TABLE OF CONTENTS
INTRODUCTION ................................................................................................................................................. 3
LEARNING OUTCOMES ...................................................................................................................................... 3
LEARNING CONTENT ......................................................................................................................................... 3
CONCEPTS ON OPERATION MANAGEMENT ............................................................................4
What is Operation Management? ..................................................................................................... 4
The Operations System: A Model..................................................................................................... 5
The Importance of Operations Management ...................................................................................... 7
Types of Productivity Ratios ............................................................................................................ 7
Uses of Productivity Ratios ............................................................................................................. 8
Designing Operations System ......................................................................................................... 9
TEACHING ACTIVITIES AND LEARNING ACTIVITIES............................................................................................... 13
ASSESSMENT TASK/S ..................................................................................................................................... 14
QUALITY MANAGEMENT AND CONTROL .............................................................................. 15
Quality Management.................................................................................................................... 15
Chain Reaction ........................................................................................................................... 15
Supply Chain Management ........................................................................................................... 16
Dimensions of Quality .................................................................................................................. 17
Product Quality ........................................................................................................................... 17
Service Quality ........................................................................................................................... 18
Quality Control (QC) .................................................................................................................... 20
Quality Assurance (Qa) ................................................................................................................ 20
Implementation Tips for Winning Organization ................................................................................. 23
TEACHING ACTIVITIES AND LEARNING ACTIVITIES............................................................................................... 24
FLEXIBLE TEACHING LEARNING MODALITY ........................................................................................................ 24
ASSESSMENT TASK/S ..................................................................................................................................... 25
LEADERSHIP FOR TOTAL QUALITY MANAGEMENT (LTQM).............................................. 26
Deming’s 14 Points for Top Management ........................................................................................ 26
Ten Strategies for Top Management .............................................................................................. 28
TOTAL QUALITY MANAGEMENT AND IMPLEMENTATION .................................................. 34
TQM Tools and Techniques .......................................................................................................... 34
PDSA TQM Implementation .......................................................................................................... 35
Planning Phase of TQM ............................................................................................................... 36
Apply PDSA for Improvement ........................................................................................................ 40
Getting things Done ..................................................................................................................... 41
TEACHING ACTIVITIES AND LEARNING ACTIVITIES............................................................................................... 42
FLEXIBLE TEACHING LEARNING MODALITY ........................................................................................................ 43
ASSESSMENT TASK/S ..................................................................................................................................... 43
CUSTOMER SATISFACTION ON SERVICES ........................................................................... 44
Customer Satisfaction .................................................................................................................. 44
Importance of Service .................................................................................................................. 44
Features of Services .................................................................................................................... 45
Customer Requirements are Difficult to Comprehend ........................................................................ 45
Psychology of Customers ............................................................................................................. 46
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Customer Delight ........................................................................................................................ 46
Customer Attrition ....................................................................................................................... 47
Customer Contact Personnel ........................................................................................................ 48
The KANO Model ........................................................................................................................ 49
Customer Recovery Process ......................................................................................................... 55
REFERENCES ................................................................................................................................................. 55
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Chapter 1
OPERATION AND MANAGEMENT (TOTAL QUALITY MANAGEMENT)
Introduction
The organization was described as a system use for transforming inputs into outputs. At
the center of transformation process is the technical core, which is the heart of organization’s
production of its product or service. In a university, the technical core includes the academic
activities of teaching and research. Inputs into the technical core include human resources, land,
equipment buildings and technology. Output from the technical core include the goods and
services that are provided for customers and clients. Operation strategy and control feedback
shape the quality of outputs and the efficiency of operations within the technical core. Operational
concerns such as updating production technology, obtaining parts and supplies and
implementing efficient delivery systems take on even greater importance in today’s competitive
environment when consumers want customized products and services delivered immediately.
Production cost are a major expense for organizations, especially for manufacturers.
Organizations therefore try to limit the cost and increase quality by improving how they obtain
materials, set up production facilities and produce goods and services. This module will provide
the students an overview of operation management its processes and system of implementation
in the organization for quality service. It also provides students an understanding the importance
of operation management towards efficiency, productivity and effective service organization.
Learning Outcomes
At the end of the course:
1. The students must acquire knowledge and skills in the application of operation
management techniques;
2. The students must be able to compare the theories to actual practices the
application of operation management systems and processes.
Learning Content
1.
2.
3.
4.
5.
The Concept of Operation Management?
Importance of Quality Management and Control
Leadership for Total Quality Management
Total Quality Management and Implementation
Customer Satisfaction on Services
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Chapter 1
CONCEPTS ON OPERATION MANAGEMENT
What is Operation Management?
OPERATION MANAGEMENT - refers to the complex set of management activities involved
in planning, organizing, leading, and controlling an organization's operations. At one time,
operations management was considered the backwater of management activities-a dirty
drab necessity.
*OPERATIONS refer to the way that members of an organization transform inputs-labor,
money, supplies, equipment, and so on-into inputs-goods or services. the practice of
operations is complex. It takes all the nitty-gritty, day-to-day activities by which the members
of an organization strive to reach their goals. managers at Ernst & Young take seriously the
“nitty-gritty” operations matter of making office space useful.
Operation Management is chiefly concerned with planning organizing and supervising in the
context of production, manufacturing or the provision of service.
•
Operation Management is an area of management concerned with designing the
process of production and redesigning business operation in the production of goods
and services.
What are Goods and Services?
Basically, a product is tangible offering to a customer, where as a service is an intangible
offering. The former is usually a onetime exchange for value. In contrast, a service usually
involves a longer.
The value of a product is inherent in the tangible offering itself, for example in the can of
paint or pair of pants. In contrast, the value of a service often comes from the eventual benefit
that the customer perceives from the time while using the service. In addition, the customer often
judges the value of a service based on the quality of relationship between the provider and the
customer while using the service.
Operations Management Specific Roles
Chief Operating Officer
The chief operating officer (COO) also called the chief operations officer, is one of the
highest-ranking executive positions in an organization. The COO is responsible for the
daily operation of the organization.
Operation Manager. A useful definition of the role of an operation manager comes from:
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*Operation management is the administration of organization/business practices to
create the highest level of efficiency possible within an organization.
*Operation management is concerned with converting materials and labor into goods
and services as efficiently as possible.
What is a system?
A system is an organized collection of parts that are highly integrated to accomplish an overall
goal. The system has various inputs, which go through various processes to produce certain
outputs, which together, accomplish the overall desired goal for the system.
What is an Operation System?
The primary activities in operations management is a system- they are all integrated and align
each other. The operation manager’s job is to ensure0 they are all effectively and efficiently
working together in order to produce the desired goal.
A numerous activity involved in the operation management. Where they fit into an organization?
How are they connected?
An Operation System includes the following:
1.Inputs – such as expertise, best practices, funding, equipment, facilities, technologies, as well
as the customers feedback and the overall organization’s priorities.
2. Processes – such as planning (capacity, product and service design, production, facilities,
jobs, inventory, quality control etc.) and managing productivity to produce high quality products
and services
3.Outputs- high quality products and services
4.Outcomes- very satisfied customers
The Operations System: A Model
•
Any organization can be viewed as a system, a set of related and interacting subsystems
that perform functions directed at reaching a goal. These subsystems, can in turn, be viewed
a separate system.
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Conceptual Model of an Operation System
•
The transformational process from input to output varies from organization to
organization
•
Physical transformations of raw materials into finished goods occur mainly in productions
organizations, although service organizations also transform materials (i.e., forms and
writing equipment) into finished goods (i.e., completed tax forms). Transportations
involves locational transformations, while retailing involves exchange transformations
(i.e., money for goods). in legal and accounting firms, there is usually an information
transformation in which information is transformed from one form into another.
•
The feedback loop in figure 21-1 represents the information gained by people at an
organization during the entire process. This information makes it possible for them to
monitor the system's performance and decide whether corrective changes are needed.
As we emphasized in the previous chapter, this feedback loop is the key piece of the
control function.
PRODUCTION ORGANIZATION
•
produces physical goods, such as cars, computers, plastic bottles, or paint
SERVICE ORGANIZATION
•
in contrast, produces largely intangible goods that cannot be stored. Doctors, lawyers,
accountants, and barbers, for example, produce customized labor in the form of advice
and services that reflect the needs of individual consumers.
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CHARACTERISTICS OF PRODUCTS AND SERVICES
PRODUCT
SERVICE
Output
Tangible
Intangible
Output Consumption
Over time; can be stored
Immediate;
stored
Nature of work
Producer Intensive
Labor Intensive
Customer contract
Minimal, indirect
Direct
Customer participation
Little or none
Essential
cannot
be
The Importance of Operations Management
To improve productivity: A measure of efficiency
•
PRODUCTIVITY- the ratio of output to input, is a measure of a manager's or an
employee's efficiency in using the organization's scarce resources to produce goods and
services. the higher the numerical value of this ratio, the greater the efficiency. Ernst &
Young managers use “hoteling” to affect both parts of this ratio. They seek to cut inputs
(space costs) and to boost the output of travelling accountants.
A TOTAL-QUALITY APPROACH TO OPERATIONS IMPROVEMENT
•
The quality movement, with such approaches as small-scale continuous improvement
processes and large-scale radical redesign of processes, is directly affecting productivity
and measures of efficiency.
Types of Productivity Ratios
There are two basic types of productivity ratios:
•
Total Productivity
relates the value of all output to the value of all input, using the ratio total output/total
input.
•
Partial Productivity
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relates the value of all output to the value of major categories of input, using the ratio
total output/partial input.
Uses of Productivity Ratios
•
Productivity ratios can be calculated for a specific time period which measures the
efficiency of operations at that time, or they can be compared with other ratios over time,
as a measure of gains or losses in productivity
In recent years, U.S. manufacturers have tried to boost productivity by closing plants, downsizing,
laying off production workers, and selling off failing or unwanted businesses. Still, as an economic
system, the United States lags behind Japan, South Korea, Great Britain, Norway, Sweden,
France, and other countries in productivity growth. Many government officials and executives re
searching for solutions to this problem.
