Survey: Why Customers leave
a business
Poor Service
 Product Dissatisfaction
 Better Prices Elsewhere
 Other Reasons

69%
 13%
 9%
 9%

Quality-Driven Organizations
 Total quality management (TQM):
Managing with a commitment to
continuous improvement and product
quality.
Who is Edward Deming
Dr. W. Edwards Deming is known as the father
of the Japanese post-war industrial revival
and was regarded by many as the leading
quality guru in the United States.
Trained as a statistician, his expertise
was used during World War II to
assist the United States in its effort to improve
the quality of war materials.
But then he was invited to Japan at the
end of World War II by Japanese
industrial leaders and engineers.
They asked Dr. Deming how long it would
take to shift the perception of the world
from the existing paradigm that Japan
produced cheap, shoddy imitations to
one of producing innovative quality
products.
Dr. Deming told the group that if they
would follow his directions, they could
achieve the desired outcome in five
years. Few of the leaders believed him.
But they were ashamed to say so and
would be embarrassed if they failed to
follow his suggestions.
As Dr. Deming told it, "They
surprised me and did it in four
years."
Deming’s 14 Principles of TQM
1.
Constancy of purpose

2.
New philosophy

3.
Continual improvement, not short-term goals of
profitability.
Don’t settle for “status quo”
Don’t depend on mass inspection

Do it right the first time
4.
End lowest tender contracts
5.
Improve every process

Search continually for problems.
6.
Use on-the-job training
7.
Institute leadership

The responsibility of managers must be changed
from sheer numbers to quality.
8.
Drive out fear

9.
Break down barriers

10.
No more “smokestacks”
Eliminate demand slogans

11.
Two way communication
Unreasonable demands only create adversarial
relationships.
Eliminate arbitrary numerical targets

Instead look for continual improvement of quality
and productivity.
12.
Permit pride of workmanship

13.
Encourage education

14.
Get rid of annual performance ratings of staff
that is based purely on numbers.
We don’t need just good people; we need
people that are improving.
Top management commitment and action

No hypocrites.
TQM Example: Flexible
Manufacturing
North American vehicle manufacturers have
been pursuing and promoting the ability to
produce a variable mix of models with the
same body shop and assembly line, for
example switching between a sedan and
an SUV on the fly.
Vehicle manufacturers want to avoid
repeating Chrysler's situation when they
could not produce enough PT Cruisers
in Mexico to meet demand, despite
having another plant in Illinois that was
building the Neon on which the PT
Cruiser was based.
Instead, vehicle manufacturers want to
emulate Toyota, which can produce
multiple models and styles from the
same plant, or move models to different
plants around the world with its Global
Body Line (GBL) manufacturing system.