Jindal-70
Zeenia Sen – 15
Shubhi Gupta - 18
PARTICULARS
PAGE NO.
Chapter 1: Introduction to Total Quality Management
3
Chapter 2: Application of Total Quality Management in Ford
10
Chapter 3: Gap analysis and suggestions
18
Chapter 4: References
20
CHAPTER 1: INTRODUCTION
 What is Total Quality Management?
Total quality management (TQM) is the continual process of detecting
and reducing or eliminating errors in manufacturing,
streamlining supply chain management, improving the customer
experience, and ensuring that employees are up to speed with training.
Total quality management aims to hold all parties involved in the
production process accountable for the overall quality of the final
product or service. TQM was developed by William Deming, a
management consultant whose work had a great impact on Japanese
manufacturing. While TQM shares much in common with the Six
Sigma improvement process, it is not the same as Six Sigma. TQM
focuses on ensuring that internal guidelines and process standards
reduce errors, while Six Sigma looks to reduce defects.
Total quality management is a structured approach to overall
organizational management. The focus of the process is to improve the
quality of an organization's outputs, including goods and services,
through the continual improvement of internal practices. The standards
set as part of the TQM approach can reflect both internal priorities and
any industry standards currently in place. Industry standards can be
defined at multiple levels and may include adherence to various laws
and regulations governing the operation of a particular business.
Industry standards can also include the production of items to an
understood norm, even if the norm is not backed by official regulations.
 What does Total Quality Management do?
TQM oversees all activities and tasks needed to maintain a desired level
of excellence within a business and its operations. This includes the
determination of a quality policy, creating and implementing quality
planning and assurance, and quality control and quality improvement
measures.
 Total Quality Management Principles
Total quality management has a number of key principles which—
when implemented together—can move any organization towards
business excellence.
Customer Focus
Central to all successful TQM systems is an understanding that
quality is determined by the customer. No matter what measures you
introduce to improve the quality of your products and services, the
only way of knowing if they have been successful is customer
feedback, whether in the form of reviews, return rates, or satisfaction
surveys.
Employee involvement
Every person in an organization—from entry-level workers to
management—has a responsibility for the quality of products and
services. However, employees can only be invested if they feel
empowered to make their own decisions, something that depends on
management creating the right workplace environment.
Centred on process
A TQM system will fail without a clear focus on processes and
process-led thinking. A process fault is ultimately the cause of most
problems, which is why effective monitoring of every single step is an
essential part of assessing, maintaining and improving quality.
Integrated system
An organization should have an integrated system that allows for
effective total quality management. This may be a bespoke system, or
one based on a quality standard such as ISO 9001, but it should be
understood and applied across all functions and departments.
Strategic and Systematic approach
Critical to quality management is the existence of a strategic plan that
outlines how an organization intends to achieve its mission and
business goals. It goes without saying that quality should be a core
Decision making based on facts
Business performance can only be assessed using the available facts,
such as sales data, revenue figures, and customer retention rates. The
opinions of customers, employers and suppliers should never be used
Communication
Effective communication is essential when an organization is
implementing significant changes for the sake of business
improvement. Every member of staff should be made aware of the
strategy, the timescales involved, and the reasons for implementing it.
Continuous improvement
Applying the principles of DMAIC and Lean Six Sigma will instill an
organization with a culture of continuous improvement, driving all
employees to constantly seek new ways to be more competitive and
deliver high-quality products for all stakeholders.
You could sum up the goal of TQM in this way:
“Do things right the first time, every time.”
 The History of Total Quality Management
There is no single, agreed-upon source for the phrase total
quality management. Some experts believe it came from two books by
seminal quality management thinkers: Armand Feigenbaum’s Total
Quality Control and Kaoru Ishikawa's What Is Total Quality Control?
The Japanese Way. Others say the terminology arose from an initiative
in the United States Navy to adopt quality management guru William
Deming’s recommendations, which they termed total quality
management. TQM did not enjoy widespread acceptance until the
1980s.
The roots of the principles and practice of TQM extend back to the
early 20th century and Frederick Taylor’s Principles of Scientific
Management, which advocated a consistent way of performing tasks
and inspecting finished work to prevent defective products from
leaving the shop. Further innovation came in the 1920s with Walter
Shewhart’s elaboration of statistical process controls, which one could
apply at any point in the production process to predict quality levels. It
was Shewhart who developed the control chart, used today for
managing
with
Kanban
and
Agile.
Throughout the 20s and 30s, Shewhart’s friend and mentee, William
Deming, developed statistical process control theories that he would
eventually use to help the US Census department in the early 1940s.
This was the first use of statistical process control in a nonmanufacturing field.
 Why is TQM important to an organization?
