-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 1
TOTAL QUALITY MANAGEMENT Sub Code: 12MBA42 IA Marks: 50
No. of Lecture Hrs/week: 04 Exam Hrs. 03 Hours
Total No. of Lecture Hrs. 56 Exam Marks: 100
Practical Component: 01 Hr/ Week
Module I (6 hours) Introduction to TQM,Meaning of the terms
quality, quality control and quality assurance,
importance of quality, quality dimensions of products and
services, quality and competitive
advantage, cost of quality, TQM, Evolution of TQM, Basic
principles of TQM, TQM VS
Traditional management, advantages of TQM
Module II (10 Hours) Philosophical Framework to TQM Contribution
of various gurus of TQM,Deming-Demings
chain reaction, Demings principles, deadly sins, PDCA cycle,
Jurans Quality triology, Jurans
breakthrough sequence, Philips Crosby- Quality is free, Taguchis
Quality loss function, Ishikawas contributions and Quality
Circles.
Module III (6 Hours) Benchmarking Definition, reasons for
benchmarking, types of benchmarking, process of
benchmarking what to benchmark, understanding current
performance, planning, studying
others, using findings, Xerox model of Benchmarking, Advantages
and pitfalls of benchmarking
Concept of Kaizen and its applications
Module IV (6 Hours) Business Process Re-engineering (BPR)
Introduction, Need for BPR, Implementing BPR, Steps
in BPR, Re-engineering vs. TQM, BPR Vs. Kaizen, Re-engineering
the structure, change
management and BPR, BPR and IT, Advantages and Limitations,
Indian examples of BPR
Module V (8 Hours) Quality Management Systems(QMS) Introduction,
meaning of QMS, ISO 9000, Benefits of ISO,
ISO 9000-2008 series, implementation of ISO 9000,Problems
related to ISO 9000, QS 9000,
Need for QS 9000, QS 9000 series ENVIRONMENTAL MANAGEMENT SYSTEM
(EMS),
ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000
& 14000, SEI-CMM level 5
Module VI (6 Hours) Quality Awards : Introduction, Need for
Quality Awards, Deming Prize and its features,
MBNQA and its features, European quality award and its features,
Golden peacock award, TQM
models.
Module VII (8 Hours) Quality Control tools: Introduction, 7
tools of quality control (Old & New), Poka-yoke, Quality
Function Deployment.
Module VIII (6 Hours)
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 2
Introduction to Six Sigma Historical developments, statistical
framework for six sigma, DPU and
DPMO concepts, DMAIC methodology, Training for Six Sigma,
Benefits of Six Sigma, Six
sigma and TQM.
Practical Component: Students have to study any Indian
organization which has won Deming prize and identify the
quality initiatives of that organization
Students are expected to study various quality awards given in
India like CII Business excellence
award, Rajiv Gandhi national quality award and Tata groups
Excellence Award and compare
with international awards
Students can identify any 2 products and 2 services and develop
Quality attributes for the same.
Students can identify industry from any sector and conduct a
benchmark study with respect to
best in the class.
RECOMMENDED TEXT BOOKS: 1. Management and Control of Quality,
James R. Evans, 8/e 2012, Cengage Learning
2. Total Quality Management, Dale.H. Besterfield, 3rd Edition,
Pearson Education
3. Total Quality Management Text and Cases, G.
Nagalingappa&Manjunath VS, Excel books.
4. Total Quality Management, ShridharBhat, Himalaya
Publication
REFERENCE BOOKS: 1. Total Quality Management by
PoornimaM.Charantimath, Pearson Education.
2. Quality Control Handbook by JURAN, Mc.Graw Hill
Publication
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 3
TABLE OF CONTENTS
MODULE I
MODULE NO CONTENT PAGE NO
1 Introduction to TQM 04 to 16
2 Philosophical Framework of TQM 17 to 36
3 Benchmarking 37 to 45
4 Business Process Reengineering(BPR)
46 to 57
5 Quality Management Systems(QMS)
58 to 74
6 Quality Awards 75 to 90
7 Quality Control 91to 102
8 Six Sigma and other developments 103 to 109
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 4
Introduction to TQM,Meaning of the terms quality, quality
control and quality assurance,
importance of quality, quality dimensions of products and
services, quality and competitive
advantage, cost of quality, TQM, Evolution of TQM, Basic
principles of TQM, TQM VS
Traditional management, advantages of TQM.
