Jpm Tqm Course Mat-1 T-3 Imba 2013

TOTAL TOTAL QUALITY QUALITY

MANAGEMENTMANAGEMENT (TQM)(TQM)

QUALITYQUALITY DefinitionDefinition : :1) Fitness for useFitness for use or fitness for the purposefitness for the purpose :- JuranJuran2) Conformation to the customer’s requirementsConformation to the customer’s requirements :- CrosbyCrosby3) Total composite of characteristicsTotal composite of characteristics of products & services, to meet the to meet the

need andneed and expectations of the customerexpectations of the customer.. :- FeigenbumFeigenbum4) Degree of excellence at an acceptance-price (for the customer) and degree

of control of variability at an acceptable cost (for the producer). :- Bohr

5) Totality of features and characteristicsTotality of features and characteristics of products or services of products or services that bear on its ability to satisfyability to satisfy the stated as well as implied needs of the users. :- ISO :840ISO :840

6) Degree of capability of fulfillmentDegree of capability of fulfillment of customer’s or consumer’s of customer’s or consumer’s requirementrequirement by the inherent characteristics and features of the product. 7)7) Quality is the he measuremeasure of the (i) of the (i) product’sproduct’s conformanceconformance (how close) to the (how close) to the specifications (specifications (requirementrequirement)/ expectation)/ expectation of the customercustomer or (ii) conformanceconformance to the standardsstandards recommendedrecommended by the by the designerdesigner / the / the customercustomer,, and and (iii) the (iii) the degreedegree of its satisfactory performancesatisfactory performance to the to the end-userend-user.

Quality = Quality = Actual Conformance / Performance Actual Conformance / Performance of the productproduct Expectation Expectation or Satisfaction Satisfaction or Requirement Requirement of users users

INTRODUCTIONINTRODUCTION• Before implementation of the Quality Management concept, the manufacturing was

primarily inspection-oriented (ie accept or reject).

• HISTORY OF TQMHISTORY OF TQM : :

# The journey of Quality Management started in 1920’s with its pioneer Quality Guru Walter ShewhartWalter Shewhart, known as the Father of Statistical Quality ControlFather of Statistical Quality Control.

# The American Quality Gurus who developed the Quality Management Concept, in the 1950’s are W Edwards DemingW Edwards Deming, Joseph JuranJoseph Juran and Armand FeigenbumArmand Feigenbum.

# The Japanese Quality Gurus who added values to and extended the American Quality Management ideas and models are Kaoru IshikawaKaoru Ishikawa, Genichi TaguchiGenichi Taguchi and Shigeo ShingoShigeo Shingo.

# The 1970-80’s Western Quality Gurus, Philip CrosbyPhilip Crosby and Tom PetersTom Peters, further extended the Quality Management concepts after the Japanese successes.

• TQM TQM :: Joseph Juran in his QUALITY TRIOLOGYQUALITY TRIOLOGY, indicated the three universal sequences required for Quality management, as

(i) Quality PlanningQuality Planning, (ii) Quality ControlQuality Control and (iii) Quality ImprovementQuality Improvement.

# TQM additionally needs all outall out awarenessawareness, commitmentcommitment & involvementinvolvement (managementmanagement, , workforceworkforce, , supplierssuppliers,, & customers customers and all departmentsall departments)), not only to meetmeet but also to exceedexceed the customer expectations, by quality quality sustainance & improvementsustainance & improvement, leading towards achieving business excellence.

JOURNEY OF TQMJOURNEY OF TQMWALTER SHEWHARTWALTER SHEWHART : : Father of Statistical Quality ControlStatistical Quality Control & the pioneer in modern Quality Approach

Statistical Methods applied to Quality Control

Increased emphasis on Process Improvement

Japan emerges as the World Quality Leader

Total Quality Control in United States

Zero-Defect Movement in the United States

TQM today

1920s – 1940s

1940s

1960s – 1970s

1940–1960s

1970 – 1980s

1980s – to-date

EDWARD DEMINGEDWARD DEMING ::14 Points14 Points TQM ProgramTQM Program, Top Management , Top Management Leadership, Leadership, Deming WheelDeming Wheel (PDCA), (PDCA), Continuous ImprovementContinuous Improvement

Kaoru IshikawaKaoru Ishikawa (Quality CircleQuality Circle, , Fish Bone AnalysisFish Bone Analysis) & & Genichi Genichi TaguchiTaguchi (Quality Loss-FunctionQuality Loss-Function, , Robust Design, Signal-Noise RatioRobust Design, Signal-Noise Ratio)

J. JURANJ. JURAN (Quality TriologyQuality Triology & Quality & Quality CostCost), && A. FeigenbumA. Feigenbum (Management Management Leadership & commitmentLeadership & commitment, , Employees’ InvolvementEmployees’ Involvement)

Philip CrosbyPhilip Crosby (Zero DefectZero Defect, “Quality Quality is freeis free”), Shigeo ShingoShigeo Shingo (Poka YokePoka Yoke)

KANOKANO ((Customer-VoiceCustomer-Voice), QFD, FMEAQFD, FMEA, , FTAFTA,, Six -Sigma,Six -Sigma, LEAN conceptLEAN concept, , SERVQUALSERVQUAL,,

Evolution of TQMEvolution of TQM 1)1) WALTER SHEWHARTWALTER SHEWHART (1920s): an employee of Bell Telephone

developed technical tools of Statistical Quality ControlStatistical Quality Control, which are foundation of modern Quality Management. He is called “Father of Father of Statistical Quality ControlStatistical Quality Control”. He introduced the philosophy of “Quality Quality AssuranceAssurance”.

