Managing improvement – the
TQM approach
Chapter -20
Summary
TQM ?
The origin of TQM.
The difference between traditional quality
management and TQM.
ISO9000
Quality awards
TQM
The total quality management is related to
managing operations improvement. Quality
Management focuses on the ability to
produce and deliver the products and services
that the market requires, both in the short
and the long term.
TQM Defined
TQM is a holistic ( considering all, complete)
quality management approach, that emphasis
the role of all parts of an organization and all
people within an organization to influence and
improve quality.
So, TQM means a quality management
approach, where whole organization and
people are involved.
The origin of TQM
• The notion of TQM was first developed by
Feigenbaum and popularises by W Edwards Deming
who implemented many TQM programmes in
Japan, where his ideas, initially at least, were more
readily accepted. In essence, Deming, Juran, Crosby
and all the other gurus, said that total quality
management involves everyone taking a positive
and proactive approach to quality and that good
quality, i.e. consistent conformance to customers’
expectations, can only be achieved if:
The organisation understands what customer needs are and could define and
specify all of them.
All employees understand that all parts of an organisation have a role to play in
meeting customer expectations, not just the people on the shop floor, but the
work of finance staff for example in ensuring error free invoices for example.
Each employee recognises that they have an impact on quality.
All the costs of quality are considered, not just the cost of putting things right
when they go wrong, but also the costs of trying to prevent problems, with an
emphasis on the latter in order to bring about a reduction in the former.
There is a focus on getting things ‘right first time’ and instead of putting it right
when it goes wrong to try to make sure it does not go wrong in the first place.
There are robust and organisation-wide quality systems and procedures that
both ensure the things above happen, but also the removal of systems and
procedures that can make quality difficult to deliver (see Deliberate Defectives
box).
The organisation is concerned with continually improving what it does and how
it does it
Traditional quality approach VS TQM
First quality was regarded as an ‘inspection’ procedure
which is known as traditional quality approach.
(avoiding errors before it is seen by customers)
But, Quality Control went further by inspecting errors (
checking ) and dealing quality problems. Quality
Assurance again, moved further by including the
responsibility for quality in functions or operations.
Finally TQM considers quality as a holistic approach
concerning everyone. So, TQM can be regarded as a
philosophy of how to approach the organization of
quality improvement. TQM is based on the following
principles:
1. Meeting the needs and the
expectations of customers
2. Covering all parts of the organization.
3. Including every person in the organization.
4. Examining all costs which are related to quality,
especially failure costs.
5. Getting things ‘right first time’
6. Developing the systems and procedures which
support quality and improvement
7. Developing continuous process of improvement.
Total quality management can be viewed as a natural extension of
earlier approaches to quality management
•Quality is strategic
•Teamwork
•Staff empowerment
•Involves customers and suppliers
Makes quality central
and strategic in the
organization
•Quality systems
•Quality costing
•Problem solving
•Quality planning
Broadens the organizational
responsibility for quality
Solves the root cause
of quality problems
Prevents ‘out of specification’
products and services
reaching market
•Statistics
•Process analysis
•Quality standards
•Error detection
•Rectification
Inspection
Quality
control
Quality
assurance
Total Quality
Management
1. TQM regards the needs and
expectations of the customer
In TQM meeting customer expectations means seeing things from a
customer’s point of view. Customers are seen not as external, but
as the most important part of the organization.
2. TQM covers all parts of an organization
Every single part of organization, each department, each activity, each
person and each level should work together. The main concept of
TQM is ‘internal customer’ & ‘internal supplier’ idea. According to
this theory there is customer and supplier within the organization.
For example one department produces the design for another
department and delivers. Here design unit is the supplier for the
production unit.
So any error in the organization process will affect the external
customers. So, to avoid this the best idea is to adopt the policy
that every part of the organization contributes to external
customers satisfaction, by satisfying own customers.
The internal customer–supplier concept involves understanding
the relationship between processes
Process 3
External
supplier
Process 1
Process 2
Process 6
Process 5
Process 4
Between each process, the requirements of
the ‘customer’ process must be understood
and met by the 'supplier’ process
External
customer
Service – Level – agreements (SLA)
The formal level of service that should be
provided by one process to the other.
This agreement covers:
Response time
The range of services
Dependability of service supply
3. Every person in the organization
contributes to quality
This idea explains that each and every staff
member has on quality, and everyone’s
responsibility is to get right quality. Some staff
can affect quality directly – example the staff
who make the products, and those who serve
the same face – to – face to customers.
So everyone can reduce or impair(damage)
quality and everyone can improve quality.
4. All costs of quality are considered
The cost for controlling quality isn’t small. So, it
is necessary to analyze all the costs and
benefits associated with quality. The quality
costs are categorized as follows:
1. Prevention costs
2. Appraisal costs
3. Internal failure costs
4. Eternal failure costs
Prevention costs
Costs incurred while trying to prevent problems,
mistakes, failures and errors.
Indentifying potential problems and putting the
process right before poor quality occurs.
Designing and improving the design of products and
services and processes to reduce quality
problems.
Training and development of personnel in the best
way to perform their jobs
Process control
Appraisal costs
The costs associated with controlling quality to check to
see whether problems or errors have occurred.
The setting up of statistical acceptance sampling plans
The time and effort required to inspect inputs, processes
and outputs.
Obtaining processing inspection and test data
Investigating quality problems and providing quality
reports
Conducting customer surveys and quality audits
Internal failure costs
Costs associated with failures.