Many experts say the problem is the emphasis on productivity itself. They charge that, in trying
to improve “the numbers”-quantitative measures of productivity-too many US managers have
focused on capital investment in automation as a way to reduce labor costs. This short-term
focus has caused them to overlook benefits in investing in the organization's human capitalemployees and their skills-and improving quality.
TO MEET CUSTOMERS' COMPETITIVE PRIORITIES
•
Most companies develop competitive problems when managers lose sight of operations'
primary reason for being: to produce quality products and services that consumers want
at prices that seem reasonable. This relates back to measures of organizational
effectiveness: the ability to set the “right” goals, ones that build on organizational
strengths and meet the needs and wants of potential consumers. Of course, individual
needs and wants vary widely, as do price perceptions.
•
Rather than try to be all things to all consumers, effective managers make strategic
decisions about how their organization can best meet their customers' competitive
priorities, and then adjust their operations accordingly. After all, consumers use an
organization's products and services in their own competitive contexts. The four major
competitive priorities for operations management are pricing, quality level, quality
reliability, and flexibility.
PRICING
•
For many consumers, price is a major consideration, either because their funds are
limited or because the differences between a higher-priced item and a lower-priced item
do not seem justified. One task of operations manager is to keep costs down so that the
organization can offer “good” prices and still make a profit.
QUALITY LEVEL
•
Quality level has two components: high-performance design and fast delivery time.
Characteristics of high-performance design are superior features, close tolerances, and
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greater durability of the product or service. An example is Maytag washers and dryers.
In an industry marked by highly competitive products and prices.
QUALITY RELIABILITY
•
Quality reliability means consistent quality and on-time delivery. Consistent quality
measures the frequency with which design specifications are met. McDonald's
restaurant is world-renowned for uniformly achieving their design specifications.
FLEXIBILITY
•
Flexibility refers to both product and volume flexibility. Product flexibility means that
product designs can be changed quickly and that managers emphasize making such
changes to please customers-they customize products to individual preference. In this
case, the level of output for an individual product is necessarily low because the firm
competes primarily on its ability to produce difficult, one-of-a-kind products. this is the
exact opposite of mass production, where standardization of the product has occurred
and the producer makes large quantities of one item.
•
Volume flexibility is the ability to make quick changes in the rate of production as a
demand for a firm's product changes. McDonald's is a good example: managers
increase or decrease their workforce from hour to hour to meet anticipated changes in
customers’ demands.
MEETING MULTIPLE PRIORITIES
•
All four of these competitive priority-pricing, quality level, quality reliability, and flexibilityinvolve doing something with customers' preferences in mind. the primary problem with
trying to meet competitive priorities is that they often conflict. consumers want
reasonable prices, but they also want high quality levels, reliability, and flexible, featureladen products and services.
Designing Operations System
• Becoming aware of competitive priorities is just one way that managers can match
operational plans to strategic plans. These operational plans, in turn, affect the day of
operations systems. Designing an operations system involves making decisions about
what and how many products or services will be produced, how and where they will be
produced, and who will produce them.
WHAT TO PRODUCE
DESIGN FOR MANUFACTURE (DFM)
•
One of the most promising trends in this area is design for manufacture (DFM), which
streamlines design to simplify assembly. Bell Labs successfully used this technique to
design a new digital loop carrier, a device that transmits phone signals through fiberoptic cable. instead of ironing out production problems on the factory floor, design
engineers and production engineers worked together to select plastics that could stand
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up to the heat of manufacture and to identify ad eliminate potentially costly engineering
mistakes before production began.
COMPUTER-AIDED DESIGN (CAD)
•
At one time, product design was a time-consuming multistep process that involved the
creation and testing of prototypes, or working models. Today, this process is faster and
cheaper thanks to computer-aided design (CAD), which allows product design,
drafting, and simulated testing to be performed interactively on a computer.
•
Because much of a product's cost is determined by its design, most manufacturers are
turning to simultaneous or concurrent engineering, where design and manufacturing
engineering work together to simplify a design.
BILLS OF MATERIAL
•
The benefits of CAD do not stop there. Because the design is stored in the computer
system, it can be “exploded” to create a bill of materials, a listing of the types and
numbers of parts needed to make each unit. As we will see later, this information is
crucial for ensuring that the organization has adequate supplies of the right materials on
hand when needed.
THE COMPLEX PRODUCTS OF CAPACITY PLANNING
•
Forecast future demand, including, insofar as possible, the likely impact of technology,
competition and other events.
•
Translate these forecasts into actual physical capacity requirements.
•
Generate alternative capacity plans to meet the requirements.
•
Analyze and compare the economic effects of the alternative plans
•
Identify and compare the risks and strategic effects of the alternative plans
HOW MANY TO PRODUCE
PLANNING OPERATION SYSTEM
The planning of products and services (the outputs from the system includes market research
to:
•
•
•
•
Clarify the needs and wants of potential groups of customers as well as how those needs and
wants might be met with certain products and services.
Clarify how the new products and services should best be provided to those target market.
Identify competitors as well as potential collaborators
Suggest the best terms in pricing for the products and services.
The results of the research produce specification of products or services.
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CAPACITY PLANNING
•
The second decision in designing the operations system is how many products-or how
much service-will be produced. This is called capacity planning, a process of forecasting
demand and then deciding what resources will be needed to meet that demand.
9
•
Long-range technological forecasting- which can extend five or ten years into the futuremay be needed to anticipate of forecast future capacity demands. Unforeseeable eventsnew technological discoveries, wars, recessions, embargoes, and the effects of an
unknown inflation rate-cannot always be factored into forecasting equations.
There are other variety of other tools that could be useful.
Four Steps to Forecast Total Demand
•
•
•
•
How to use the right forecast technique
What is demand forecasting
What are the best demand
How can it help the organization
HOW TO PRODUCE
1. MAJOR TECHNOLOGICAL CHOICE
•
Does technology exist to produce the product? Are there competing technologies among
which to choose? Should innovations be licensed from elsewhere, such as foreign
countries, or should an internal effort be made to develop the needed technology?
2. MINOR TECHNOLOGICAL CHOICE
•
Once the major technological choice is made, there may be a number of minor
technological process alternatives available. The operations manager is involved in
evaluating alternative transformation processes for costs and for consistency with the
desired product and capacity plans. Should the process be continuous? A continuous
process, which is carried out 24 hours a day to avoid expensive start-ups and
shutdowns, is used by the steel and chemical industries, among others.
3.SPECIFIC-COMPONENT CHOICE
•
What type of equipment (and degree of automation) should be used? Should the
equipment be dedicated (tied to a specific purpose) or general purpose (leaving open
the possibility of using it to make other products)? To what degree should machines
replace people in performing and controlling the work? Increasingly, human workers are
being used to program and monitor automated equipment, rather than doing the work
themselves.
•
CAD/CAM (computer-aided design and computer-automated manufacturing) is an
integrated approach in which the computer software that is used to design a product can
be used to translate the design into a computer program that will operate the NC or CNC
machine. Typically, only companies that have high-volume production can afford to
invest in such a system.
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4. PROCESS-FLOW CHOICE
•
How should the product or service flow through the operations system? This final
process-selection step determines how materials and products will move through the
system. Assembly drawings, assembly charts, route sheets, and process flow charts are
used to analyze process flow. Analysis may lead to resequencing, combining, or
eliminating operations to reduce materials-handling and storage costs. In general, the
less storage and delay involved in the process, the better.
FACILITY LAYOUT PLANNING
Choosing where to locate the production facility is one of the most important design decisions.
The objective of location planning is to position the capacity of the system in a way that minimizes
total production and distribution cost.
WHO WILL DO THE WORK
The final decision in designing the operation system concern the structure of the individual
job- how the work will be done and who will do it. Job designed is reflected in labour expenses
and inefficiencies and mistakes will ultimately affect operating cost.
•
Issues
* the level of skill of employees
* Work place safety of employees
* Work place cooperation
1. Worker skill
-Employers have always expected to provide some on the job training for new employees. The
skills shortage is expected to get worse as computers and other sophisticated technology
become more common place. As a consequence, many corporate executives have committed
their organizations to take pre- emptive action by contributing time and money and talent to the
improvement.
2. Worker Safety
-Job design must also take into account health and safety requirement, this especially
through to manufacturing companies and factories such as injuries among production workers
and other white collar job workers such as computer operator.
JOB AND WORK DESIGN
•
•
An arrangement in the work place that has the objective of ever coming employee alienation and
job dissatisfaction that comes about from mechanical and repetitive task in the work place.
Is a core function of human resource management and it is related to the specification of
contents, methods and relationship of jobs in order to satisfy technological and organizational
requirements.
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WORK FLOW MANAGEMENT
Workflow management is creating and optimizing the paths for data in order to complete
items in a given process. Workflow management includes mapping out the workflow in
an ideal state, finding redundant task, automating the process, and identifying the
bottlenecks or areas for improvement.
PLANNING OPERATIONS
Production and Scheduling
Production Planning are transformed into the desired product or service. Consideration include,
for example:
•
•
•
•
Are there technologies currently or soon available that could expedite the production?
What is the cost associated with developing and producing the product?
What are the estimated demands of customers for the next six months? These estimates drive
the scheduling of the production or service?
What components are needed, in total, to produce the product or service?
This activity also includes developing a detailed map of activities required to obtain, assemble,
integrate and test the product or service before it is provided with customers.
Scheduling
A critical activity in ensuring that the operation system is highly effective and efficient is
coordinating (Scheduling) the timing of activities, to organize, monitor and optimize the
equipment, people and production activities
Teaching Activities and Learning Activities
Direction: Answer the following questions based on your readings on the previous
chapter. Write T if the statement is true and write F if the statement is false in the provided
space before the item. 10 pts.
____1.An Organization is viewed as a system interacting within subsystem.
____2.Transformational process from input to output varies from organization to other
organization.
____3.Transportation involves locational transformations while retailing involves exchange
information.
____4.Productiion organization produces physical goods such as cars, computers while service
organization produces intangible goods that can not be stored.
____5.Productivity is the ratio of output to input
____6.One of the major competitive priorities for operation management is transformation of
products.
____7.Service organization include physical goods and other products.
____8.Production organization include intangible goods such as labor and capital.
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____9.Productivity ration can not be calculated for specific time period which measure the
inefficiency of operation.
____10.Specific component choice is a continuous operation which carried out for 24 hours a
day.