2)2) EDWARD DEMINGEDWARD DEMING (1940s): being a disciple of Shewhart, he changed the focus of Quality Assurance from technical/statistical aspect to Managerial commitment, support and responsibilityManagerial commitment, support and responsibility. . He advocated “continuous improvementcontinuous improvement” of production process. Deming discouraged inspection only at final stage and recommended quality checking at every stage from the beginning (raw materials). He also recommended extensive Involvement of operatorsextensive Involvement of operators (who knows the machines, process and problems more deeply) in quality maintenance and improvement. He also prescribed the thorough Training of operatorsTraining of operators on Quality Control and Improvement Techniques and methods.“Deming WheelDeming Wheel” ie P-D-C-A CycleP-D-C-A Cycle is an important technique for solving quality problem and continuous quality improvement.Deming’s “14 Points Philosophy14 Points Philosophy” has major influence on modern TQM.

3)3) JOSEPH JURANJOSEPH JURAN (1950s) : Juran included Quality in the Strategic Planning process. “ Juran TriologyJuran Triology” is the three universal sequences or three phases of application of quality, which is suitable for any industry. Juran Triology includes (1) Quality PlanningQuality Planning, (2) Quality ControlQuality Control and (3) Quality ImprovementQuality Improvement.Juran’s COST OF QUALITYCOST OF QUALITY is an important concept for Quality decision.

4)4) A. FEIGENBUMA. FEIGENBUM (1960s) : emphasized on Management Leadership & Management Leadership & CommitmentCommitment and introduced TQM as a “total committed effort, total committed effort, company-wide from the management to employees throughout the company-wide from the management to employees throughout the organizationorganization”, to improve quality continually.

5)5) PHILIP CROSBYPHILIP CROSBY (1970s) : He emphasized on “Cost of Poor QualityCost of Poor Quality” (like loss in cost of manpower, materials, machine-hour, loss of sales, cost of Customer dissatisfaction, etc). He advised for “ZERO DEFECTZERO DEFECT” production.He indicated “Four AbsolutesFour Absolutes” of Quality Management as,(1) Quality should be in conformance to requirements, (2) Prevention of non-conformance is Objective but not appraisal,(3) Performance Standard is Zero DefectZero Defect, not ‘that is close enough’(4) Measurement of quality Measurement of quality is through Cost of Non-conformanceCost of Non-conformance..He prescribed 14 point Prescription14 point Prescription for Quality Improvement.

6)6) K. ISHIKAWAK. ISHIKAWA (1970s) : He promoted “QUALITY CIRCLEQUALITY CIRCLE” and “FISH-FISH-BONE DIAGRAMBONE DIAGRAM” of Cause & Effect Analysis. His philosophy that “a quality organization is needed to create a quality product or service” has been accepted as the base of modern TQM.

7)7) Genichi TaguchiGenichi Taguchi (1980s) : He developed “QUALITY LOSS FUNCTIONQUALITY LOSS FUNCTION” concept which combines Cost, Target and Variation in performance Characteristics into one metric. Because Quality Loss Function is reactive, he developed “Signal to Noise RatioSignal to Noise Ratio” as a proactive equivalent. Robust DesignRobust Design of parameters & tolerance is the outcome of his philosophy.

# # Dimensions / Determinants /Dimensions / Determinants /Customer AttributesCustomer Attributes for PRODUCT QUALITY PRODUCT QUALITY

1)1) ConformanceConformance : : Meeting the characteristics as per the SpecificationsMeeting the characteristics as per the Specifications and relevant Standards and good Industrial Practice & Workmanship

2)2) PerformancePerformance : Basic performance characteristicsBasic performance characteristics of the product like, dimensions and fits & tolerances, capacity, efficiency, max. speed, speed pick-up rate, energy consumption rate, Heating rate, cooling rate, etc.

3)3) FeaturesFeatures : SecondarySecondary (extra) functional valuefunctional value / characteristics added to the product, like remote control to air conditioner or TV or car door lock, camera , internet to cell phone, etc.

4)4) ReliabilityReliability : : Probability that the product will perform properly (as per specifications) throughout its specified life under specified conditions

5)5) Durability / Specified LifeDurability / Specified Life : : Specified useful LifeSpecified useful Life of Performance (may be with repair & maintenance)

6)6) ServiceabilityServiceability : Degree of ease to Degree of ease to repair & maintenancerepair & maintenance responsive to complaints and speedy resolution of the problems

Dimensions / Customer-Attributes for Product QualityDimensions / Customer-Attributes for Product QualityContd….Contd….