TQM tools and principles acquire power not when an organization
creates a dedicated quality department, but when it includes the whole
company in the pursuit of high quality. An example is the quality circle,
in which workers directly involved in a process brainstorm to discover
solutions. “People are a fabulous resource that is frequently
underutilized. The leadership often doesn’t recognize the value that
they bring to the everyday workplace. Employees know how to fix
problems. In addition to tapping a native resource, implementing a
TQM philosophy can help an organization:












Ensure customer satisfaction and customer loyalty
Ensure increased revenues and higher productivity
Reduce waste and inventory
Improve design
Adapt to changing markets and regulatory environments
Increase productivity
Enhance market image
Eliminate defects and waste
Increase job security
Improve employee morale
Reduce costs
Increase profitability
How do you implement TQM?
Plan: The planning phase is the most important. That’s where
management, along with the associates, identify the problems to see
what really needs to be addressed — the day-to-day things that may be
happening on the productivity side that management is not aware of.
So they’re trying to determine a root cause. Sometimes, employees do
research or high-level tracking to narrow down where an issue may
originate.
Do: The doing phase is the solution phase. Strategies are developed to
try to fix those problems identified in the planning phase. Employees
may implement solutions and if a solution doesn’t appear to work, it’s
back to the drawing board. In contrast to Six Sigma, it’s less about
measuring gains and more about whether the employees judge the
solution to be working.
Check: The checking phase is the before and after. So after you’ve
made these changes, you see how they’re doing.
Act: The acting phase is the presentation or the documentation of the
results to let everybody know, ‘Hey, here’s how we were doing it.
Here’s how it is now. This is the new way, and this is what this should
address going forward.’
 The seven basic tools of TQM
According to the experts, the basic tools of TQM allow anyone - even
someone without statistical training - to gather data to illuminate most
problems and reveal possible solutions. Here are the seven basic tools
of TQM:



Check Sheet: This is a pre-made form for gathering one type of
data over time, so it’s only useful for frequently recurring data.
Pareto Chart: The chart posits that 80 percent of problems are
linked to 20 percent of causes. It helps you identify which
problems fall into which categories.
Cause and Effect Diagram or Ishikawa Diagram: This
diagram allows you to visualize all possible causes of a problem
or effect and then categorize them.




Control Chart: This chart is a graphical description of how
processes and results change over time.
Histogram Bar Chart: This shows the frequency of a problem’s
cause, as well as how and where results cluster.
Scatter Diagram: This diagram plots data on the x and y axes to
determine how results change as the variables change.
Flow Chart or Stratification Diagram: This represents how
different factors join in a process.
The Key Players in Total Quality Management: Customers,
Suppliers, and Employees
To achieve success with a total quality management program or any
other improvement methodology, managers must understand the
quality goals for their product or company. They must then
communicate those goals, in addition to the benefits of TQM, to the
company, as employees play a vital role by contributing their intimate,
day-to-day knowledge of product creation and processes.
TQM is a philosophy that values comprehensiveness. Therefore,
suppliers are a crucial part of TQM execution. Companies must vet new
suppliers and regularly audit existing suppliers to guarantee that
materials meet standards. Communication with suppliers about TQM
goals
is
also
essential.
Customers are the most significant part of the TQM equation. After all,
they’re the reason for TQM’s existence. Aside from the obvious
feedback the sales team provides, customers — product or service users
— give information about what they want from the deliverable,
whether that deliverable is tangible or a service.
CHAPTER 2: APPLICATION OF TOTAL QUALITY MANAGEMENT
IN FORD
 Background of the company:
Ford Motor Company is an American automaker & the world’s fifth
largest automaker based on worldwide vehicle sales. The company was
founded by Henry Ford on June 16, 1903.
The company manufactures passenger cars, trucks & tractors as well as
automotive parts & accessories. The first commercial car Model T was
introduced in 1908. In 1913 the company introduced the world’s first
moving assembly line for cars & in 1914 the company introduced $5 a
day wage to improve labor productivity. By 1923 the company was
producing half of America’s automobiles. As times passed, the
company grew more & more. In the flow of time the company’s
management style has also changes.
The company is currently the world’s 5th biggest manufacturer of
automobiles which require a huge amount of production. On the other
hand the customer demand is continually changing. So, in order to
fulfill customer’s continuous demand the company is following TQM.
 TQM in Ford Motor Company:
Twenty years ago, when an invasion of Japanese imports threatened the
American automobile industry, the Ford Motor Company led a quality
revival based on the management philosophy of W. Edwards Deming,
who was controversial then and is out of fashion now.
The results of the movement, known as Total Quality Management,
were stunning at Ford. After racking up $3 billion in losses between
1979 and 1982, Ford hit a series of home runs, including the
aerodynamic Taurus-Sable cars, and by 1986 had become the most
profitable American auto company.