Assessment Task/s
Discuss briefly the conceptual model of operation management and its application to
both private and public organization. 10 Pts.
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Chapter 2
Quality Management and Control
Quality Management
A very concise definition is the quality of the products or service in simple term is its
suitability for use by the customer. Quality does not mean an expensive product, on the contrary,
it is fitness for use of the customer.
International Organization for Standardization (ISO) the world body for standard
formulation was founded in the year 1946 and has its headquarters in Geneva Switzerland most
countries in the world are member of ISO. The national standardization bodies of various
countries represent their countries in ISO. ISO is known all over the world because of its path
breaking standard ISO 9000, release first time in the year 1987. The definition of quality as per
the ISO standard id “The totality of features and characteristics of a product or service, that bear
on its ability to satisfy a given or implied needs.
Thus, the standard definition of quality is common both to products and services. It is
essentially satisfying the customers need, both stated and unstated (implied).
Chain Reaction
The importance of quality will be clear from the chain reaction and account of quality
envisage in Japan in the 1950’s the ‘chain reaction’ is depicted in the figure as follows.
Quality improvement result in improved productivity, as is clear from the figure by eliminating
defects, non-value adding activities and rework, additional resource capacity is created.
Improved quality also reduces production cycle time and machine time. Less material required
due to reduction of scarp and rework.
14
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Improved Quality
Cost decrease due to fewer defects, lesser
rework, fewer delays and better use of Men,
Machine, and Materials
Improved Productivity
Capture market with better
quality and lower prices
Stay in business
Provide more jobs
Chain Reaction Structure
Supply Chain Management
Supply chain management (SCM) is the active management of supply chain activities to
maximize customer value and achieve sustainable competitive advantage. It represents a
conscious effort by supply firms to develop and run supply chains in the most effective and
efficient ways possible. Supply chain activities cover every from product development, sourcing,,
production, and logistics as well as the information systems needed to coordinated this activities.
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Dimensions of Quality
Quality has many dimensions. The dimensions of quality are nothing, but the various
features of a product or service. We will discuss some of them briefly.
Product Quality
1. Functionality Functionality refers to the core features and characteristics of a product. The
definition of functionality as per ISO/IEC 9126: 1991:
“A set of attributes that bear on the existence of a set of functions and their specified properties.
The functions are those that satisfy stated or implied needs”.
For instance, a car has to have a seating capacity for five persons; a steering wheel, an
accelerator, a break, a clutch, head lights, gears, four wheels, etc. The functionality of a car
represents each one of the functions mentioned above and many others not listed above. Thus,
functionality refers to those functions that will satisfy a customer.
2. Reliability
A car should not breakdown often. This is the reliability attribute to quality.
Reliability is measured by mean (average) time between failures (MTBF). Reliability is an
indicator of durability of products. For instance, the MTBF of a car can be specified as 1000
hours of running of 1000 kilometers.
3. Usability
A product should be easily usable. The customer should be able to use the
product easily without the help of experts. For instance, repairing a car may need the help of a
mechanic, but the car can be driven by the owner himself, it he is trained accordingly. Thus,
each product should be made so that a person can use it with minimum training. Usability can
also be measured by the time taken for training an operator for error-free operation of a system.
4. Maintainability Maintainability refers to the ease with which a product can be maintained in
the original condition. Products may become defectives while in use or transit. It should be
repairable so as to retain the original quality of the products at the lowest cost at the earliest
possible time. This applies to software, automobiles, household items such as refrigerator, air
conditioners, personal computers, etc.
5. Efficiency This is applicable to most products. Efficiency is the ratio of output to input. If a car
gives a mileage of 20 kms per liter of gasoline and another car with identical features gives 15
kms per liter, then the former is more efficient than the latter. Another example is the brightness
of a lamp at a given input voltage.
6. Portability This is more important in the context of software. Portability is defined as a set of
attributes that bear on the ability of software to be transferred form one environment to another.
The environment may be organizational, hardware or software environment. Any program
purchased, such as accounting software, should be usable in many different machines without
any problems. This is portability. This feature is applicable even to consumer goods such as
bulbs, razor, etc.
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Service Quality
Unlike products, every service is made to order. Therefore, the service quality has additional
features. In availing a service, the customer interacts more with the service provider. The quality
of service depends to an large extent on understanding the correct requirement of the customer
through such interactions. Each service has to be designed specifically for the customer. Hence,
quality of service design is an important feature. Service delivery is another feature of service
quality. Thus, the additional features of service quality are:
•
•
•
Quality of customer service
Quality of service design
Quality of service delivery
Each one of the above may have further dimensions. For instance, quality of service delivery
includes timeliness of service and the number of defects on delivery.
1. Quality of Customer Service Customer service is important in every business. In a service
industry, meeting customers and funding out their implied requirements is more challenging.
Therefore, ability to satisfy customer depends on the quality of customer service. This includes
but is not limited to:
• How well the customer is received?
• How well the implied requirements are elucidated?
• How well the customer is treated/handled/satisfied?
2. Quality of Service Design Since service are usually made to order, it is important that service
is designed as per the requirements of the specific customer. For instance, a software product
developed for a specific bank takes into account the unique requirements of the bank. Quality of
service design in turn depends on the quality of customer service.
3. Quality of Delivery Quality of delivery is important in any sector, but more crucial in case of
services. Defects on delivery be zero to satisfy the customers
Additional attributes of quality, which are applicable to both products and services, are given below:
1. Timeliness Delivery on schedule as per requirement of the customer is a must both in the product
sector as well as in service sector. No customer like waiting. Any anticipated delay in schedule should
be communicated to customer well in advance. Timeliness is critical for many products and services.
Delay in arrival of aircrafts or train are instance of poor quality encountered in day-to-day life.
2. Aesthetics A product or service should not only perform well also appear attractive. Therefore,
aesthetics is an important element of quality. Aesthetic may include, but not limited to the appearance
of the product, the finish, colour, etc. customer will buy only those refrigerators or TV receivers or
music system, which look good.
3. Regulatory Requirement
Regulatory requirements as stipulated by the local and federal
governments should be fulfilled by the product or service. For instance, an automobile has to meet
Euro II Standards in respect of emission to minimize environmental pollution. Similarly, there are
regulatory requirements in respect of safety of electro-medical products.
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4. Requirements of Society The products should fulfill both the stated and implied requirements
imposed by society. The customer requirement should not violate society or regulatory
requirements. Thus to satisfy a customer, a product cannot be built is such a way as to violate the
requirements of society of a safe and healthy product. For instance, providing belts for person
sitting in the front seat in a car is a requirement of the society. Hence, the car manufactures should
provide belts for the passenger travelling in the fronts seat.
5. Conformance to Standards Product or service should conform to the stated and implies
requirements of customers. Where applicable, they should conform to applicable standards such as
national standards, international standards and industry standards. For instance, Electro-Magnetic
Interference (EMI) from a PC should be within the limits prescribed by the corresponding standard.
Juran’s Quality Planning Roadmap
•
•
•
•
•
•
•
Identify your customers.
Determine their needs.
Translate them into your language.
Develop a product that can respond to the needs.
Develop processes, which are able to produce those product features.
Prove that the process can produce the product.
Transfer the resulting plans to the operating forces.
Philip B. Crosby (1926) Crosby was Vice President of International Telephone & Telegraph (ITT). His
absolutes of Quality are very relevant to TQM.
Crosby’s four absolute of quality
1. Quality is conformance to requirements, nothing more nothing less and certainly not
goodness or elegance.
2. Quality has to be achieved by prevention and not by appraisal.
3. The performance standard must be zero defects and not something close to it.
4. The measurement of quality is the price of non-conformance, i,e. how much the
defects in design, manufacture, installation and service cost the company. It is not
indexes, grade one or grade two.
Armand V. Feigenbaum He was President of America Society of Quality Control (1961-1963). He said
“Quality is in its essence a way of managing the organization”. He suggested the following methodology
for cycle time reduction.
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Feigenbaum’s cycle time reduction methodology
1.
2.
3.
4.
5.
6.
Define process.
List all activities.
Flowchart the process.
List the elapsed time for each activity.
Identify non-value adding tasks.
Eliminate all possible non-value adding tasks.
Kaoru Ishikawa (1915-1989) A Quality Guru from Japan, he strongly advocated the use of cause
and effect diagrams to provide a true representation of the organizational impacts and
procedures. He developed Fishbone or Ishikawa diagram for cause and effect analysis.
Other Quality Gurus includes James Harrington, Taguchi and Shingo.
The reader should be familiar with some of the basic terms related to quality to understand TQM.
Quality Control (QC)
Quality Control or QC may be defined as: The operational techniques and activities that are
used to fulfill the requirements for quality. Juran given 3 steps of QC:
1. Evaluate actual operating performance
2. Compare actual performance to goals
3. Act on the difference
In simple terms, QC is inspection or appraisal of products and services to endure that the
stated requirement is fulfilled. This was the only techniques practiced during World War II.
Since it was found that QC was essential but not sufficient, Quality Assurance techniques
were developed after the war.
Quality Assurance (Qa)
The definition of quality assurance is: All the planned and systematic activities implemented
within the quality system, and demonstrated as needed, to provide adequate confidence that an
entity will fulfill the requirements for quality.
The purpose of QA is to fulfill requirement of an entity, i,e. product or service, with adequate
confidence by the supplier. This requires implementation of all activities planned for building
quality into the product. Such planned activities are to be implemented systematically within the
purview of a documented quality system. Building quality into the products requires the following.
• Quality of Design
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•
•
•
Quality of Conformance
Quality of Performance
Quality of Service
Quality of Design It refers to how well the product or service has been designated to meet the
current and future requirements of customers and add value to all the stakeholders for any
organization are:
• Customers
• Employees
• Suppliers
• Owners
• Society
Quality of design involves all activities that will result in a successful design. It necessarily
includes
Finding out the customer’s requirements.
Quality of Conformance This indicates the consistency in delivering the design product.
Product quality in turn depends on the quality of all processes in the organization. Therefore, it
involves all activities that will ensure the conformance of the products for its requirements
consistently.
Quality of Performance It is indicator of the performance of the end product. This is turn
depends on the quality of design (including the reliability of the product) and quality conformance.