The cost of scrapped parts and material
Reworked parts and materials
The lost production time as a result of coping
with errors
Lack of concentration due to time spent
troubleshooting rather than improvement
External failure costs
Costs associated with error going out of the
operation to a customer.
Loss of customer goodwill affecting future business.
Aggrieved customers who take up time.
Litigation
Guarantee and warranty costs
The cost to the company of providing excessive
capability
So, the sooner we find the error, the
cheaper the cost will be.
TQM QUALITY COST & TRADITIONAL QUALITY
MANAGEMENT
In traditional quality management, failure cost is
reduced is money is spent on appraisal and
prevention.
Or
The more we spent on quality control, checking
the cost high, but the cost of failure is lower,
because less mistakes happens.
But TQM approach rejects the quality level or point
system idea. TQM is more about balancing different
quality costs (prevention costs, appraisal costs, internal
failure costs, external failure costs)
So, TQM argues to stop errors in the first place.
Because no errors in the beginning means
internal and external failure cots are reduced.
So, in TQM importance is to prevention
system.
Here, the idea is to get the things right firs time.
Or instead of waiting for something to happen,
do something before anything happens.
Costs
The traditional cost of quality model
Optimum amount
of quality effort
Amount of quality effort
Cost of errors = costs of
prevention and appraisal
Total cost of quality
Cost of quality provision = costs
of internal and external failure
6.Quality systems & procedures
Quality systems means organizational structures,
responsibilities, procedures, processes and
resources for implementing quality management.
So quality systems in a document has three level:
Company quality manual – summary of quality
management programme.
Procedure Manual – structure, design,
responsibilities.
Work instructions, specifications and detailed
methods for performance activities.
Total Quality Management
Includes all parts of the organization
Includes all staff of the organization
Source: Corbis/Richard T Nowitz
Includes consideration of all costs
Includes every opportunity to get things right
Includes all the systems that affect quality
Never stops
The cost of rectifying errors increases more rapidly the longer they
remain uncorrected in the development and launch process
Cost of rectifying error
10000
1000
100
10
1
Concept
Design
Prototype
Pilot
Market use
production
Stage in development and launch process
Increasing the effort spent on preventing errors occurring
in the first place brings a more than equivalent reduction
in other cost categories
Total cost of quality
Costs of quality
Appraisal
Internal failure
Appraisal
Prevention
Time
The ISO 9000 Approach
It is a quality management system, where set of
worldwide standards are placed as requirements for
company’s quality management system. So, ISO 9000 is
a framework for quality assurance.
ISO registration requires a third party assessment of a
company’s quality standards and procedures and
making sure the system works well. The objective of
ISO 9000 was to give an ssurance to the purchaser that
the goods/services that they buy have been produced
by meeting quality requirements.
Advantages of ISO 9000
PAGE 662
Implementing improving programme
Not all improvement programmes are successful
in many companies.
There are two types of failures:
The programme is not introduced and
implemented effectively.
After the introduction of the programme he
effectiveness got lost.
TQM implementation
• For successful implementation of quality
programme, the following factors are important:
• A quality strategy
• Top management support
• A steering group
• Group based improvement
• Recognize the success
• Training
The Six Sigma approach to organizing
improvement
Six Sigma approach is a improvement and quality
management approach developed by Motorola. It
is using process control, measuring, improving
and managing quality as a tool.
According to this specially trained people are
needed to improve processes. They are divided
into three categories:
Master black belt – experts
Black belt – organize improvement teams
Green belt – people within improvement team9
team leaders)
TQM loses effectiveness
The situation where TQM programmes doesn’t guarantee improvement
is known as quality drooping disillusionment.
Quality awards
Quality awards are useful because they:
• Provide motivation for improving quality and pursuing TQM
approaches.
• Provide frameworks to assess quality.
• Provide incentives to improve quality.
• Provide international recognition of success.
Three best known awards in quality are as follows:
The Deming prize
For companies who applies company-wide quality control
What are the main implementation issues in TQM
initiatives?
The main implementation issues are:
To realise that TQM is not a ‘quick fix’ but a long-term
approach to quality. Good quality needs to be
underpinned by systems with clearly set out goals and
guidelines.
The need for top management commitment – because
TQM involves the whole organisation without top level
support any such initiative is doomed to failure. This
support usually is evidenced by an executive champion,
and a high level steering group.
Involving the people who know – TQM is not a management tool
but a means of involving everyone in identifying and solving
problems. It is essential that there should be means of involving
everyone, providing necessary training and also recognising
success when it is achieved.
The final issue is that TQM may, over time, lose its effectiveness
(see figure 20.8), if it is seen as a ’programme’ (with an implied
start and end) rather than a ‘working philosophy’ that is a part of
the organisation’s way of working. To this end many
organisations refrain from using the name ‘TQM’ and simply
seek to encourage good (TQM) practice.
Effectiveness of the TQM initiative
The pattern of some TQM programmes
which run out of enthusiasm
Introduction
Learning and
understanding
Growth
Increasing
enthusiasm
Levelling off
Starting to hit the
more difficult
problems
Disillusionment
Waning
enthusiasm
Repackaging
Attempts to
revitalize the
programme
The malcolm baldrige national quality
award
For American companies to improve quality and
productivity.
EFQM
From European Federation of Quality
Management to recognize quality.
EFQM promotes self- assessment as follows:
The EFQM’s ‘Business Excellence’ model
People
results
People
Leadership
Policy and
strategy
Partnerships
and resources
Processes
Customer
results
Society
results
Key
performance
results