OBJECTIVE
To Understand and appreciate
Concepts and Practices of TQM
Meaning of the terms quality,
Quality control and
Quality assurance,
Importance of quality,
Quality dimensions of products and services,
Quality and competitive advantage,
Cost of quality,
TQM, Evolution of TQM,
Basic principles of TQM,
TQM VS Traditional man
INTRODUCTION TO TQM
Total quality management (TQM) refers to methods used to enhance
quality and
productivity in organizations, particularly businesses. TQM is a
comprehensive system
approach that works horizontally across an organization,
involving all departments and
employees and extending backward and forward to include both
suppliers and
clients/customers.
TQM is only one of many acronyms used to label management
systems that focus on
quality. Other acronyms that have been used to describe similar
quality management
philosophies and programs include CQI (continuous quality
improvement), SQC
(statistical quality control),QFD (quality function deployment),
QIDW (quality in
daily work), and TQC (total quality control). Despite the
ambiguity of the popularized
term "TQM," that acronym is less important than the substance of
the management
ideology that underlies it. TQM provides a framework for
implementing effective quality
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 5
and productivity initiatives that can increase the profitability
and competitiveness of
organizations.
Although TQM techniques were adopted prior to World War II by a
number of
organizations, the creation of the total quality management
philosophy is generally
attributed to Dr. W. Edwards Deming (1900-1993). In the late
1920s, while working as a
summer employee at Western Electric Company in Chicago, he found
worker motivation
systems to be degrading and economically unproductive;
incentives were tied directly to
quantity of output, and inefficient postproduction inspection
systems were used to find
flawed goods.
Deming teamed up in the 1930s with Walter A. Shewhart
(1891-1967), a Bell Telephone
Company statistician whose work convinced Deming that
statistical control techniques
could be used to supplant traditional management methods. Using
Shewhart's theories,
Deming devised a statistically controlled management process
that provided managers
with a means of determining when to intervene in an industrial
process and when to
leave it alone. Deming got a chance to put Shewhart's
statistical quality-control
techniques, as well as his own management philosophies, to the
test during World War
II. Government managers found that his techniques could easily
be taught to engineers
and workers, and then quickly implemented in overburdened war
production plants.
One of Deming's clients, the U.S. State Department, sent him to
Japan in 1947 as part of
a national effort to revitalize the war-devastated Japanese
economy. It was in Japan that
Deming found an enthusiastic reception for his management ideas.
Deming introduced
his statistical process control, or statistical quality control,
programs into Japan's
ailing manufacturing sector. Those techniques are credited with
instilling a dedication
to quality and productivity in the Japanese industrial and
service sectors that allowed
the country to become a dominant force in the global economy by
the 1980s.
While Japan's industrial sector embarked on a quality initiative
during the middle
1900s, most American companies continued to produce mass
quantities of goods using
traditional management techniques. America prospered as
war-ravaged European
countries looked to the United States for manufactured goods. In
addition, a domestic
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 6
population boom resulted in surging U.S. markets. But by the
1970s some American
industries had come to be regarded as inferior to their Asian
and European competitors.
As a result of increasing economic globalization during the
1980s, made possible in part
by advanced information technologies, the U.S. manufacturing
sector fell prey to
more competitive producers, particularly in Japan.
In response to massive market share gains achieved by Japanese
companies during the
late 1970s and 1980s, U.S. producers scrambled to adopt quality
and productivity
techniques that might restore their competitiveness. Indeed,
Deming's philosophies and
systems were finally recognized in the United States, and Deming
himself became a
highly sought-after lecturer and author. The "Deming Management
Method" became the
model for many American corporations eager to improve. And total
quality
management, the phrase applied to quality initiatives proffered
by Deming and other
management gurus, became a staple of American enterprise by the
late 1980s. By the
early 1990s, the U.S. manufacturing sector had achieved marked
gains in quality and
productivity. By the late 1990s several American industries had
surpassed their
Japanese rivals in these areas.
MEANING OF THE TERMS QUALITY, QUALITY CONTROL AND QUALITY
ASSURANCE
CONCEPTS OF QUALITY
Q- Quest for excellence
U- Understanding customers needs
A- Action to achieve customers appreciation
L- Leadership-determination to be a leader
I- Involving all people
T- Team spirit to work for a common goal
Y- Yardstick to measure progress
Quality Definitions
The ability of a product or service to meet customer needs
The totality of features and characteristics of a product or
service that bears on its ability to satisfy stated or implied
needs-American Society for Quality
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 7
Meeting or exceeding customer requirements now and in the
future.
This means that the product/service is fit for customers use,
Fitness for use is related to benefits
received by the customer and to ensure customer
satisfaction.
Quality control
Quality control denotes all those activities which are directed
to maintain and improve quality.
Quality control involves.