Quality of Service Selling a products is not the end of the business. It is the quality of
associated services rendered that adds value to the product. Quality service involves all activities
that will enable the customer to procure and use the product without any hassles.
PDSA for Continuous Improvement
We have two PDSA cycles, one for the TQM journey as a whole in the organization
and the other for each improvement action.
Act
Plan
Study
Do
PDSA
PDSA within PDSA
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The outer PDSA is for TQM for the whole organization. The PDSA in the Do phase of
TQM is that for improvement project. Once an improvement project is chosen, a team is formed
and a clear goal set, then the improvement team studies the process in depth, carries out
brainstorming, consults experts and comes out with suggested strategy and action plan. The QC
should analyze the proposed solution of the improvement team.
Plan
•
•
•
The improvement team has to make a plan addressing the following points, in particular.
What is the current situation/ level of performance?
What are the expected results/Level of performance?
How do they prosed to go ahead to find out the best solution?
Do
After the QC has given its seal of approval, the approved action plan has to be
implemented in the Do phase on a pilot basis.
Study Phase
Once an improvement action is implemented on a trail basis then the Do phase is
completed and the study phase start. In this phase, the improvement team members have to
assess the effectiveness of the suggested solutions. The improved process has to be
continuously monitored during the trial period. Performance data should be collected at regular
intervals.
Act Phase
If the QC is convinced that the process has been improved and the expected results are
achieved, then the Act phase commences. In this phase procedures are modified and issued.
Thus, new processes as are defined and implemented on a continuing basis in the Act phase.
Agenda for QC Meetings
TQM is a process of continuous change improvement. Every process within an
organization has to be assessed for possible improvement. However, the process, which give
higher return on investment, should be taken up first. Hence, at any time depending upon the
size of the organization, many improvement teams will be active. Therefore, the QC has to meet
at regular intervals and will consider the following:
a.) Approving new initiatives for improvement and forming teams
b.) Discussing progress of on-going improvement action
c.) Approving solutions suggested
d.) Reviewing the effects of past actions
Schedules for Improvement Actions
Schedules are not only important for normal operations, but also for improvement
activities. At the planning stage for each improvement action, a detailed report should be
formulated by the improvement team indicating the time schedule for finding out solution, putting
into practice ,assessment and confirmation. The TQM facilitator should also keep a watch on the
schedules and take corrective actions where necessary.
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Communicating Success Stories
Application of the CEO on the QC will definitely motivate the employee to improve. Such
motivation may only stay for a while, the permanent motivation can come only through employees
coming to know the success stories due to TQM program in their organization. Therefore, one
of the job of TQM facilitator is to communicate the improvement made and its benefits to all the
stake holders. Such success stories should be widely circulated within the organization and even
outside.
Implementation Tips for Winning Organization
According to Tom Peter’s, the following are the requirements of winning organization
1. Total Quality Management
2. Reengineering
3. Leveraging knowledge (sharing information rather than hording i)
4. Curious corporation
5. Virtual Organization
6. Empowerment
Quality Planning
In order to consistently meet the customer requirements, the quality of 4 M’s namely- Man,
Machine, Material and Methods need to be assured. The quality of the 4M’s are to be identified
in the form of quality objectives. The objectives should be established for all the functions. The
functions include suppliers, purchase, product design, engineering, production, final inspection
service, etc.
Quality Planning refers to the activities that establish the objectives and requirements for quality.
It involves the following:
• Quality objectives to be met
• Specific of Qc practices
• Resources needed
• Sequence of activities
Quality Improvement
This process aims at attaining unprecedented level of performance, which are significantly better
than the past level.
Strategic Planning
Strategic planning is important for any business. It involves making plan for the following:
• Business value
• Investment in machinery and equipment
• Manpower to be hired
• Product diversification
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• Market to be served
• Strategic for improving profits
•
Strategic planning is carried out generally at annual intervals using formal structured approach.
The strategic planning is kept confidential due to obvious reason. Usually organizations treat
strategic planning and quality planning as separate and isolated activities.
The quality improvement planning should focus on the needs of current and future customers
and support the strategic and business goals of the organization.
TQM addresses the concept of product quality, process control, quality assurance and quality
improvement, all of which are aimed at customers delight. Therefore, it is important to get the
right meaning, interpretation, and understanding of the term quality and related terms. This will
provide a strong foundation for TQM.
Teaching Activities and Learning Activities
Direction: Write T if the state is true and write F if the statement is false in the provided
space before the item. 15 Pts.
____1. Aesthetic is an important element of quality service.
____2. Timeliness is critical for many product and service.
____3. Quality of service is a designed as per requirements are elucidated.
____4. Quality of customer service implied requirements are elucidated.
____5. Conformance to standard should conform to the requirements of the customer.
____6. Regulatory requirements include timeliness and service quality.
____7. Service quality include quality of service delivery.
____8. Quality assurance requires all activities planned for quality products
____9. One of the major competitive priorities for operation management is transformation of
products.
____10. Quality service delivery includes timeliness of service and the number of defects or
delivery.
____11. Quality as per ISO standard is the totality of features and characteristics of a product
or service to satisfy client or costumers.
____12. Quality improvement is improving productivity and eliminating defects.
____13. The Juran’s quality planning includes need assessment before processing a quality
product.
____14. Service organization include physical goods and other products.
____15. ISO is known all over the world because of its path breaking standard ISO 9000 and
first release n 1997.
Flexible Teaching Learning Modality
Online:
Zoom and Edmodo
Remote:
Module, Exercises, Individual activity, Report/ Term Paper
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Assessment Task/s
What is quality service. Explain and identify the features of quality service in the community
or to the costumers. 20 Pts.
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Chapter 3
Leadership for Total Quality Management (LTQM)
Total quality management include leadership for Total Quality Management (TQM). In fact,
the Leadership for TQM is solely responsible for the for the success of the TQM as it is responsible
for selecting people, forming teams, providing resources and establishing the system in the
organization. According to “Harrington” between 70 to 85 percent of all errors can only be corrected
by management. Thus, it is necessary that the top management understands TQM and lead the
organization through the TQM journey.
Deming’s 14 Points for Top Management
1.Create constancy of purpose for improvement of products and services
The top management must believe that their business will continue for 100 years. Such a confidence
will motivate them to aim long term success. It will infuse a constant quest for innovation,
improvement of processes, products and services. They will invest in research to innovate new
products and will train their employees without the fear of losing them.
2. Adopt the new philosophy
The new philosophy is to practice the Japanese CWQC (Company Wide Quality Control) which was
renamed as TQM. The new philosophy means elimination of waste, delays and radically changing
the work culture. The new philosophy means, Just- in- time (JIT) manufacturing if possible, with zero
defects.
3.Cease Dependence on Mass Inspection
Doing things right and doing it right the first time would reduce the dependence and inspection. TQM
is aimed at eliminating inspection in the long run through prevention.
4.End the Practice of Awarding a Business on the Basis of Price Tag Alone.
This point addresses supplier partnership. The supplier should be selected on the basis of the
following parameters:
• Quality
• Price
• Delivery
• Service
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5.Constantly Improve the System of Production and services
The process in the organization need continuous improvement. TQM is aimed at continuous
improvement of processes so that the quality of products and services improve continuously. The
very purpose of TQM is the constant improvement of the system for production and services.
6.Institute Training
The abilities of the employees should be improved and harnessed only through training. Deming
advocates Management need training, to learn more about the organization, all the way from
incoming material to the customers. Today every Japanese employee receives six weeks of training
every year.
7.Adpot and Institute Leadership
Deming urges that the senior employees must conduct themselves as leaders rather than managers.
The Leader and the Manager
Leader
Proactive
Coaches
Understand process
Moves around
Improve process
Communicate frequently
Seeks suggestions
Manager
Reactive
Find fault
Doesn’t care to understand
Sits in his chair
Maintain processes
Communicate rarely
Questions
8.Drive Out Fear
Employees should be encouraged to suggest improvements, ask questions, about the existing
process, etc. If freedom to express new ideas is curtailed, then the employee will continue to do
what they are doing. This will stand improvement.
9.Break Down Barriers Between Staff Areas
The team over the years become water light compartments. Every team may prove that it is the
best. But organization as a whole may be doing poorly due to lack of communications between the
teams. TQM dictates removal of barriers between the department.
10.Eliminate Numerical Quota for the Work Force
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Sewing a target for production say producing 1000 bolts per shift, etc, may affect the quality of
workmanship. This forces the workers to ignore quality and concentrate on quantity. This is
detrimental to the organization. On the contrary, standards from quality workmanship could be
prescribed.
11.Eliminate Numerical Goals for People in Management
Setting goals without the necessary where it is does not work. Goals such as growth of business for
15% or reduction of quality cost by 5% given in a new year day will end like New Year promises,
such improvement arise out of improving processes and not by passage of time.
12.Remove Barriers the Rob People of Pride of Workmanship
The organization should establish the right processes and a right system for quality management.
This will lead to carry out job correctly. If the work is carried out correctly, it gives pride to those who
did. Every employee should be encouraged to work as much as he can.
13.Encourage Education and Self Improvement for Everyone
Employees should be encouraged to pursue higher education and training while in service, for
improving the skills or updating the knowledge. If an employee undergoes education or training, it
will improve his ability, which will be beneficial to the organization. Hence, employees should be
motivated and encouraged to improve their knowledge and skills through various channels.
14.Take Action Accomplish the Transformation
The top management should understand the above 13 points and then enable their Employees. They
should interpret the 13 points properly and educate their employees appropriately. They should
identify all the processes in the organization and improve each one of them using PDSA cycle.
Therefore, the final point is about implementation of 13 points, which in essence are the TQM
principles and strategies.
Ten Strategies for Top Management
1.Proactive management
2.Adventurous and bold change management
3. Do It Right First Time (DIRFT)
4. Continuous preventive action
5.Care for little things and accumulate gains
6.Ensure economic performance
7.Practice by walking around
8.Measure success
9.Never rest on laurels, continue to improve
10.Build a virtual organization
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1.Proactive Management
The leader has to be proactive. They must foresee what will happen in the future and take
advance action to prevent the occurrence of the problems as prevention is always better
than cure. If the management is actively engaged in managing the organization then they
will be able to foresee the problem.