7)7) Occupational SafetyOccupational Safety : : for the operator, user and society

8)8) User-friendlinessUser-friendliness : : How easy and quick to use / operate, and not requiring any special skill or knowledge

9)9) Environment-friendlinessEnvironment-friendliness : : not polluting the environment and less depleting the natural resources

10)10) ResponsivenessResponsiveness : human to human interface ie courtesycourtesy and carecare toward customer & consumer

11)11) AestheticsAesthetics : look, finish, taste, smell, feel and sensory characteristics

12)12) CustomizabilityCustomizability / Flexibility/ Flexibility for modification as per the change in customer taste & requirement on quality, quantity and other terms

13)13) ReputationReputation, Brand Image, etc

# # Determinants (Dimensions) of SERVICE QUALITYDeterminants (Dimensions) of SERVICE QUALITY

1.1. TimelinessTimeliness : : PromptnessPromptness and speedspeed in rendering service (less waiting time)2.2. CompletenessCompleteness : of job covering full (complete) scope of workfull (complete) scope of work / responsibility

(not half-done service)3.3. ReliabilityReliability : (i) AccuracyAccuracy of of billsbills, (ii) keeping recordsrecords

correctlycorrectly, (iii) Performing at Performing at designateddesignated time time4.4. CompetenceCompetence : Adequate Adequate knowledge, skillknowledge, skill & experienceexperience of operating personnel5.5. CredibilityCredibility : (i) Trustworthy-nessTrustworthy-ness and (ii)) honestyhonesty in rendering services6.6. SecuritySecurity : (i) Physical & occupational safetyoccupational safety, (ii) ConfidentialityConfidentiality,

(iii) Financial SecurityFinancial Security, (iv) against any other riskother risk7.7. CourtesyCourtesy : Employee’s treatmenttreatment with and carecare to the customer.

(i) Politeness, (ii) friendliness, (iii) cooperation, (iv) paying regard and importance to Customer, (v) neat & pleasing appearance of operating & contact personnel

8.8. ConsistencyConsistency : Maintaining same level of servicesame level of service, effectiveness and quality9.9. AccessibilityAccessibility : Ease of customer to access for getting the service in (i) simple simple

wayway, (ii) Less waiting timeLess waiting time (not long queue) , (iii) convenient hoursconvenient hours for contact / access /service, (iv) convenient locationconvenient location of service facility

10.10. AccuracyAccuracy : How rightly/correctlyrightly/correctly the service is performed11.11. ResponsivenessResponsiveness : How efficiently, effectively and promptlyefficiently, effectively and promptly the employee and

company reactreact against the service requirement or complaintscomplaints.12.12. CommunicationCommunication : explaining clearlyexplaining clearly on (i) the service itself, (ii) cost of service,

(iii) time of service, (iv) any other problem with assuring that it will be taken care of and solved at the earliest.

## Deming : Deming : 14 Point Program for TQM14 Point Program for TQM

1.1. Create a purposeCreate a purpose toward the continuous continuous improvement of productimprovement of product to achieve long term organizational goal.

2.2. Adopt the philosophy of Adopt the philosophy of preventing “poor qualitypreventing “poor quality”” or defectivesdefectives to go into process through “Acceptable Level” of poor quality, because dissatisfied customers will not continue with the product further. Rather quality should be improved by “Improving the Process” (materials, workmanship, machines, maintenance, production process & technology).

3.3. UnderstandUnderstand that the purpose of SQCSQC is to improveimprove the processprocess & design design and also to reduce reduce the costcost. (Because “Final Quality Rejection is too late and too costly and may be sometime incurable”.)

4.4. Suppliers Suppliers or Vendor selection Vendor selection will be mainly based on their “quality quality commitmentcommitment” and not based on the lowest price only.

5.5. Constantly improve the quality systemConstantly improve the quality system focusing on the (i) processprocess and (ii) OperatorOperator.

6.6. Workers’ Training is essentialWorkers’ Training is essential . The training should be focused on (i) IdentificationIdentification & Solving Solving thethe quality problem quality problem, (ii) effectiveeffective use use of of SQC techniques SQC techniques & other Quality Tools& other Quality Tools (iii) Continuous improvementContinuous improvement.

7.7. Instill Leadership among supervisorsInstill Leadership among supervisors to guide and helpguide and help operators to perform better.

Deming 14 Point PhilosophyDeming 14 Point Philosophy

8.8. Encourage employees involvementEncourage employees involvement by (i) eliminatingeliminating FearFear of identifyingof identifying quality problemsquality problems , (ii) treatingtreating them them with dignitywith dignity and (iii) encouragingencouraging them to them to contributecontribute ideasideas for improvement for improvement (ie innovation).

9. Eliminate barriers Eliminate barriers between different departmentsbetween different departments and promote promote cooperation & cooperation & TEAM-APPROACH,TEAM-APPROACH, for working together for working together.

10. Target / focus on QUALITYTarget / focus on QUALITY and and not on quantitynot on quantity (Eliminate numerical quota set for operators to meet at any cost without regard to quality).

11. Eliminate slogansEliminate slogans for quality target for quality target (ie urging upon workers for achieving higher quality-performance level) without providingwithout providing specific process- specific process-improvementimprovement..

12. Enhance worker’s PRIDE of WORKMANSHIPEnhance worker’s PRIDE of WORKMANSHIP and and SELF ESTEEMSELF ESTEEM by recognizing & appreciatingrecognizing & appreciating their participation & sincere efforts, so that workers can perform to their capabilities and considering himself as a family member of the organization having same mission.