1. Setting of Quality targets
2. Appraisal of conformance (adhering to rules)
3. Taking any corrective action where any deviation is
noticed
4. Planning for improvements in quality
Objectives of quality control
products which are dependable, satisfactory and economical to a
customer
SQC (Statistical Quality control)
manufactured product with the help of statistical knowledge.
assignable causes encountered in the production process.
Organising for quality control
Traditionally Quality control department has the role of a
watchdog over production department
employees
employee is responsible for quality
which is called as quality at source
Quality at source
and product
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 8
Quality circle to analyze quality
problems and to solve quality problems.
Quality control strategy and policy
uality right first
time which aims at continuous improvement of quality . To
facilitate this Quality policy must be formulated.
Quality assurance
quality
lity assurance is intended to include of all activities
performed to ensure that the product
performs to the customers expectations and many departments are
involved in it.
Activities in Quality assurance
design will have adequate useful life
product
manuals
cates inadequate
quality
Quality assurance system
method of maintaining quality
d as an assembly of elements such as organizational
structure, responsibilities, procedures, processes and resources
for managing quality.
The quality assurance system must be documented in the form of a
quality manual covering the
following areas:
The quality assurance system must be documented in the form of a
quality manual covering the
following areas:
1. Quality planning
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 9
2. Quality advice and expertise
3. Training personnel
4. Purchase, process, service appraisal methodology
5. Customer complaints, warranty claims
6. Senior management
7. Marketing
8. Research and development
9. Product design
10. Production and operations
11. After sales/service
12. Stores/distribution/transport
Total quality control (TQC) -wide-view of product quality to
achieve competitive positions by
offering quality products to consumers covering from a shop
floor to a board room is termed as
Total Quality control (TQC)
ality control is an effective system for integrating
quality development, quality maintenance and quality improvement
efforts of the various groups
in an organization so as to enable marketing, engineering,
production and service at the most
economic levels which allow for full customer satisfaction
Importance of quality
Producing superior quality products / service is vital to the
continued growth success of a
company, therefore benefits of quality are given below.
1. It gives a positive company image
2. It improves competitive ability both nationally and
internationally
3. It increases market share, which translates into improved
profits
4. Overall it reduces costs which also results in profits
5. It reduces problems & avoids unnecessary costs
6. It creates an atmosphere for high employee morale, which
improves productivity .
Quality Dimensions of products and services
Quality expected from a product (Tangible)
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 10
Eg: TV, Computers, Bikes
1. Performance: how well the product performs customers use eg:
speed of a laser printer
2. Features: special characteristics that attracts a customer
eg: power steering and central locking
system of an automobile
3. Reliability: frequency of malfunction, breakdown or repairs
eg: cartridge of a xerox machine
4. Serviceability: speed , cost and convenience of repairs and
maintenance eg: service of washing
machines
5. Durability: length of time of use before repairs/replacement
eg: a car can be used for 5-10
years
6. Appearances: look, feel, taste , smell or sound of a product
eg: look of a bike, smell of a
perfume, sound of a music system
7. Customer service: treatment received by customers before,
during and after the product sale
eg: credit card
8. Safety: how well the product protects users during use eg:
helmets
Quality concepts of Service
Quality expected from service sectors (Intangible) Eg: Hotel,
Hospitals, Banks
1. Reliability: consistency and dependability
2. Responsiveness: willingness to provide service
3. Competence: possession of skills and knowledge to perform
4. Access: approachability and ease of contact
5. Courtesy: politeness, respect, neatness and appearance
6. Communication: talking to customers in their language
7. Credibility: trust and belief
8. Security: freedom from danger, risk
9. Understanding the customer needs: learning customer
requirement, providing individual
attention
10. Tangibles: physical evidence of service (facilities, tools
and equipment) eg: a cinema theatre
with good seating arrangement
Quality and Competitive advantage.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 11
1 Market route benefits
Continuous quality Improvement
Improved competitive position
Higher prices and increased market share
Increased revenue
Increased profits
2 Cost route benefits
Continuous quality Improvement
Improved defect-free output
Reduced costs of operations
Increased profits
Cost of quality
Cost of quality (COQ)/(COPQ) is the sum of cost incurred by an
organization in preventing poor
quality. There are essentially 4 types of quality costs as
below
These are certain costs which are associated with product and
service quality. There are 4 major
categories of quality costs. They are
1. Prevention costs
2. Appraisal costs
3. Costs of internal failures
4. Costs of external failures
Prevention costs
Are associated with preventing defects before they happen. They
include costs of
Appraisal costs
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 12
Internal failure costs
ts need to be repaired or scrapped
External failure costs
Total quality management
Total Quality covers
Earlier concept of quality related with a product is no more
valid.