Ford motor company tries to use all the application of TQM to ensure
the overall quality of their product.
 Product design & continuous improvement:
Product design is one of the most important things for a company to
have satisfied customers. Ford motor company always tries to provide
the best quality product to their customers. They always come up with
something new & advanced. For example- fuel efficiency, high speed,
attractive look, advanced safety system, entertainment facilities etc.
Every car goes through multi-level of inspection before going to the
market.
 Employee engagement:
Their employees are also their customers, and they can be strong
ambassadors for their products. In Michigan, information sessions
called “Go Further Employee Events” are held to give employees the
opportunity to view, learn about and test drive yet-to-be-released
vehicles. This lets the employees see how our products are meeting the
needs of customers, while providing factual information about the
vehicles. Their employees can then promote the vehicles to their friends
and families, which, in turn, can increase sales and help to strengthen
the Ford brand. Their Employee Resource Groups also conduct a
number of events and initiatives each year to engage our employees,
provide product insights and reach out to the community.
The company believes it’s important to engage their people within the
communities in which they operate. Each year, Ford offer ways for
thousands of their employees and retirees to participate in volunteer
programs. They see these programs as not only critical to helping those
in need, but pivotal to inspiring and energizing our employees around
volunteerism and community service. Through these community
initiatives, they support teamwork and build a sense of shared purpose
and commitment.
 Problem solving:
Ford Motor Company is currently using the 8D problem solving tool.
It is a disciplined way to solve a problem.
The Ford Motor Company developed the 8D (8 Disciplines)
Problem Solving Process, and published it in their 1987 manual, "Team
Oriented Problem Solving (TOPS)." In the mid-90s, Ford added an
additional discipline, D0: Plan. The process is now Ford's global
standard, and is called Global 8D.
Ford created the 8D Process to help teams deal with quality control and
safety issues; develop customized, permanent solutions to problems;
and prevent problems from recurring. Although the 8D Process was
initially applied in the manufacturing, engineering, and aerospace
industries; it's useful and relevant in any industry.
Steps in applying this method are-
 Process design:
In the process design Ford faces many challenges. Such asModern automotive vehicles use a large number of stamped sheet metal
parts in their construction. Understanding the dynamic behavior of
sheet metals during transfer from one die station to another becomes an
urgent task in the tooling design phase to achieve optimum transfer
motion, avoid high cost equipment damage and improve overall
production
uptime.
To get a better understanding of this critical process and to improve the
productivity of the tooling design and stamping process, Ford looked
for external input to complement its own internal experience and
expertise.
Solution to these problems areHaving worked on many previous projects together, Ford selected
Altair Product Design to assist in this process. The newly developed
Altair Hyper Die Dynamics (HDD), a unique tool to analyze sheet
metal transfer and dynamic behavior, was implemented within Ford's
design process. By introducing flexible body blank representations and
a virtual model of the stamping press line, Altair Product Design and
Ford users could easily conduct a panel transfer dynamic analysis,
visualizing the in-motion blank deflections, accelerations, and resultant
forces.
To fully understand the complex nature of the stamping process, Altair
Product Design created a reduced model representing a single press
station along with several types of real parts to be simulated in order to
validate the virtual press model and improve the robustness of the
solution.
Result of this method isThe implementation of the highly customized software and newly
formulated design process in partnership with Altair Product Design
had a number of positive results for Ford: Ford engineers could
successfully predict dynamic panel transfer behavior (displacement,
forces, stresses, etc. faster and crucially more accurately than was
previously possible. Material behavior could be predicted with greater
accuracy thus avoiding interference during panel transfer and reducing
part or die damage.
 Services of Ford motor company:
Ford motor company offers so many services to customers to promote
their Product. Here are services:
 Ford offers automotive finance through Ford Motor Credit
Company:
Ford Motor Credit Company LLC: Ford Credit, is the financial services
arm of Ford Motor Company, and is headquartered in Dearborn,
Michigan. Its business activities are concentrated primarily in the area
of automobile loans in support of its parent company. The company
offers consumer loans and leases to car buyers, as well as business
loans and lines of credit to dealerships selling Ford Motor Company
products. The firm also issues commercial paper and other debt
instruments on Ford's behalf.
Ford Credit also owns Lincoln Automotive Financial Services, the arm
that finances Lincoln vehicles.
Ford's FoMoCo parts division sells aftermarket parts under the
Motorcraft brand name. It has spun off its parts division under the name
Visteon.
 Product sale related services:
 Interest-free payment options
 Backed by Ford Credit and 100% transferrable
 Honored by Ford Dealers throughout the U.S. and Canada
 Genuine Parts and Certified Ford Technicians
 24-hour roadside assistance and rental vehicle benefits
 Extended services plan options:
There are different levels of coverage to choose from, so you can be
confident there's a plan that will meet your needs
.