Proactive Management Needs Proper System
Proactive management needs a proper system in the organization. The problem can be identified
before occurring, only if there is a proper system in the organization. Unless a system is in order,
the roles and responsibilities are clear, the organizational structure is in place, the procedure set and
the system of recording everything laid out, it will be extremely difficult to think a prevention. Thus,
proactive management calls for establishment of proper system for quality as well as the operation.
TQM Calls for Proactive Management
TQM envisages taking preventive actions so that mistakes do not occur. Quality can be improved
only through preventive actions. The corrective actions resulting out of failure is only a post mortem.
The failure is going to affect someone, it could be an external of internal customer or an employee.
2. Adventurous and Bold Change Management
A. Nobody Like Change. Human beings by their very nature resist change. Even ,if a change is
going to make them much more comfortable. They can not visualize that the change are in fact for
their good. They resist change as they feel they may have to work more or learn new techniques.
Therefore changing anything in the organization is a difficult task and requires tactful handling.
B. Change is Essential. An organization cannot progress without change. It has to continuously
change for better. There should be on- going rethinking and restructuring of the organization so that
the organization is receptive to the needs of the customers. Changes are required in a number of
activities such as in the process, machinery, materials inventory and control. Change management
is an important activity in TQM environment and is crucial for a continuous improvement of
processes in an organization.
C. Be Adventurous. Successful people are those who have taken the challenges and grown beyond
expectations. This calls for adventurous decision making and high self-esteem among the senior
management person. They should visualize the improvements needed and make every effort to
achieve. If the organization wants to maintain status quo, it will not improve. In fact, most successful
executives should be dreamers with the necessary drive. They should aim high and make every
effort to achieve.
3.DIRFT – Do it Right First Time
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Take Right Decisions. In every organization a number of decisions have to be taken by the CEOs,
managers and supervisors. They are the leaders in an organization should adopt DIRFT. The
question is why people do things wrong and do it and over again?
The leaders should carry out the sequence of activities of making decisions:
• Plan the decision- weigh the pros and cons
• Foresee the impact of the decision on the organization
• Take opinion of the right people
• Involve the concerned employees who will be affected by the decision
• Implement the decision
• Persist
Why things are done wrong?
1. The employee does not know what to do clearly, leave alone how to do
2. If he knows how to do, he is not motivate enough to do it right the first time
3. He may not have the right tools to do a good job
4. He does not have the necessary education or training to know how to DIRFT
5. He is not proud of the job he is doing
6. He does not get appreciated when he does it right
7. Probably his seniors have trained him to do the wrong way
Problems of not Doing it Right
1. In some cases, not doing it right the first time may result in not doing it right ever, thereafter.
2. Leads to unnecessary expenditure
3. Increase the failure cost
4. Demotivate employees and customers
5. Causes hassles to employees and customers
6. Bring down the reputation of the organization
7. Leads to schedule slippages.
Requirements for DIRFT
1. Define the requirement for each employees
2. Provide where to achieve the requirements
3. Keep on motivating and encouraging the employee
The First Time and Every Time- refers to every activity in the organization. It is not the making of
final product or services, but also many things done by the employees in the organization on a daily
basis. They should do only the right things- right first time and every time. Therefore, management
cannot just define the requirements once and forget about it in the fond hope the things always be
done perfectly. They have to consistently look for improvements.
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Right Goals- It is essential for every organization to set the right objectives towards which the
organization should be moving. As part of the TQM journey, an organization has to arrive a vision,
mission and the goals. The goals of each employee/ team /section in the organization should be set
to match with the goals of the organization. It is important that right goals are set and communicated
to the employees in the most appropriate time.
Right Personnel- the whole process of recruitment starting from advertisement, conducting
interviews, should aim at selecting the right personnel for the right job.. If a person not suitable for
job in hand, then definitely it is going to be counter productive. One bad employee will spoil the rest.
Establish Right Process- Organization should establish right process, which is very essential. If the
right process is not selected, how can we expect the right products? Therefore, the company has to
necessarily invest time, money and right team of employees for identifying, establishing and
commissioning the right process. Within the organization, the supervisors should train the new
employees in the process. It is essential that the management establish the proper guidelines and
train the employees to perform accordingly.
Choose Durable Raw Materials- Materials can be converted into products only through the right
process. Therefore, without the proper raw materials, expecting quality would be farce. Therefore,
right materials should be selected from the right vendors. It should be ensured that the vendors
supply good quality raw materials which doesn’t call for inspection.
Choose Right Machinery- The process consists of people, machinery, people and methods.
Therefore, machinery should be selected properly so that the production can start from day one.
There are many important considerations in selecting the right machinery including formulating
specification, calling for competitive bids, arriving at criteria for objective assessment of bids, A right
method should be adopted and implemented for effective management.
4.Continous Preventive Action
A. Corrective Action is a Postmortem- What is corrective action? When a product or service is
delivered., if the customer find defects or faces problem. Then the deficiencies and corrected by the
organization. It would only be a postmortem of the process.. It does not satisfy the customer, in fact
the customer is frustrated. However, a corrective action is better than no action at all when a defect
is found. Corrective actions were identified and acted upon in a systematic manner only after ISO
9001 standard were set. When there is absolutely no concern for quality in an organization, corrective
action should be the first logical step to improve quality.
B. Prevention is Better than Cure- there are two ways of handling a problem, one is to cure and
the other is to prevent it. All of as give full jurisdiction as to why a problem could not be prevented
early enough. Not preventing a problem is a reactive approach. However, a manager cannot be
reactive, if he wants to practice TQM, he has to be proactive, should carry out all his task as per
standards and foresee any problem in the organization.
C. One Shot Prevention is not Good Enough- Like other TQM principles and practices preventive
action have to be continuous and cut across all sections in the organization. No organization can
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afford to stop after taking one or two preventive action. If they do so the quality of the products may
decline, and no amount of corrective action will help. The organization will earn a bad reputation.
Therefore, preventive actions should be taken at periodic interval.
5. Care for Little Things is Not Good Enough
TQM is a continuous process improvement program and aims at one step at a time. Therefore, the
management should aim at scaling greater heights through small and continuous improvement in
every process.
A. Caring for Small Things
While efforts will be made to maintain sophisticated and expensive machinery and
equipment, the same care may not be taken of small things such as accessories, jigs, and
tools. Every tools should be maintained properly at periodic interval and handled properly.
B. Communicate with Junior Employees. No doubt over all economic performance,
strategies, quality, council meeting, visits of customers are all important, but at the same
time but the junior most employees are also equally important in an organization. Hence, the
senior management should establish a channel of communication with the junior employees
in the organization.
6.Ensure Economic Performance
A. Importance of Economic Performance. While marching on the TQM, the CEO should not
lose tract of economic performance of the organization. All TQM activities should lead to
better economic performance in the long run. If an organization is implementing TQM
correctly, then the bottom line will be improved automatically. Inspite of other goals like
satisfying wants aspirations, serving society, providing employment, etc, the primary
purpose of a business is to earn profits.
B. Quality should Increase Productivity. The objective of continuous improvement is to
satisfy the customers. Improving quality for customers satisfaction should definitely lead to
increase in overall productivity. This is not only satisfying external customers, but also the
internal customers. Satisfied internal customers all over the organization will deliver more,
thus improving productivity.
The establishment of quality system leading to ISO 9000 certification, following TQM
principles establishing strategies for TQM implementation, all should reduce defects, reduce
rework, and associated hassles, improved operation thereby improving and increasing
productivity and profitability.
C. Talk About Success in Economic Performance. There is no harm in manager’s taking
about their achievements and feeling prod of it. It will help him to motivate the employee and
customers alike. There if no end for improvement in economic performance. Year after year
the organization will face different problems not only from the customers but also from the
employees, shareholders, society and the suppliers. If the management is not careful, the
expenditure will increase without any corresponding increase in the organization’s economic
output.
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D. Quality Policy. The quality policy should clearly convey the view of the management on the
dealing with the customer satisfaction. The quality policy is aimed at improving the
customer’s perception about the organization and thereby improving the organization’s
image. It should also be like a guide for each section of the organization for developing their
own quality objectives.
It should be ensured that there is a link between the vision, mission and policy. They should
not contradict each other, rather they should aid each other.
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Chapter 4
Total Quality Management and Implementation
The top management always leads the implementation of TQM. TQM is based on selfcontrol, which should be embedded in each employee, team, division, etc. Planning problem solving
and decision making to the lower levels of the organization allows employees to both measure and
take corrective action in order to deliver a product or service that exceeds customer expectations.
The framework for TQM implementation should facilitate this and involve every employee. Most
organizations establish quality council or a steering committee for systematic transfer of
responsibility for improvement to every employee in the organization. This committee is assisted by
a separate cell established for coordination of implementing TQM with a TQM facilitator.
Total Quality Implementation
Is
A central change
Responsibility of top management
A systematic way to improve processes
Structured approach to solve problem
Protective organization
Perceive by everyone
Practiced by everyone
Team involved
Not
An overnight cure
QA manager is responsible
A new program
Fire fighting
Reactive
Slogans speaks
A specialize discipline
Only one person of the department involves
TQM Tools and Techniques
TQM involves application of the right tools in the organization for the continuous improvement of
quality. Therefore, each organization may require a different mix of tools and techniques depending
on the business, quality of employees, culture and the customer profile.
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Table 1.TQM Tools and Techniques
Type
Tools & Techniques
Methodologies
System
Human Resources
management
SPC, JIT, Taguchi methods-DOE, QFT, TPM
ISO 9000
Total Employee Involvement (TPE),
Motivation
Proactive
and Quality circles
Quality improvement awards such as Malcolm Baldridge,
Deming Award, European Quality Award, Rajiv Gandhi
National Quality Award, etc.