1. Quality is ultimately decided by all the processes which get
included in the quality loop.
2. Total Quality covers every job , not just one involved in
making of the product. Eg: secretaries
are expected not to make typing errors, accountants not to make
accounting errors and CEOs are expected not to make strategic
errors.
3. Total quality recognizes each person is involved for the
quality of the individual work and for
the quality of the team work.
Total means that everyone in organisation is involved in the
final product or service to the
customer.
Quality does not just mean luxury. The original definition was,
quality means conformance to
requirements.
Todays marketplace is now demanding that we go beyond this
definition. A powerful definition
of quality to meet these perceptions is quality means delighting
the customer by continually
meeting and improving upon agreed requirements.
Management recognises that TQM will not happen by accident. TQM
is a managed process
which involves people, systems and supporting tools and
techniques.
TQM is therefore a change agent which is aimed at providing a
customer-driven organisation.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 13
TQM (Total quality management)
hy that involves everyone in an organization in a continual
effort to improve
quality and achieve customer satisfaction
improvement or kaizen) and other is goal is customer
satisfaction which involves meeting or
exceeding customer expectations
8 essentials of TQM
Evolution of TQM
In early 1990s F W Taylor the father of Scientific Management
brought the concept of product inspection .
In 1924 W Shewhart introduced statistical control charts to
monitor production.
After the World War II a dramatic increase caused W Edwards
Deming introduced (SQC) methods to Japanese manufacturing.
Joseph Juran formulated his cost of quality concept emphasizing
accurate and complete identification and measurement of costs of
quality.
In 1950s, Armand Fiegenbaum proposed quality control on the
product design and incoming raw material.
In 1960s, Philip Crosby coined the concept of Zero defects.
During 1970s there was a dramatic shift from reactive to
proactive approach to quality, this in turn giving importance to
customer satisfaction with a drive of team work.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 14
The US government ,safety regulations, product recall mandated
by consumer product safety commissions changed the society attitude
from let the buyer beware to let the producer beware.
Demings contribution to Japanese industry
(3 decades earlier) made the US companies seek his help and
experience. As a result Ford Motor ,General Motors and Procter and
Gamble to take up revolution.
In 1985 ,NASA announced an excellence Award for quality and
productivity.
The Malcolm Baldrige National Award was established in 1987.
In Japan, during the II World War the economy was completely
disrupted.
In 1950 Dr Edward Deming ,introduced the SQC approach in
Japan.
Dr K Ishikawa of Tokyo University gave his contributions.
As a result the rate of economic growth increased to 9 to 10
percent per year and the national product doubled in 7 to 8 years
.
From 1950 to 1970 ,in the course of 20 years the per capita
income has increased roughly by 4 times.
Walter Shewart ,the father of stastistical quality control,
initiated the SQC movement during 1947 48.
Dr Edward Deming also visited India in early 1950s
In 1982 due to the quality trigger in US the concept of quality
circles came into introduction in the public sector units like
,Bharat electronics and Bharat Heavy
Electricals.
QCFI Quality Circle Forum in India came into existence.
Prof. Ishikawa was invited to by CII confederation of Indian
industries.
The year 1987 brought the ISO 9000 .
CII organized training course for ISO 9000 in 1989.
Companies practice TQM though Quality circles, Suggestion
schemes, kaizen and JIT
Basic principles of TQM
Customer focused approach to all activities and processes in the
organization should be directed towards winning customer
satisfaction.
Strategic planning and leadership :leadership should lead to
strong customer orientation in the organization and be willing to
make long-term commitments to its customers,
employees, vendors, stockholders and to society.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 15
Restructuring of vertical processes to cross functional
horizontal processes to change the work culture to teamwork and
making everyone in the process responsible for the
quality.
Creating a culture of working through internal customer system,
where each stage in the processes and each person in the process
can be linked as customers to each other.
Continuous improvement of all processes and activities ,leading
to total customer satisfaction and competitive advantage.
Training and development of people : it is the people who drive
the processes under TQM system. Therefore people should be trained
and developed for understanding the
process of TQM,
Empowerment and teamwork of people : team approach to work and
cross functional process management is an important aspect of TQM
work culture.
TQM V/S TRADITIONAL MANAGEMENT
TQM
Customer delight focused with respect to activities/processes.
Customer satisfaction through continuous improvement. It is a
proactive measure. TQM aims at superior performance Customer
delight and benchmarking are the focus. It is a self-driven and
self-imposed culture. Aims to satisfy all the stakeholders.