13. Vigorous quality-awareness TrainingVigorous quality-awareness Training & Education program & Education program at all at all levelslevels throughout the organizationthroughout the organization.

14. Develop & ensureDevelop & ensure Top Management’s COMMITMENTManagement’s COMMITMENT to implement the above points.

## JURAN’s JURAN’s QUALITYQUALITY TRIOLOGYTRIOLOGY(Three (Three Universal Universal Quality-SequencesQuality-Sequences))

1)1) QUALITY PLANNINGQUALITY PLANNING (& Organizing) (& Organizing)(i) EstablishEstablish the Quality Target / GoalQuality Target / Goal (Optimal Quality)(ii) IdentifyIdentify the CustomerCustomer and and determine Customer- needsCustomer- needs(iii) DevelopDevelop Products and ServicesProducts and Services corresponding to customer need(iv) ArrangeArrange required equipmentequipment, , instrumentinstrument, , infrastructureinfrastructure andand operatorsoperators ((skillskill)) (v) MakeMake Process DevelopmentProcess Development for creating/delivering those products & services(vi) EstablishEstablish Process-control ParametersProcess-control Parameters, , which are to be controlled.

2)2) QUALITY CONTROLQUALITY CONTROL (i) EvaluateEvaluate the the actualactual Quality PerformanceQuality Performance (ii) CompareCompare the performance performance with Quality TargetQuality Target (iii) ActAct on (take corrective stepstake corrective steps for) the variationsvariations

3)3) QUALITY IMPROVEMENTQUALITY IMPROVEMENT(i) EstablishEstablish infrastructureinfrastructure needed to secure periodic qualityperiodic quality improvementimprovement(ii) IdentifyIdentify Quality-improvement PROJECTSQuality-improvement PROJECTS(iii) FormForm Teams Teams to implement improvement projects

(iv) ProvideProvide resources, motivation and trainingresources, motivation and training to the team for quality improvement.

TimeTime

Quality Quality PlanningPlanning

& & OrganizingOrganizing

Quality ControlQuality Control Quality ImprovementQuality Improvement

Original Zone of Original Zone of Quality ControlQuality Control

New (Improved) New (Improved) Zone of Quality Zone of Quality ControlControl

Chronic Waste

Quality Improvement

JURAN’s Quality-TRIOLOGY DiagramJURAN’s Quality-TRIOLOGY Diagram

Quality variationQuality variation

Variation Limit

## JURAN’sJURAN’s Concept on Concept on QUALITY COSTQUALITY COSTQUALITY COSTQUALITY COST is the costs associated with providing quality of the product or costs associated with providing quality of the product or serviceservice ie cost incurred to ensure perfect / approved quality of product or service.

COMPONENTS of COMPONENTS of QUALITY – COSTQUALITY – COSTA.A. COST OF QUALITYCOST OF QUALITY : :

1)1) Q. PREVENTION COSTQ. PREVENTION COST : : Cost required to prevent the generation of poor quality product & service, ie product to meet customer satisfaction and compliance / conformation to specified quality. It includes : (i) Quality Planning CostQuality Planning Cost ie cost of developing & implementing the Quality Quality Management Program.Management Program.(ii) Cost of Design & Process ReviewDesign & Process Review & Re-Design of product & & Re-Design of product & processprocess.(iii) Quality Education & TrainingQuality Education & Training Cost.(iv) Cost of ReviewReview ofof ‘‘VENDOR QUALITY CAPABILITY’VENDOR QUALITY CAPABILITY’ (v) Process ImprovementProcess Improvement Cost(vi) Information CostInformation Cost (data collectiondata collection & recording, data processingdata processing & data analysisdata analysis)

2) 2) Q. APPRAISAL COSTQ. APPRAISAL COST : : Cost associated with Quality ControlQuality Control ie INSPECTION, CHECKING, TESTING & MEASURINGINSPECTION, CHECKING, TESTING & MEASURING, evaluating and , evaluating and auditingauditing of quality of product to ensure the quality conforming to specifications and requirements.

QUALITY COST

3) 3) Quality Failure TANGIBLE CostQuality Failure TANGIBLE Cost : : When final product does not conform to specifications or customer requirements ie when Quality Rejections, defectives and failure to perform are there, the cost associated with

(i) ScrapScrap (Rejections which are not re-workable or repairable)(ii) Re-doing/ Re-workingRe-doing/ Re-working on Rejections which are re-workable or repairable, Over-timeOver-time for re-doing, Re-inspection & testingRe-inspection & testing

(iii) Re-orderingRe-ordering(iv) Servicing / Repairing Servicing / Repairing at siteat site when the product fails in operation, (v) ReturnReturn and Replacement of defectivesReplacement of defectives, (vi) Process Failure AnalysisProcess Failure Analysis (causes of failure of the production process) (vii) Process-downtimeProcess-downtime (shutting down the production process

(1) to prevent continuing generation of defects, and (2) to identify & locate the problem and its cause and to rectify,

(viii) Price discountPrice discount (in case of selling the defectives as “Seconds”)(ix) PenaltyPenalty for late delivery(x) Excessive InventoryExcessive Inventory

4)4) Quality Failure INTANGIBLE CostQuality Failure INTANGIBLE Cost : : Hidden Costs (which are difficult to quantify), associated with non-conformance of product to customer requirements. It includes cost of (i) Complaint-handlingComplaint-handling,

(ii) Customer DissatisfactionCustomer Dissatisfaction leading to loss of customersloss of customers, (iii) Loss of goodwillLoss of goodwill / brand imagebrand image, (iv) Loss of salesLoss of sales.