Table 2. Contribution of Gurus of TQM
Areas of TQM
Statistical
Management
Execution
Gurus
Gauss, Pareto, Shewhart, Fisher
Juran, Crossby, Feigenbaum
Deming, Taguchi
PDSA TQM Implementation
Shewhart developed Plan, DO, Check, Act (PDCA) cycle for improvement of processes. Deming
modified it as PDSA cycle. There are four Phases-Plan, DO, Study and Act shown in Fig. 4.1 as
follows:
The important actions taken during each phase of PDSA are given below:
Plan
•
•
•
Establish objectives
Establish a plan that will facilitate achieving the goal
Establish a measurement system
•
•
Plan for implementation and measurements
Implementation the plan on plot basis
Do
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Study
•
•
•
Compare the result with the objectives
Identify gaps
Analyze the cause for gaps and exceptional results, if any
•
•
Standardize the procedure that met or exceeded the goal
If there were gaps, improve the plan and carry out PDS again
In the following paragraphs, an overview of TQP implementation using the PDSA cycle is
given.
Act
Planning Phase of TQM
Before the planning phase, it is assumed that the organization after analyzing the pros and cons has
decided to implement TQM. The CEO is prepared to commit the resources and his time. Therefore,
there should not be any looking back or reconsideration whether TQM or not at this stage. The
prerequisite for the planning phase is that the organization has set its goal to achieve TQM for longterm success.
Announcement The CEO will be able to convince to workers and the junior employees about
practicing TQM quite easily as they tend to have an open mind. But he may have problems in
convincing the first line manager and senior managers. According to Harrington, “They (first-line and
middle managers) admit that participative management is good for the employee and good for the
organization, but they don’t view it as being beneficial to themselves. In fact, they see it as a threat,
taking away some of their authority.
Select Consultant Consultant having advantage of being independent, will be able to put forth the
new ideas to change the organizational culture. If a consultant moots an idea, it could be easily find
the acceptance amongst the employees, unlike an idea given by an employee in the organization
(even if the idea of the employee is much better than of the consultant!). Therefore, a component
consultant can be hired for help in implementation of TQM.
Corporate Strategic Planning The next step would be planning the strategy as to how the
organization is going to get into TQM. So it has to carry out the strategic planning with the help of
the senior management and consultant. The important activities in strategic planning are formulating
vision, mission and objectives for the organization by the CEO.
Vision Statement Vision statement is the vision of the CEO about where the organization should
be in the long run. It may not have any relation to the current status with regard to the products or
services of the organization, but what the organization should be capable of in the future. It is an
achievable dream of the top management.
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Quality Policy The quality policy should clearly convey the view of the management on dealing
with the customers and achieving customer satisfaction. The quality policy is aimed at improving the
customer’s perceptions about the organization and thereby improving the organization’s image. It
should also be like a guide for each section of the organization for developing their own quality
objectives.
It should be ensured that there is a link between the vision, mission and policy. They should
not contradict each other; rather they should aid each other.
As soon as the vision statements are finalized, it does not mean that each employee will
understand, even if it is signed by the Chief Executive and advised to read it. Quite often, the
employees may not have the time to read the statements! Therefore, the management should
try to coach the employees on the need for understanding and achieving the vision of the CEO.
Plan for establishing communications framework
As part of the strategic planning, the organization should plan for a corporate-wide framework
for communications. A typical framework for communication is given in the figure below:
Vision Statement
Mission Statement
Quality Policy
Quality Manual
Quality Plan
General
Procedures
Newsletters
Detailed
Procedures
Circular
Notes
Work
Instructions
Training
Program
Story
Teller
Corporate-wide Communications Framework
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The communication framework starts form the vision, mission and policy statements as finalized by
the CEO. The important document for communication within the organization is the quality manual.
If the organization is already certified under ISO 9000 standards, then the same quality manual can
be used. Below the quality manual, the next tier of document is quality plan. Which quality manual
says what is to be done; quality plan says how it is to be done. Based on the quality manual and
quality plan, the process document are to be prepared. The process document may consists the
following
1. General procedures, which cut across the entire organization, involving one or more
processes.
2. The documents specific to particular process such as detailed procedures and work
instructions.
However, these documents are not sufficient for communications within the organization. In additions
to this, the organization should plan for periodic newsletter highlighting the important
developments/achievements.
CEO
Steering QC
Division 1
Division 1 QC
---------------------------------Division 2
Division 2 QC
CEO- Chairman
Directors
TQM Facilitators – Secretary
------------
GM- Chairman
Manager
TQM Facilitator – Secretary
Quality council in a large organization
Selection of TQM Facilitator TQM facilitator should be an independent person and he should not
be made responsible for normal production. Only then he will be able to carry out the difficult task
successfully. The TQM facilitators should be a coach and not a player. He should encourage ideas
in group meetings, avoid expressing his own ideas and be careful. He should take on the
responsibilities for coordinating TQM implementation across the organization. This is not a one-time
job, but a continues one which tests limits of the energy.
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Rule of Quality Council (QC) The roles and responsibilities of each member of QC in TQM are
given below:
• They should have personal commitment to quality and TQM. The member of the quality
council should be convinced that continuous improvement is possible in the organization.
• They should constitute the right teams, which can be called as Process Improvement Teams
(PIT) for solving each problem. Since the abbreviation does not sound good, we will call
them Process Action Teams (PAT).
• They should attend QC meetings after adequate preparation.
• They should keep track of the steps taken by the teams toward improvement on a regular
basis.
• They may discuss with the customers and suppliers to get first-hand information about what
is happening in the organization. Hence, it would be better to adopt Tom Peter’s MBWA to
know the facts.
• They should facilitate training of the employees as well as the improvement of the team
members.
• They should be champions for quality in the organization and should be willing to sponsor
quality related initiatives.
• They should always be on the lookout for related information and provide resources
continuously for quality improvement.
• Last, but not the least, they should walk the talk, i.e. they should lead by example.
3
8
Strategic Quality Plan MBNQA advocates that the strategic business plan and quality plan should
be integrated. The strategic business plan involves the proposed market share, goals, business
value, profits, diversification to new areas of business, investment thereof, etc. The strategic quality
planning is the stimulation to achieve TQM in the organization.
Some strategies for QTM implemented are:
• Training for top management-members of quality council, senior management – executives’
employees.
• Forming improvement teams for specific problems.
• The consultant can train the quality council members. The TQM facilitators can also undergo
the training along with the quality council members. Thereafter, the TQM facilitators should
take the lead and conduct raining for as many employees as possible on TQM principles
and how to go about TQM.
Employee Involvement Every improvement action has to be carefully considered and approved by
the QC. However, employees should be encouraged to give suggestions for improvement. The ideas
will discuss in the QC meeting and it will decide whether a suggestion has to consider or not.
Improvement plans require a lot of detailed and intelligent work to be carried out. For carrying out
such tasks, cross-functional teams, PATs will be formed by the QC. Each team should be assigned
clear responsibilities and in particular specific deliverables by the teams be defined. They have to
provide the resources for accomplishing the tasks.
Constitution of PAT The formal structure for TQM consists of the QC, the TQM facilitators and the
support staff. Improvement teams are found for each improvement task. Therefore, the management
Public Personnel Administration | 39
should plan for constituting PATs, empowering them and supporting them. The improvement teams
will be formed for solving a given problem on part-time basis and will dissolved as soon as the job
has been completed.
Identify Process The QC should plan to identify processes for improvement. Business process
benchmarking helps in identification of the potentials processes for improvement. The potentials
processes are those, which yield higher return on investment.
Apply PDSA for Improvement
We have come across two types of planning activities. The higher level of planning involves
formulating policies, selection of a consultant, selection of TQM facilitators, constitution of QC,
formulating plans and procedures for various activities and training of personnel in the
organization. This can be called overall planning or corporate-wide strategic planning before
entering into TQM.
Do phase of TQM
After successful planning, the Do phase starts. The first task in the Do phase is the meeting of the
QC. In the first meeting, the various plans as given above should be authorized by the Q
Study Phase of TQM
In every meeting of the QC the results achieved through the implementation of TQM should be
studied. Wherever plans are to be changed, they should be discussed and decisions taken.
Act Phase of TQM
In the Act phase, the plans for implementing TQM should be confident. This PDSA cycle should be
repeated continuously.
Selected Process For Improvement
As the first step, TQM needs the establishment of a documented system foe quality in the
organization. This could be the system established for the purpose of meeting ISO 9000 standards.
Nevertheless, once the initial established, documented and implemented, then it will be easier for
making progress. In other words, improvement can be made only after a system is established.
The improvement actions are aimed at achieving one or more of the following goals:
• Attaining technical excellence
• Improving quality
• Reducing defects
• Increasing productivity
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•
•
•
•
Reducing quality cost
Improving uptime of equipment
Reducing overhead costs
Reducing delivery time
The triggers for improvement may come from many sources. Some of the known sources are
internal quality auditing, management review, MBWA, employee feedback, customer feedback,
supplier feedback, in-process data and field failure data. Based on the triggers and other data
collected from formal and informal channels, the QC identifies the process for improvement.
Getting things Done
TQM has to be implemented by the employees. In every organization management has the
responsibility to ensure that the employees do their duty. The following factors should be considered.
1. Recognition. Recognition of the contributors both employees and suppliers will lead an
accelerated implementation of TQM. Recognition is a must in order to motivate the
employees to bring out solutions to the problems in the organization. It may also be required
to distinguish between the performers and the non performers. The idea is to make the non
performers to perform still better.
2. Price and Punish. Four types of management techniques
a. Authoritative
b. Authoritative and benevolent
c. Consultative
d. Participative
While most organizations prefer to have authoritative type of management, such an
approach will not work in the TQM environment. The ideal would be participative
environment. Therefore it is better to start the TQM journey with the second type of
management, the authoritative and benevolent. The management is benevolent, which
means it tries to fulfill the aspiration of the employees, at the same time, the management
also demands that the employees should do their best for the organization.
3. 80 Percent of Success will be due to Personal Contact. The improvement team alone can
not cause improvement. The empowered team also may not cause improvement by
themselves. It is the support of the QC and the CEO, which would help the process owners
to overcome the resistance to change. In other words, the management should stand and
personal contact behind the people at times of improvement and at times of stress. The
management should be willing to take responsibility for the failure, while allowing the
employees to take up the credit for success.
4. Accumulate Small Gains. Continual improvement means incremental improvement. One
improvement at a time can lead to a big success over time.. But such small improvements
should follow each other, and the management should accumulate these improvement.