TRADITIONAL MANAGEMENT
Product/service focused. Short term satisfaction. It is often a
corrective measure. It aims at quality conformance. State of
control is the focus. It is based on the QMS systems (ISO 9000).
Aims to satisfy customers essential needs.
ADVANTAGES OF TQM
Better product quality Productivity improvement Reduced quality
costs Increased market Increased profitability Reduced employee
grievances Effective teamwork Enhancement of job interest
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 16
Improvement in human relation and work area morale Participation
culture Customer satisfaction Enhanced problem solving Improved
corporate health Better image and goodwill.
**** End of Module ****
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 17
Module 2: Philosophical Framework to TQM Contribution of various
gurus of TQM,Deming-
Demings chain reaction, Demings principles, deadly sins, PDCA
cycle, Jurans Quality triology,
Jurans breakthrough sequence, Philips Crosby- Quality is free,
Taguchis Quality loss function,
Ishikawas contributions and Quality Circles.
OBJECTIVE
To Understand and appreciate the:
Philosophical Framework of TQM
Contributions of various gurus of TQM,Deming-Demings chain
reaction, Demings principles,
deadly sins, PDCA cycle,
Jurans Quality triology, Jurans breakthrough sequence,
Philips Crosby- Quality is free,
Taguchis Quality loss function,
Ishikawas contributions and Quality Circles.
PHILOSOPHICAL FRAMEWORK TO TQM
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 18
Gurus
Shewhart Deming Juran Fiegenbaum Ishikawa Crosby Taguchi
Principles and Practices
Leadership Customer satisfaction Employee involvement Supplier
partnership
Tools and techniques
Benchmarking Information technology Quality management systems
Environmental management system Quality by design Management tools
Statistical process control Quality engineering
CONTRIBUTION OF VARIOUS GURUS OF TQM
CONTRIBUTOR CONTRIBUTIONS
Deming 14 points, theory on special & common
causes of variation
Juran Quality is fitness for use, quality trilogy
,cost of quality
Feigenbaum Quality is a total field, customer defines
quality
Crosby Quality is free, zero defects
Ishikawa Cause and effect diagrams, quality circles
Taguchi Taguchi loss function
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 19
Figure 1 DEMING W EDWARDS
DEMING W EDWARDS
An associate of Shewhart, worked in Western electric company as
a statistician.
He was invited to Japan to led the quality movement.
He modified PDCA cycle of Shewhart to the Plan ,Do ,Study and
act.(PDSA).
He also advocated intensive use of Statistics and control charts
and focused on product improvement and service conformance by
reducing variations in the process.
He joined the US census bureau in the year 1939 and proved that
quality control methods could lower costs even in an exclusive
service organization.
Deming stressed on the importance of suppliers and customers for
the business development and improvement.
He believed that people do their best and it the system that
must change to improve quality.
This 14 points formed the basis for this advice to Japanese top
management.
The 14 points are applicable to every industry in product and
service sector
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 20
DR WALTER A SHEWHART
Worked in Western electric company and AT&T,USA.
He advocated Statistical quality
Control (SQC) and acceptable
Quality level (AQL).AQL is the foundation of today's SIX
SIGMA.
He is considered to be the father figure of SQC, who developed
control charts for quality assessment and improvements.
DrShewhart also developed the Plan,Do,Check,Act (PDCA) cycle for
continuous improvement, which is in use even today
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 21
JOSEPH M JURAN
Juran also joined Western electric company and developed
Statistical quality control
handbook.
JUSE invited him to Japan in 1954.
He identified fitness quality and popularized the same.
Jurans fitness of quality
1. Quality of design- through market research, product and
concept.
2. Quality of conformance through management, manpower and
technology.
3. Availability through reliability, maintainability an
logistics support.
4. Full service through promptness, competence and
integrity.
Jurans quality planning road map
1. Identify your customers
2. Determine their needs
3. Translate into your language.
4. Develop a product that can respond to the needs.
5. Develop processes which are able to produce those product
features.
6. Prove that the processes can produce the product.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 22
7. Transfer the result in plans to the operating forces
PHILIP B CROSBY
Crosby was vice President of international telephone and
telegraph(ITT).
He four absolutes of quality are very relevant to TQM.
Four absolutes of quality
1. Quality is conformance to requirements, nothing more or
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 and not something close
to it.
4. The measurement of quality is the price of nonconformance
,ie, how much the defects in
design, manufacture, installation and service cost the
company.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 23
ARMAND V FEIGENBAUM
He was the president of American Society of Quality control.