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• Cost of Quality (COQ)Cost of Quality (COQ)

= Quality Prevention CostQuality Prevention Cost + + Quality Appraisal CostQuality Appraisal Cost

• Cost Of Defectives (COD)Cost Of Defectives (COD)

= Q Failure Tangible CostQ Failure Tangible Cost + + Q. Failure Intangible CostQ. Failure Intangible Cost

Quality Cost = Quality Cost = Cost of QualityCost of Quality + + Cost of DefectivesCost of Defectives

JURAN’sJURAN’s COST OF QUALITY ( COST OF QUALITY (COQCOQ) Optimization) Optimization : :Juran expressed that TotaTotal l Quality CostQuality Cost has two components

(i) Cost of QualityCost of Quality (COQCOQ) : (Prevention Cost + Appraisal CostPrevention Cost + Appraisal Cost)

(ii) Cost of DefectivesCost of Defectives : Quality Failure Cost (QFC) + QF Intangible Cost

100%100% ( (100% defect-free100% defect-free))

0%0% ((100% defectives100% defectives))

QualityQuality

Cost/unitCost/unit

Q*Q* Optimum QualitityOptimum Qualitity

COQ (COQ (Cost of QualityCost of Quality))

COD (COD (Cost of DefectivesCost of Defectives))

QUALITY COSTQUALITY COST (QCQC)

Min. CostMin. Cost ● ●

Quality Cost INDEX NUMBERQuality Cost INDEX NUMBER : :

Quality Cost can be expressed / interpreted in a meaningful way by INDEX NUMBER which is the ratio of quality cost and a ratio of quality cost and a base cost-valuebase cost-value.

Quality – Quality – SalesSales Index Index = Total Quality Cost Total Sales RevenueTotal Sales Revenue

Quality – Quality – CostCost Index Index = Total Quality Cost Total Production CostTotal Production Cost

[Index shows the trend of quality improvement. Reduction of Quality Index Reduction of Quality Index shows the quality improvementshows the quality improvement.]

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QUALITY – PRODUCTIVITYQUALITY – PRODUCTIVITY Ratio Ratio ((QPRQPR)) : :

QPRQPR = Good quality units .(Input quantity x Processing cost per unit) + (Defective quantity x Re-work

cost)

[ It shows the trend of Productivity improvementtrend of Productivity improvement. QPR can be increased by (i) Quality improvement , and/or (ii) reducing of re-working cost, and/or (iii) by reducing the processing cost.]

Example-1 on QPRQPRH S Motor Co. produces electric motors at a processing cost of $30 per unit and defective ones can be reworked at an average cost of $12 per unit. The Co. produces 100 motors/day out of which 80% are of good quality and 50% of the defective products can only be reworked to acceptable quality level.The Co. wants to improve the productivity and ask you to give your impression on the effect of following 4 different proposals on productivity improvement,

(i) Increase the production rate to 200 motors/day,(ii) Reduce the processing cost to $27 and reworking cost to $10,(iii) Increase the product yield of good quality to 95%, by process improvement, with increase in processing cost to $ 30.20 per unit,(iv) Increase the product yield of good quality to 85% by process improvement, along with reduction of reworking cost to $10 per unit.

Solution-1Solution-1Existing QPR, QPR0 = 80 + 0.5 x 20 = 0.02890.0289 100x$30 + 10x$12 Proposal-1 : Increase the production rate increased to 200 motors/day,

QPR1 = 160 + 0.5 x 40 = 0.02890.0289 QPRQPR11 = QPR = QPR00

200x$30 + 20x$12

Proposal-2 : Reduce the processing cost to $27 and reworking cost to $10,QPR2 = 80 + 0.5 x 20 = 0.032140.03214 QPRQPR22 > QPR > QPR00

100x$27 + 10x$10

Proposal-3 : Increase the product yield of good quality by quality improvement to 95%, with increase in processing cost to $ 30.20 per unit,QPR3 = 95+ 0.5 x 5 = 0.031970.03197 QPR3 > QPR0

100x$30.20 + 2.5x$12 QPRQPR33 < QPR < QPR22

Proposal-4 : Increase the product yield of good quality by quality improvement to 85%, along with reduction of the reworking cost to $10,QPR4 = 85+ 0.5 x 15 = 0.030080.03008 QPRQPR44 < QPR < QPR33

100x$30 + 7.5x$10

QPRQPR22 > QPR > QPR3 3 > QPR> QPR44 >QPR >QPR1 1 & QPR& QPR00

QPR is maximum in Proposal-2 (by Reducing the processing cost to $27 and reworking cost to $10). So, proposal-2 may be adopted for Productivity improvement.