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5. Build Credibility- Inside and Outside. TQM will help the organizations improved their
reputation and credibility not only within the organization but among its customers. This
should be harnessed by adopting appropriate strategies. One of the strategies should be to
talk about success on account of TQM within the organization and the public.
6. Persist. The QC and the CEO they should take decision based on analysis. They should
way the pros and cons before taking any decision. If the employees are motivated to adopt
to a new methods, they will get used to it. At the transition stage, the employees may be
tempted to go back to the old method, finding fault in the new methods of the improved
process. However, they should be given confidence, supervised and motivated till they follow
the improved process and understand that the improvement is for their betterment.
Barriers to TQM Implementation
• Lack of Management commitment
• Lack of employee involvement
Teaching Activities and Learning Activities
Direction: Write T if the state if true and write F if the statement is false in the provided space
before the item. 15 Pts.
____1.Total quality management infuse a constant innovation, improvement of processes to satisfy
customer’s need.
____2.The philosophy of TQM is to increase waste and delay of product delivery.
____3.The PDSA stands for Plan, Do, Study and Act.
____4.In TQM employee should be encourage to suggest, ask questions, existing processes etc.
____5.Demming’s concepts in TQM adopt themselves as a manager.
____6. An Organization can not progress without change.
____7.Proactive management needs a proper system in the organization for total quality
management.
____8.Quality can be improved only through preventive action.
____9.DIRFT is a concept tested for quality management
____10.The problem of not doing it right will increase the failure cost.
____11.Change is not essential for quality management.
____12.Removing barriers does not affect total quality management.
____13.Just in time manufacturing is not possible for zero defects
____14.Total quality management is responsible for selecting people, forming teams, providing
resources and establishing the system in the organization.
____15.Employees should be encourage to pursue high level of education and training skills for
quality management.
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Flexible Teaching Learning Modality
Online:
Zoom and Edmodo
Remote:
Module, Exercises, Individual activity, Report/ Term Paper
Assessment Task/s
Do you think TQM will improve delivery of service /products to customers? Yes/No. Why. Explain
your answer.
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Chapter 5
Customer Satisfaction on Services
Customer Satisfaction
Customers are the greatest need of any organization. Every organization needs to carry out PDCA
so that the customers are satisfied.
•
•
•
•
•
•
Plan for satisfying customers
Implement the identified measures
Check whether they are really satisfied
If not take corrective action
If so take preventive action
Revisit the plan
Service quality is quite important for customers satisfaction it is applicable for every organization.
The following factors should be considered for customers satisfaction.
• Service quality
• Customer Delight
• Kano Model
• Agreed Customer Requirements
• Customer Perceived Quality
• Customer Feedback and complaints Resolution
Service Quality
As per international Standard, ISO 9000
Service- The result generated, by activities at the interface between the organization and the
customer and by the organization’s internal activities, to meet customer needs.
-
The result generated in the case of manufacturing is a product.
Importance of Service
There are numerous service providers, such as schools, colleges, internet café, hospitals, hotels,
banks, government departments, transport organization, telecommunication service, security
services etc. Therefore, the quality of services is important to all organization which is crucial for
customer satisfaction.
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Features of Services
There are a number of unique services, which characterize a service sector.
Speed
The requirements are always made known to the service providers only at the last moment. Hence,
it becomes imperative for the service providers to offer service as fast as possible without
compromising quality. Therefore, , designs which enable speed and delivery with appropriate staffing
are critical requirements for success in the service industry.
Delivery Schedule
Generally, the service is directly delivered to the customer. Every delivery is associated with delivery
schedule. If someone has to catch a flight and he calls for a taxi at 6:00 pm, the taxi should reach
him before 6:00 pm. If not the customer is put to inconvenience. Many projects fail due to the failure
to keep up to a time schedule or due to delayed service.
Care in Handling
The deliverables have to be handled carefully. If the deliverables are not handled carefully, they may
break or perish. Therefore, it calls for extreme care in handling of both deliverables as well as the
customers.
Customer Requirements are Difficult to Comprehend
Since each service offering is different, service provider has to make efforts to understand the
requirements of each customer correctly. One has to communicate effectively with the customer to
know his to know his true requirements. Therefore, it requires a lot of tact and intelligence
To understand the requirments
Difficulty in Estimating cost
Since, each service offering is different, every time the service industry has to estimate the changes
payable by the customer for the service offered. Service charges essentially comprise of the cost of
materials. Furthermore, the organization has to prove to every customer that it is consistent. Hence,
every organization should have a system for arriving at the changes for each offering, system should
be simple and unambiguous.
Difficulty un Measuring Performance of Service
A product is manufactured as per documented specifications formulated by the organization. A
service which may be delivered as per documented specifications. In manufacturing, the
specification must be formulated unambiguously, clearly and without subjective element. Hence, it
become important to carry out measurement of quality of service delivered through customer
feedback.
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Difficulty in marketing Services
Even in the process of marketing, there is wide difference between service and manufacturing. If a
product is manufactured and if publicity is given, then there will be good demand provided the quality
of product is good. Any amount of advertising will not reach its customers. Therefore the service
industry has to do two things for marketing of services.
1. Personal contact with potential buyers
2. Building credibility of the organization by good services consistently
Difficulty in Measuring Customer Satisfaction
In the manufacturing sector, the product has to be designed with quality, reliability with good
aesthetics and the manufacturer should have a good after sales service to attract the customer. If
these are met, then it will be rather easier for an organization to sell and the customers will definitely
be satisfied.
Psychology of Customers
The most important requirement for success in any industry is to understand the psychology of the
customers. The organization may think of saying “ no” to such customers. But the customer may stop
10 other customers who are willing to avail the services. Therefore the organization can not say no
to such customers. It is better to lose customer by telling the truth rather than getting customer by
giving false promises. This should be understood to reduce a problems in a service organization.
The time schedule would have been adhere to, but then after the service contract has been received,
some problems would have been noticed., which will postpone the delivery schedule. There are two
ways of handling this unforeseen situation. One way is to keep calm and when the customer comes,
tell him the reasons for the delay and what reasons. If this is done, the customer will definitely
understand and may be willing t give some more time to complete the job.
Customer Delight
Business Thrives on Customers
Customers are the very reason for being a business. Profit can be reaped only if an organization has
customers who will pay for the products or services on continuing basis. It depends on the ability of
the entrepreneur to get into the right areas business for success. Therefore, any organization should
identify the customers and orient their business towards satisfying the customers. Customer
orientation means, running success with the sole motive of serving more and more customers and
satisfying them.
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Customer Attrition
Some organizations may be able to attract new customers, but existing customer may leave. It is
relevant to recall an old saying in this context.
“ If product is good then customers will come back (again)
If not, the product will come back ( returned)
According to Tom Peters, the customers leave because of the following reasons
15 percent because of quality problems
15 percent because of higher price
70 percent did not enjoy business with the organization
50 Percent of Problems are Due to Misunderstood Requirements
One of the major problems in a service industry is identifying the real requirements of the customers.
In many computer software development projects, 50 percent of the defects are caused due to
misunderstanding of requirements.
Contractual and Non Contractual
Customer satisfaction has to be analyzed, with regard to both contractual and non contractual
requirements of the customers as well as non contractual operation of the customers. The contractual
requirements are most of the times documented in the form of “Requirement Statement” jointly
agreed to and signed between the customer and the organization. Whenever a service contract is
finalized the customer requirement have to be understood, documented and agreed to by both
parties.
The contractual requirements could include the following parameters:
• Quality: service product characteristic
• Time schedule delivery
• Price
• Services such as responsibility for installation, service during warranty and
post warranty
• Documentation support
• Training support
The non contractual include the following parameters:
• Quality ( non documented before)
• Implied requirements
• Value for the money spend
• Environment of conducting business and the friendliness of the customer
service personnel of the organization
Delighting Customers
If the organization just tries to satisfy only the requirements, then it is unlikely to delight the customer
and retain them forever. The organization should be familiar with general human nature and try to
understand the hidden requirements of their customers.. It may be helpful to carry out a market
survey and find out the additional small things that are delivered by competitors. Therefore, it is better
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to educate the customers regarding the facilities that can be added to the requirements free of cost
and what incur at additional cost. The organization can give pleasant surprises to the customers by
giving additional features or items for resulting in customer delight.
Customer Contact Personnel
The customer orientation dictates the customer contact personnel should be specifically chosen.
There should always be a separate set of people to talk to and accept orders from the customers.
They could be different from the actual producers since manufacturing and customer service are two
distinct chore requiring different caliber. Manufacturing requires appropriate tools, machinery,
materials and skill to manufacture. It is therefore essential that the customer contact employees are
separate and they are trained in customers handling.
According to D.H. Stamatis “COMFORT” stands for the following customer service attributes:
C for Caring
Customer service employees should not only be, but perceived to be very interested in finding out
the real needs of the customers and help them to buy what they really intend to buy, product or
service. They should also be ready to answer both the relevant and irrelevant queries and go out of
the way to help the customers in solving their problems.
O for Observant
Each customer service personnel should be a good observer. The customer contact person should
pay attention to the body language of the customers and should also be able to read their
requirements. A good customer service person will take note while the customer is talking. If queries
are properly answered the customer will feel that the customer service person is really
knowledgeable in the field.
M for Mindful
The organization has to strive to meet customers needs. The customer contact employee should be
sensitive to the urgency and the expectation of the customers. They should give importance to the
requirements of the customers even if the request was very late. At all such time, the customer
contact personnel should remind themselves that they re on the job because of the customers and
not vice versa. Therefore, they should treat the customer with due respect and give them the feeling
that they are always right.
F for Friendly
The customer service employee have to be friendly with customers. They should give as much
information as possible to the customers and greet them with smile. All these small things will
improve the relationship with the customers and retaining the customers for their lifetime.
O for obliging
The organization should feel obliged that the customer has visited them with an enquiry it may
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so happen that the customer may not be serious about giving a business. The customers contact
employees should answer the customer queries even in such cases, as it may add to the marketing
efforts of the organization.
R for Responsible
The organization should feel how much time responsible for successfully accomplishing the proposal
if accepted by customer. It is better to subject the proposals for contact review before sending.. The
contact review should not be an obstacle for innovative ideas and should not cause delay.