He said Quality is in its essence way of managing the
organization.
Feigenbaums cycle time reduction methodology
1. Define process
2. List all the activities.
3. Flowchart the process.
4. List the elapsed time for each activity.
5. Identify non value adding tasks.
6. Eminent all possible non value adding tasks.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 24
KAORU ISHIKAWA
A quality guru from Japan.
He advocated the use of cause and effects diagrams to provide a
true representation of the organizational impacts and
producers.
He developed fishbone or Ishikawa diagram for cause and effect
analysis.
DEMINGS CHAIN REACTION
The theory states that improvements in quality leads to lower
costs because they result in less rework, fewer delays ,and better
use of time and materials.
Lower costs ,in turn, lead to productivity improvements.
With better quality and lower prices, a firm can achieve a
higher market share and thus stay in business, providing more and
more jobs.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 25
DEMINGS 14 PRINCIPLES
1) Create constancy of purpose for improvement of product and
service. importance of
stability in jobs ,long term plans as investment in innovation,
training, R&D.
2) Adopt the new philosophy for economic stability. Customer
driven approach as zero
defects,JIT.
3) Cease dependence on mass inspection to achieve quality.
results in
bottleneck ,increases cost, measures only causes ,divides the
responsibility between
production and quality people. Use appropriate tools to create a
balance between quality
and production
4) End the practice of awarding business on price tag alone.
Instead, minimize total cost -
move towards a single supplier for any item, on trust.
5) Improve Constantly and forever the system of production and
service. Enterprise
systems and services must keep growing in order to catch up with
the competitive
market.
6) Institute modern methods of training on the job.
7) Adopt and Institute modern methods of supervision and
leadership.
8) Drive out fear : Change and survive.
9) Break down barriers between departments and staff . The
workers in design, sales, and
production must work together to face problems and resolve them.
open communication
,sharing knowledge.
10) Eliminate the use of slogans and posters . Slogans do it
right the first time;; concentrate on the root cause.
11) Eliminate work standards and numerical quotas. This focuses
on quantity rather than
quality of product. Ex Targets
12) Remove barriers that hinder the hourly worker. Eliminate
Monotonous tasks, Abolish
annual or merit rating.
13) Institute a vigorous program of education and training. A
person must grow after
joining a company, and letting them learn new technology and
techniques will increase
employee longevity.
14) Create a situation in top management that will push every
day on the above
points. Just like products and services, every employee in a
company must work to
accomplish the transformation.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 26
DEMINGS DEADLY SINS
1. Lack of constancy of purpose; short term focus
2. Emphasis on short term profits; cost cutting to meet the
quarterly dividend pay.
3. Over reliance on performance appraisals; self-centered NO
mutual teamwork.
4. Mobility of management (job hopping); long-term plans are not
effective
5. Overemphasis on visible figures; targets cannot give customer
satisfaction.
6. Excessive medical costs for employee health care; absenteeism
and health care costs
7. Excessive costs of warranty and legal costs ;
DEMING WHEEL/CYCLE(P-D-C-A)
The PDCA cycle is also known as a problem solving process
Plan
A plan can be to initiate a new process or improve an existing
one it should be based upon customer needs, and resolve to more
effectively fulfill the organizations mission
Do
Carry out the process /activities as per the plan Check
Review the gathered data to determine if the planned and
implemented change has created the quality improvement intended
Act
Take action, either to implement the change or change variables
to see if the process can be made more effective, or
Standardize the new, successful process.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 27
DEMINGS TRIANGLE
DEMINGS THEORY OF VARIANCE
The basic assumption of this theory is variation from the
standard activity as a major
source of problems for all process.
Variance increases uncertainty and reduces control over the
processes.
TQM assigns managers the task of finding the source of their
variance and eliminating it
so that the process can be improved.
All the variance can be categorized into two :
Controlled variance and uncontrolled variance.
1 Controlled variance is a variation from standard process that
a worker can correct/manage.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 28
2 Uncontrolled variance is a variation from the standard process
due to the impact of some
factor outside the limits of the employee.
Variances can be corrected by workers or managers by changing
its common
causes/special causes.
Common causes are as follows
Weakness in the product design
Equipment malfunctions
Poor maintenance of machineries
Incomplete/inaccurate documents maintenance.
Special causes are short term variations in an operating process
as follows
Lack of knowledge/skill and competency Worker negligence
JURAN- QUALITY TRILOGY
Quality trilogy includes the following sequence of events:
1 Quality planning
2 Quality control
3 Quality improvement
Quality planning
1 Identify the customer both the external and internal.
2 Determine the customer needs
3 Develop product features that respond needs.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 29
4 Establish quality goals that meet the needs of customers and
suppliers.