Example-2 on QPRQPRH S Motor Co. produces electric motors at a processing cost of $30 per unit and defective ones can be reworked at an average cost of $12 per unit. The Co. produces 100 motors/day out of which 75% good quality and 40% of the defectives can only be reworked to acceptable quality level.

The Co. wants to improve the productivity and ask you to give your impression on the effect of following 4 different proposals on productivity improvement,

(i) Increase the production rate by 50%,

(ii) Reduce the processing cost to $28 and reworking cost to $10,

(iii) Increase the product yield of good quality by quality improvement to 85%,

(iv) Increase the product yield of good quality by quality improvement to 95%,

with an increase of the processing cost to $30.50.

[Ans : QPR1 == QPR0 = = 0.027240.02724 , QPR2 == 0.02931 0.02931 , QPR3 == 0.029620.02962 ,

QPR4 == 0.031550.03155 . QPRQPR44> QPR> QPR33 > QPR > QPR22 >QPR >QPR1 1 & QPR& QPR0 0 ]

## Essentials forEssentials for Implementing TQMImplementing TQM 1.1. CommittedCommitted and involvedinvolved ManagementManagement : to provide long term LeadershipLeadership

and organizational supportorganizational support

2.2. Focus Focus on CustomerCustomer, both internalinternal & externalexternal

3. Effective InvolvementInvolvement & ParticipationParticipation of entire Workforceentire Workforce, 4.4. EmpowermentEmpowerment of participating workforceparticipating workforce

5.5. Quality TrainingQuality Training for entire workforceentire workforce

6.6. Quality Culture Quality Culture and Team Spirit Team Spirit among entire workforceentire workforce in any department and among all departmentsall departments

7.7. Quality Management SystemQuality Management System (QMSQMS) & Quality Assurance Quality Assurance

8.8. CONTINUOUS IMPROVEMENTCONTINUOUS IMPROVEMENT of Business Process and Production Process

9. Forming Quality Steering CommitteeQuality Steering Committee / Quality CouncilQuality Council , , headed by CEO and members from different sections and the Quality Manager; and under Q Council, Quality Sub-GroupsQuality Sub-Groups at different sections or branches, for TQM implementation operation in big industries.

10. Continuous Self Performance MeasurementSelf Performance Measurement and “BenchmarkingBenchmarking for the Process and performance”

11. Good communicationcommunication – both internal & external – both internal & external12.12. Collaborative relationCollaborative relation with suppliers / vendors with suppliers / vendors (Treating the SUPPLIER as SUPPLIER as

PARTNERPARTNER)

TOOLS & TECHNIQUES for TQMTOOLS & TECHNIQUES for TQM1.1. Quality Planning Quality Planning (Quality Policy, SMART Goal Setting, Optimum Quality

Target, Quality Strategies, etc)2.2. Statistical Quality ControlStatistical Quality Control3.3. QFDQFD (Quality Function Deployment)4.4. FMEAFMEA (Failure Mode & Effect Analysis)5.5. FTAFTA (Fault Tree Analysis)6.6. QUALITY CIRCLEQUALITY CIRCLE7.7. TOTAL PRODUCTIVE MAINTENANCETOTAL PRODUCTIVE MAINTENANCE (TPMTPM)8.8. Deming WheelDeming Wheel (PDCA CyclePDCA Cycle) for continuous improvement9.9. Root Cause AnalysisRoot Cause Analysis (Why-Why, Why-Why, (Ishikawa) Fish Bone AnalysisFish Bone Analysis, etc)10.10. BrainstormingBrainstorming11.11. Poka YokePoka Yoke12.12. 5 S5 S (Sort, Set in order, Sweep, Standardize, Sustain)13.13. Self Performance AssessmentSelf Performance Assessment & BenchmarkingBenchmarking14.14. Six SigmaSix Sigma [ DMAICDMAIC : (i) DefineDefine quality problem; (ii) MeasureMeasure Key Aspect & Collect

relevant data; (iii) AnalyzeAnalyze the collected data; (iv) ImproveImprove/Optimize current process; (v) Control Control (Check, (Check, Review & Correct). : - For existing product: - For existing product

DMADVDMADV : Define; Measure; Analyze; Design; Verify. : - For new product: - For new product ]

Redesign of product

BENEFITS of TQMBENEFITS of TQM 1. Improvement of QualityQuality of products and services and its consistency

2. Improvement of competitivenesscompetitiveness

3. Improved Delivery commitmentDelivery commitment

4. Improved Customer-satisfactionCustomer-satisfaction

5. Increase of Market ShareMarket Share

6. Reduction of Scrap Scrap and cost of defectivescost of defectives

7. Reduction in InventoryInventory

8. Increase of ProductivityProductivity and ProfitabilityProfitability

9. Improved Team workTeam work and Team spiritTeam spirit

10. Increase of Employees’ involvementEmployees’ involvement and participationparticipation

11. Improved Employees’ self-esteemself-esteem & motivationmotivation

12. Improved CommunicationCommunication – both internal and external

I N S P E C T I O NI N S P E C T I O N

INSPECTIONINSPECTIONInspectionInspection may be (i) Pre-shipmentPre-shipment (In-shop Final Inspection), (ii) StageStage InspectionInspection, (iii) Third-Party InspectionThird-Party Inspection by authorized & appointed Inspection Agency, (iv) Customs inspectionCustoms inspection (on Quality, Quantity and Price) (v) Inspection at Inspection at receiving endreceiving end ,for quality & quantity.