 Ford insurance:
Ford Credit offers industry-leading auto insurance designed
specifically for your vehicle1, including:
 Experienced, Certified Ford Technicians
 Guaranteed workmanship for as long as you own your Ford
 Genuine Ford Parts
 Fast, accurate claims service
 Discounts when you combine auto with home or rental insurance
 $100 off collision deductible when repairs are made at
participating dealer-owned body shops.
Ford motor company always gives most priority to their customer.
They want to establish always that are customers really satisfied with
their product and services.
 TQM wheel in services:
There are some ways that we can establish our customer
satisfaction. These components are related with customer
satisfaction.
Employee involvement: Ford motor company always makes sure
that employees are really involved with services. Employees are
committed to serve their best.
Continuous improvement: In service sector continuous
improvement is most important thing. There might be some
lacking in service but Ford rapidly select those lacking and try to
improve those sites.
Service design: It’s another most crucial task to ensure best
services. Ford Company designs their services with highly
satisfactory options.
Purchasing: To provide best service purchasing is really
important. Company tries to make sure how easily customer can
get their services.
Benchmarking: Benchmarking is really important for both
manufacturing and services. Ford has to make sure the standard
services to customers compare to other renowned motor company
like Toyota, Hyundai and so on.
These are factors that company has to make sure for customer
satisfaction.
CHAPTER 3: GAP ANALYSIS & SUGGESTIONS
 Observations
As a consequence of implementing TQM, Ford Motor Company
achieved considerable positive results. The major constituents of total
quality—strategic orientation, customer focus, “obsession with
quality,” teamwork, long-term commitment, and more—helped Ford to
enhance its productivity. Ford introduced TQM by way of a joint
venture with ChemFil, the PPG Industries division. With the help of
ChemFil, Ford was able to enhance its work environment and
profitability by implementing a less harmful painting process.
Thus, TQM came to the forefront in painting design since the
preparation done by ChemFil was grounded on customer quality
regulations. Moreover, work at all levels was modified by standardized
rules, which meant the “days of guessing” were gone.
As a result, the slogan of the company changed from “Quality is job 1”
to “Quality people, quality products”. Therefore, the major outcome of
implementing TQM at Ford Motor Company was an increase in quality
at all levels.
 Gap identification
After looking at what the company has done and what it ought to do,
certain problems were identified. These are:
 Despite the successful implementation of TQM and its positive
effect on Ford’s productivity, the emergence of new approaches
such as business process reengineering (BPR) is prompting the
organization to alter its methods to achieve better results.
 Currently, the problem that Ford is facing concerns discontinuous
improvement
 Suggestions to Ford
 Ford needs to employ information technology (IT) as a major
driver of BPR. IT helps to analyse and disseminate data obtained
from customers and suppliers at a new, much improved, level.
 Such options as client-server architecture and computer networks
can considerably enhance the process of the company’s
operation.
 The need to develop BPR is considered an urgent demand in the
modern business world. Thus, Ford should pay more attention to
resolving the issue of IT, which could make the company more
stable and profitable.
CONCLUSION
Research has provided insight into the peculiarities of total quality
management, its advantages and disadvantages, and the way Ford
Motor Company has implemented this tool. The discussion has
identified that despite the competition, Ford continues to offer great
potential, satisfying its customers and providing shareholders with high
dividends. The analysis performed raises several important lessons.
First, it is crucial for organizations to include all aspects of the
production process in their quality management. In this way,
companies will be able to reach the best outcomes, gain the highest
profits, and increase employee and customer satisfaction levels.
Second, it is necessary not to neglect the development of new
approaches even if the current strategy is yielding positive results. In
particular, although TQM has enhanced Ford’s productivity, the
organization should also pay attention to BPR since this process is more
capable of satisfying IT needs. Finally, research has shown that even if
a company has powerful competitors, a good reputation and highquality products will continue to attract customers.
CHAPTER 4: REFERENCES
1. http://corporate.ford.com/microsites/sustainability-report-201314/people-workplace-employees-engagement.html
2. http://www.mindtools.com/pages/article/8d-problem-solving.htm
3. http://www.altairpd.com/CaseStudyDetail.aspx?id=15
4. http://corporate.ford.com/
5. https://credit.ford.com/vehicle-insurance
6. http://www.sec.gov/Archives/edgar/data/38009/000003800915000022/fm
cc1231201410-k.htm
7. https://www.academia.edu/14755350/Total_Quality_Management_TQM
_in_Ford_Motor_Company
8. https://www.a1-termpaper.com/topics/essay/ford-motor-companyimplementing-total/7752851