5 Develop a process that can produce the needed product
6 Prove the process capability.
Quality Control
1. Choose control subjects.
2. Choose the units of measurement.
3. Establish the measurement
4. Establish the standards of performance
5. Measure actual performance 6. Interpret the difference
between the actual and the standard. 7. Take action on the
difference
Quality improvement
1. Prove the need for improvement
2. Identify the specific projects for improvements.
3. Organize to guide the projects.
4. Organize for diagnosis for discovery of causes
5. Find the causes
6. Provide remedies
7. Prove that the remedies are effective under operating
conditions.
8. Provide control mechanisms.
JURANS BREAKTHROUGH SEQUENCE
Juransbreakthrough sequence identifies a set of actions directed
towards achieving major
leaps in quality.
The following are the steps
Step 1 :proof of need.
Identifies some fault in the current process that requires an
immediate change.it
identifiescosts of not changing that exceed the costs of
change.
Step 2 : project identification
Identifies specific project to bring about improvements which
acts as a catalyst.
Step 3: organizing for improvements.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 30
Organizes for successful completion of the selected projects.
TOP MANAGEMENT
COMMITTEE resources ;task forces
Step 4 : diagnostic journey
Traces the root cause from the symptoms (systematic causes,
random causes, wilful
causes)
Step 5 : Remedial action
The project team identifies a set of alternatives and select the
appropriate one .it further
includes implementation and introducing inspection and
testing
Step 6 :Resistance to change
Fear of unknown techniques, fear of excel in new environment
create resistance among
the employees. Formulate actions to overcome fear.
Step 7 : Holding on to gains
Freeze the new methods and techniques to prevent any return back
to old methodology.
PHILIP B. CROSBY
4 Absolutes of Quality Management:
Quality is defined as conformance to requirements , not
goodness
The system for achieving quality is prevention, not
appraisal
The performance standard is zero defects, not that is close
enough
The measurement of quality is the price of non-conformance, not
indexes
Crosbys 6 Cs
Comprehension (understanding)
Commitment (by all)
Competence (Attitude, skill and knowledge)
Correction (Elimination of errors)
Communication (Support of all people, customers and
suppliers)
Continuance (improvement)
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 31
CROSBYS QUALITY VACCINE (CROSBYS TRIANGLE)
Integrity, Policies
Integrity represents an honest attempt by the management to
eliminate bureaucracy, improve
performance and satisfy customers.
Systems and operations
Focus on designing new systems and operations to maintain the
firms new quality environment.
Communication
Refers to the flow of information ( internal&external) both
between the functional
departments ,firm ,suppliers and customers. The vaccine requires
regular exchange of
information about
quality problems ,
performance on quality characteristics,
progress towards quality goals and
opportunities for improvement
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 32
CROSBY QUALITY IS FREE
Crosby's prescription for quality improvement was a 14 step
program.
His belief was that a company that established a quality program
will see savings more
than pay off the cost of the quality program ("quality is
free").
Crosbys 14 Steps for quality improvement
1. Management commitment
2. Quality improvement team
3. Quality measurement
4. Cost of quality
5. Quality awareness
6. Corrective action
7. Zero Defects program
8. Supervisor training
9. Zero defects day
10. Goal setting
11. Error cause removal
12. Recognition
13. Quality councils
14. Do it all over again
TAGUCHIS QUALITY LOSS FUNCTION Taguchis asserts the quality of a
product is a function of key product characteristics
(performance characteristics ).
The ideal value is its target value.
Taguchis Quality loss function estimates loss to society from
the failure of a product to
meet its target value for a particular performance
characteristic.
A high quality product assures target values consistently
throughout its life span under
all operating conditions
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 33
This loss can be incurred by the
1 Consumers (short product life, repair costs),
2 Company (increased scrap, rework and warranty costs) and
2 Society ( pollution , safety)
Quality loss function is expressed as
L=C (X-T)2
Where L = Total Loss
C= a constant
X= actual average value of quality
characteristics and
T= target value of quality characteristic
ISHIKAWA AND QUALITY CIRCLES.
Dr Ishikawa was instrumental to formulate
1 The concept of CWCQ (companywide quality control)
2 The audit process for selection a company to Deming award.
3 Teambased problem solving
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 34
4 Quality circles.
5 Cause and effect charts or fish bone diagrams
6 Bottom up view of quality
QUALITY CIRCLE
A quality circle or quality control circle (Q.C Circle) is a
small group of employees 8 to
10 (average number of nine) who volunteer to meet regularly with
a facilitator to solve
work related problems in their work area. The group with their
leader usually meetonce
a week after their working hours.