Responsibilities of Inspection WingResponsibilities of Inspection Wing : :1) EstablishingEstablishing the ObjectivesObjectives of inspection of the particular material.2)2) DefiningDefining the details of Methods of sampling, inspection, measurement and Methods of sampling, inspection, measurement and

testingtesting..3)3) DeterminingDetermining the targetedtargeted Quality-SpecificationsQuality-Specifications to be met for the particular item

being processed, matching with the need of the users, as the guideline for inspection.

4)4) FixingFixing the the targeted Qualitytargeted Quality of supplyof supply of raw-material and components.5)5) DefiningDefining the Acceptable Quality LevelAcceptable Quality Level ( (AQLAQL) ) as per buyer’s strategy as well as

mutual agreement between buyer and seller.6)6) DefiningDefining the responsibilities, authorityresponsibilities, authority and accountabilityaccountability of each position in

processing line.7)7) Investigating and AnalyzingInvestigating and Analyzing any complaintcomplaint received from the end-usersend-users or

consumersconsumers, , regarding Quality8)8) MaintainingMaintaining the accuracyaccuracy, sensitivitysensitivity, operabilityoperability of all equipment equipment and

instrumentinstrument for inspection & testing.9)9) PreparingPreparing proper Inspection ReportInspection Report & Delivery-Clearance CertificateDelivery-Clearance Certificate after

satisfactory inspection of quality and quantity.10) Rendering assistance assistance to Vendor DevelopmentVendor Development wing by Rating of vendors, with

records in respect of Quality.

TYPESTYPES ofof INSPECTIONINSPECTION

1.1. Stage InspectionStage Inspection : : during Procurement, Manufacturing/ during Procurement, Manufacturing/ Operational process and Assembly, Operational process and Assembly, before Pre-shipment (final) inspection on output products, by manufacturer’s inspection team , by manufacturer’s inspection team and/or Buyer’s representatives. and/or Buyer’s representatives.

2.2. Pre-shipment InspectionPre-shipment Inspection :: after Manufacturing/ Operational after Manufacturing/ Operational process/ Assembly of final product, process/ Assembly of final product, finally before deliveryfinally before delivery but before before PackagingPackaging, by the manufacturer and/or Buyer’s representatives or , by the manufacturer and/or Buyer’s representatives or Third-Party (Inspection Agencies).Third-Party (Inspection Agencies).

3.3. Third-Party InspectionThird-Party Inspection : : during and/orduring and/or after Manufacturing / after Manufacturing / Operational process/ Assembly of final product Operational process/ Assembly of final product before delivery, , on QuantityQuantity, , QualityQuality and and PackagingPackaging, , by by Third-PartyThird-Party Inspection Inspection AgenciesAgencies whose appointment has agreed / approved by both buyer whose appointment has agreed / approved by both buyer and supplier and also by statutory authorities.and supplier and also by statutory authorities.

4.4. Customs InspectionCustoms Inspection : : on on QualityQuality, , QuantityQuantity, , PackingPacking & & PricePrice ( (as per Packing ListPacking List & Proforma InvoiceProforma Invoice along with along with shipping shipping documentsdocuments), ), at portsat ports just before shipment just before shipment and also at the port at the port of destination.of destination.

5.5. Final Inspection at Receiving end (at site)Final Inspection at Receiving end (at site) :: on Quality, on Quality, Quantity, damages if any, performance, etc. by the Quantity, damages if any, performance, etc. by the ReceiverReceiver or or Buyer Buyer or or UserUser, , at siteat site or or at the point of receivingat the point of receiving..

QUALITY-INSPECTIONQUALITY-INSPECTION

(A) (A) INSPECTION METHODSINSPECTION METHODS : : (mainly Measurement, testing &

comparison) (1) (1) VisualVisual (colour, shape, finish, damage, etc) (2) (2) TouchingTouching (mainly for finish, fitting, texture, etc) (3) (3) SmellingSmelling (odour or correct smell like coconut oil, chemicals, talcum powder, perfume, some

of food staff, etc), where ever applicable

(4) (4) MeasurementMeasurement [size/dimensions, tolerances, capacity (by volume or weight), weight, density, viscosity, voltage, current, electrical resistance, electrical power, speed, pH, etc]

(5) (5) GaugingGauging (Go & Not-go, match or no-match type)

(6) (6) Testing Testing in Laboratoriesin Laboratories (strength, hardness, efficiency, performance, micro cracks or internal cracks (X-ray testing / Radiography) , pressure rating, temperature rating, etc) (7)(7) ComparisonComparison of measured data (i) with quality

data of standard samplesample or (ii) data prescribed in relevant StandardStandard or (iii) specified specified datadata

Quality INSPECTION (contd.)