T for Tactful
The customer is supreme, but this does not mean that they can not be wrong. The organization
should tactfully handle such situation. In a service organization, generally the customers would
demand that the job should be completed in very short time. In such situations, customer contact
employees should explain in detail how much time is really required for providing the service.
The KANO Model
According to Dr. Nariaki Kano ( 1985) of Tokyo Rika University came out with an interesting and
practical model for understanding customer satisfaction, Known as the Kano Model. He developed
the model from Herzberg’s Motivator- Hygiene theory.
Performance
Bad
Good
Customer
Satisfaction
Bad
Good
One Dimensional Model for Quality
When we measure the performance of a product, we rate them as good or bad. Similarly when we
rate the satisfaction of customer, we rate them as good or bad. This is a one dimensional quality
model.
The Kano’s Model there are two Axes
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Satisfaction
X
Performance
Y
Two Dimensional Quality Model
The X axis represents the performance of the product or service or degree of implementing the
product function. On the X axis the extreme left point indicates that the product function is absent.
On the extreme right point, the product function is fully implemented.
The Y axis represent the level of customer satisfaction, on the top most point, the customer is highly
satisfied, on the bottom most the customer satisfaction is quite low.
Basic Quality
The basic quality is also called threshold quality. If the function are not implemented as agreed ,
then it results in lower level of satisfaction as compare to lower level of satisfaction when fully
implemented. The reason for this quality type is that the customer expect that his requirements will
be implemented in any case. Customer will definitely complaint if the basic quality attributes are not
fulfilled. But they will not appreciate the supplier for fulfilling the basic quality features. Fulfilling the
basic quality is assured by the following:
•
•
•
•
•
•
Customer complaints
Warranty data
Product recalls
Number of lawsuits
Things gone wrong
Other failure reports
Performance Quality
Performance quality attributes generally cause linear response. Increase level of achievement cause
increase levels of satisfaction. The customer requirements quality can be found from the customer
survey.. customers freely express their desires, when they are ask for.. This is what we called voice
of customer. Within the same range of products, the customers will be satisfied more if a particular
product gives a better performance.
“ The rule is: better performance , the greater the satisfaction.”
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Excitement Quality
The third type is excitement quality. Excitement is generated because the customer received some
feature or attribute that they did not expect to. Customer generally did not attribute excitement
attributes in customer survey. Because they do not know that they want them.. In order to generate
excitement and brand loyalty, organization must leverage their creative resources to identify ideas
and innovations that cause customers excitement. Small improvement in providing excitement items
cause relatively large increases in satisfaction. Therefore, organization have to be continuously doing
research in finding what will excite the customers.
AGREED CUSTOMER REQUIREMENTS
Invest Time for Understanding Customers Requirements
Every organization should meet the requirements of its customers. However the requirements of the
customers are the most difficult to comprehend, especially in the service industry. Therefore,
organization should invest time for understanding each customer’s complete requirements.
Find Out the Right Requirements First
In the service industry, the problem is compounded because, it is very difficult to describe the end
products in clear terms. One of the reason of this phenomenon is that the service offering is more
easily describe through subjective parameters rather than the objective parameters. For example,
nobody will be able to describe objectively a recipe. Therefore, service industry poses much greater
challenges for the customers service personnel for understanding customers requirements.
Code of Good Customer Handling Practices
The past experience gained in implementing services should be accumulated, so that the mistakes
are not repeated again. There are two checkpoints in a service requirements finalization. The first
one is the initial discussion the customers contact person has with customer and the second one is
the contact review in the organization. At these two stages, whenever pitfalls or mistakes are found
by the organization should be identified and documented. A senior management person should
consolidate the past experiences from these observations and formulate a Code of Good Customer’s
Handling Practices. The documents should be thoroughly understood by the customers contact
employee.
CUSTOMER PERCEIVE QUALITY
Importance of Measuring Customer Satisfaction
Unless an organization evolves an specific methods of measuring customer’s satisfaction and
quantify the results, it may be difficult to say whether the customers are satisfied or not. It is also
very essential to measure customer’s satisfaction so as to stay ahead of competition. Therefore ,to
face and win and win the competition, every organization should continue to improve their products
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and services and attain higher levels of customer’s satisfaction. The continuous improvement of
customer satisfaction can only be confirm by objective measurement.
How to Overcome Difficulties in Measuring Customer Satisfaction
To compute indices for customer’s satisfaction. It requires innovative people, a determined
management and additional effort by the organization for this purpose. Therefore, the organization
should select a few vital parameters to measure and once the are determined, then data collection
should be instituted and at regular intervals the measures s should be computed as realistically as
possible. Therefore, organizations should aim at providing more value for the money spent, day by
day. If the organizations increase the price without improving its quality, then it will lead to failure of
the organization.
CASE STUDY I
Customer Satisfaction Survey of ETDC, Chennal
Electronic Test and Development Center (ETDC), /channel, India is engage in testing and calibration
of electronic products. As part of their TQM initiative, decided to measure customer satisfaction index
(CSI) in the year 1996. Four parameters were identified to measure customer satisfaction index.
1.
2.
3.
4.
Promptness of Service (P1)
Quality of Customer Service (P2)
Quality of Testing and Calibration (P3)
Quality of Test and Calibration Reports (P4)
The customers were requested to rank the quality of ETDC services against each one of the above
parameters in a scale of 1 to 5, five being excellent and one being poor.
Assume that ranking of 10 customers with report to promptness of service are :
Rank
5 -Excellent
4 -Very Satisfactory
3 -Satisfactory
2 -Fair
1 -Poor
Number of Respondents
7
1
1
1
0
Then: CSI for Promptness= 5 x 7 + 4 x 1 + 3 x1 +2 x 1
10
= 44/10 = 4.4
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This was repeated every year thereafter and the results obtained during the last three years
YEAR
2000-2001
2001-2002
2002-2003
TOTAL
Mean
PI
3.55
4.27
4.36
P2
3.76
4.11
4.2
P3
3.96
4.19
4.33
P4
3.83
4.04
4.3
CUSTOMER FEEDBACK AND COMPLAINTS RESOLUTION
Every organization should have a well define process and procedure for getting feedback and
receiving complaint from the customers.
Customer Feedback
Customer feedback is the most difficult to obtain. It is common to see that as soon as a service is
delivered. The customer will rush to carry out the other task elsewhere. If the customers do not give
feedback in time then the market will unexpectedly give an adverse feedback. Therefore, it is very
essential that service organization adopt the right strategies for obtaining customer feedback.
A. Feedback Form
The most common method of obtaining feedback is by giving a response sheet or a feedback
form to the customers at the conclusion of delivery process and seeking feedback. Feedback
form can be use for measuring CSI. If such form are lengthy and complicated, the customer
would not find time to complete the feedback form. Therefore, the customer feedback form
should be simplified to enable the customer to fill it up with the least difficulty.
Sample Quality Feedback Form
A.
B.
C.
D.
E.
F.
Overall impression about the quality of the product. ( Excellent/Good/Fair/Poor)
Whether the job was carried out as originally agreed. (Totally/Partially/Not at All)
Whether delivered on time, as scheduled. (Yes/Not)
Whether the job was delivered on the scheduled date without reminders? (Yes/ No )
Was the service provided by the customer contact personnel satisfactory?( Yes/No)
Were the other personnel in the organization prompt and friendly? (Yes/No)
Confidentiality
In order to get a true feedback, the feedback form should be kept confidential. Even where it is taken
orally, the confidentiality feedback should be assured so as to get realistic feedback. When a
customer is not satisfied with a service provider, he may not like to go a different provider immediately
unless a particular provider is quite bad. They may not like to annoy the people in the organization
with who they are dealing everyday.
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Display Results
The feed back data should be analyzed at regular interval. The data collected could be converted
into charts like pie charts. The display of feed back is beneficial into ways to the organization.
1. The customers come to know that their feedback is taken seriously by the organization
2. The employees in the organization know about where they really stand.
COMPLAINT RESOLUTION
While feedback from customers is to be dealt with in an independent manner, the resolution of
complaint is to be handled by senior management personnel. It is also a good idea to open a number
of channels for feedback and complaints, such as a suggestion box or nominating an authorized
person independent of production and customer contact to receive complaints or feedback. This is
essential for the following reasons:
1. To keep track of the complaints
2. To carry out root analysis and take corrective action
3. To take preventive action
4. To find out the cost of poor quality and other statistical purposes
Analyze Independently
The team should study the complaint and verify whether it is true. The team should approach the
complaint with an open mind and try to analyze whether such a mistake could have occurred in their
organization. It should recommend to the top management to take corrective action immediately
without waiting for the final findings of the team.
Give Benefit of Doubt to Customers
Quite often, there may be variations in the statement made by the employees of the organization
and the customers. Such a situation should be handled tactfully and the team should be able to find
out the truth. However in such cases, if there are doubts whether the cause of complaint is due to
the customer or due to the organization, the benefit of doubt should definitely go to the customer.
Satisfying Annoying Customers
If the organization is serving thousands of customers, there could be one or two who will be creating
problem for the organization unnecessarily. If the organization puts all efforts to curb it., then it will
be wasting in time. Therefore, it may diplomatically handle the annoying customers and send them
back as early as possible.
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Customer Recovery Process
Each organization has to establish a process of receiving complaints, processing them,
communicating to customers and resolving the issue. This is called a complaints recovery process.
This process is aimed at satisfying customers, resolving problems and take corrective actions. The
problems of customers have to be recorded. They have to be resolve without delay to infuse
confidence in the customers. Every complaints is important and the CEO should know about them.
He should keep track of each complaint till it is resolve. The resolution should satisfy the customer
also the analysis of the complaint should bring out clearly the root cost of the problem. The root
cause should be corrected immediately.
References
Acey, J. Change Management, 2006
Hallriegel, Jackson and S.Socemm, Management, 2005
Hubert, Rampersad, Total Quality Management. An essential Guide to Continuous Improvement. 2004
Keller, Paul, Pyrdek, Thomas. The Handbook For Quality Management. A Complete Guide to Operational
Excelent.2015
Stephens S. Kenneth. Juran Quality and Century of Improvement. Vol.15. 2004.
Sallis Edward. Total Quality Management in Education. Third Edition. 2005.
Stonner et.al.2004 Management
Internet
Journals
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