(B)(B) SAMPLINGSAMPLING : : Picking up an adequate number (Sample Size) of items (from an big lot of

the same item, offered for Inspection), which truly represent the entire which truly represent the entire populationpopulation of the offered/ referred lot, with the purpose of Inspection and Testing, – with the OBJECTIVEOBJECTIVE to considerably reducereduce the (i) Insp. TimeInsp. Time, (ii) Insp. Insp. CostCost,, (iii) Insp. effort,Insp. effort, (iv) Insp. FatigueInsp. Fatigue,, (v) Insp. ManpowerInsp. Manpower, (vi) Damage Damage of productsof products (in case of destructive testing), (in case of destructive testing), for inspection.

The true Sample must be theThe true Sample must be the “real representatives of the whole “real representatives of the whole population”population”..For inspection, Acceptance SamplingAcceptance Sampling is the process of inspecting / evaluating a portion of the products in a lot called “Sample”, for the purpose of acceptingaccepting the complete lot as “conformingconforming”, or rejectingrejecting the complete lot as “Non-conformingNon-conforming” to the quality specification.

(i)(i) SAMPLING METHODSSAMPLING METHODS : :

1) 1) Simple Random SamplingSimple Random Sampling : : All the items of the sample are arbitrarily (at random) selected from any where of the entire lot. Each Each item of the population has equal probability to be selected & inspecteditem of the population has equal probability to be selected & inspected.

2)2) Stratified SamplingStratified Sampling : : The entire population of a big lot can be divided systematically into a number ofa number of homogeneoushomogeneous groups or sub-lots or stratastrata. . eg Product: Fans & strata : ceiling fan – 42”,48”, 54”, etc., table fan, pedestal fan, blowers (3 sizes). Then Proportional Proportional sampling is done randomly from each of the strata, to meet the Sample Size.

Quality INSPECTION : Sampling Method (contd.)

3)3) Systematic SamplingSystematic Sampling : : When the lot size lot size of the product is very very bigbig and the lot is presented in many groups groups like stacks, piles, bins, chambers, etc., Systematic Sampling may be suitably adopted.

In this method, adequate no. of sample-itemssample-items are systematically selected from the systematically selected piles or stacks or bins, etc of the lot, at regular predetermined intervalat regular predetermined interval to meet the Sample Size (depending on the size of the lot). [example : 3rd, 13th, 23rd, 33 rd, …..items from 1st stack; 7th, 17th, 27th, 37th, …items from 2nd stack, and so on] or K number of items randomly from each of the 2nd , 5th, 8th, 11th, 14th , …. stack)

4)4) Cluster SamplingCluster Sampling :: When the lot contains a (i) good number ofgood number of clustersclusters or packspacks, (ii) each of small no. of itemseach of small no. of items. First random

sampling is done on the packs/clusters in the lot and then all the items all the items of the selected sample-packsof the selected sample-packs (which constitute Sample Size) are inspected.

5)5) Two-stage SamplingTwo-stage Sampling :: When a huge lot sizehuge lot size, containing a good number of packsgood number of packs or sub-lots, each pack/sub-loteach pack/sub-lot containing containing a gooda good number of itemsnumber of items, Two-stage Sampling may be adopted. In this method, at the first stage, selection of packsselection of packs is done randomly randomly or systematicallyor systematically from the good number of packs in the lot, and then at the second stage, selection of itemsselection of items is again again done randomly or systematicallyrandomly or systematically from the each of the selected sample-pack.

Quality INSPECTION (Sampling)

(ii) (ii) SAMPLE SIZESAMPLE SIZE : : The Sample Size is the minimum statistically statistically adequate numberadequate number of sample-items to be selected from the whole lot / whole lot / populationpopulation, by any sampling method, for the purpose of quality Inspection of the offered lot.Sample Size dependsSample Size depends on, on,

(i) Variation in observations (measurements XXii) in the population(ii) Status of existenceStatus of existence of items (Mixed / Focused / Stratified / Clustered or Continuous / Categorical)(ii) Confidence LevelConfidence Level / Significance Level (Z is dependent on Conf. L)(iv) PrecisionPrecision Interval (h is dependent on Interval (h is dependent on Precision IntervalPrecision Interval))

N N samplesample = = ZZ2 2 .. [[ N ∑ X N ∑ Xii 2 2 - (∑ X - (∑ Xii))22 ] ] hh22 (∑ X (∑ X ii))22

where, Z Z = Standard Normal StatisticsStandard Normal Statistics at given CONFIDENCE LEVELCONFIDENCE LEVEL (90% to 98%) which indicates probability of getting correct representativecorrect representative result.

[Z = 2Z = 2 and 1.281.28 at Service LevelService Level 97.7% and 90%97.7% and 90% respectivelyrespectively] [Significance LevelSignificance Level = (100 – Confidence Level) = 2.3 % 2.3 % for 97.7% C.L 97.7% C.L] hh = ½ of ½ of Confidence IntervalConfidence Interval (or Precision IntervalPrecision Interval)

(Confidence IntervalConfidence Interval is the variation of confidence level around its mean ) [ Precision Interval is usually ± (2 to 3)% , for ± 3%, h h = 0.03– ( - 0.03) = 0.03 ]

2 NN = Ad-hoc no. of sample-itemsAd-hoc no. of sample-items already inspected Xi = Individual observations on already inspected items (ad-hoc)