Purpose:
To undertake work related projects designed to improve working
conditions, enhance
mutual self developmentand to advance the company, all by using
quality control
concepts.
HOW QC CIRCLE WORKS
Formation of QC circle
Registration of QC circle
Improvement of activities
QC circle grand meeting of each division
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 35
QC circle grand meeting of plant
Companywide QC circle grand meeting
Improvement of activities
Selection of the problem
Study the problem
Planning for improvement
Execution of the improvement
Confirmation of effect
Conclusion
Presentation
Characteristics of Quality circles.
Small group of employees : 8 to 10
Members are from the same work area or doing similar type of
work
Membership of the quality circle is voluntary
Members meet regularly for about an hour every week
Members meet to identify, analyze and resolve work(quality)
related problems.
Members resolve work related problems leading to
improvement.
Quality circles enrich the work life of the employees.
Benefits of Quality Circles
Tangible benefits
Better quality
Improved productivity
Higher safety(reduced number of accidents)
Greater cost effectiveness
Better housekeeping
Increased profitability
Waste reduction
Reduced absenteeism
Reduced grievances.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 36
Intangible benefits
Enriched quality of work life.
Attitudinal changes
Harmony ,mutual trust
Effective team working
Participative culture
Human resource development
Promotion of job knowledge
Greater sense of belonging.
**** End of Module****
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 37
Module 3 Benchmarking Definition, reasons for benchmarking,
types of benchmarking, process of
benchmarking what to benchmark, understanding current
performance, planning, studying
others, using findings, Xerox model of Benchmarking, Advantages
and pitfalls of benchmarking
Concept of Kaizen and its applications
OBJECTIVE
To understand the meaning of Benchmarking
To identify the various reasons for benchmarking,
To list the types of benchmarking,
To explore the process of benchmarking
To know what to benchmark,
To understand current performance, planning, studying others,
using findings,
To appreciate Xerox model of benchmarking,
To realize the advantages and pitfalls of benchmarking
To recognize the Concept of Kaizen and its applications
BENCHMARKING DEFINITION
Benchmarking is the process of continually searching for the
best methods, practices
and processes, and adapting their good features and implementing
them to become the
best of the best.
It is defined as measuring our performance against that of
best-in-class companies,
determining how the best-in-class achieve those performance
levels and using the
information as a basis for our own company's targets, strategies
and implementation
EG: Microsoft, FMCG-HLL, Toyota, Ford
REASONS FOR BENCHMARKING
It acts as a tool to achieve business and competitive
objectives.
It is a powerful and effective tool to take up right decisions
and align with the
organizational strategies.
It helps organizations to take right decisions in choosing the
appropriate markets.
It guides the organization to determine the strengths they need
to gain competitive
advantage.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 38
Benchmarking helps organization to develop strengths and reduce
weakness.
Benchmarking helps organization to set goals based on the
external environment.
TYPES OF BENCHMARKING
Performance or operational benchmarking
Process or functional benchmarking
Strategic benchmarking
Performance or operational benchmarking
Involves pricing, technical quality, features and other
performance characteristics of products
and services
It also involves comparing competitors products, process and
analyzing them
Process or functional benchmarking
Analyses work processes such as billing, order entry or employee
training, manufacturing,
work /job design, techniques, procedure/process, sequence of
operations.
This identifies the most effective best practices in companies
that perform similar functions
Eg: Best practices of L.L.Beancompany was adopted by Xerox which
reduced the cycle time
by 50 %
Strategic benchmarking
Examines the winning strategies of other companies and to
construct a key success factor(KSF)
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 39
BENCHMARKING PROCESS
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 40
1 Getting started
Planning (work technique)
Organizing and ( funds, technical team, technology vendor,
training team, top management)
Managing for benchmarking (adopting changes and adjustments)
2 Preparing to benchmark
Identify key processes which processes is to improved
Form team core workmen
Understand your own process KRA s strength /weakness
3 Conducting research
Collect information who is best and what is best org; brand
image, market position,
competitive secret, competitors ,
4 Selecting whom to benchmark
Establish relationship
Plan to collect and share information
5 Collecting and sharing information
Surveys
Site visits
Determine any third parties( to collect the data)
6 Analyzing adapting and improving
Compare data
Plan to surpass
Implement and monitor
improve
Performance Measure Examples
Accounting
Percentage of Late Payments
Time to Respond to Customer Requests
Number of Billing Errors
Number of Payroll Errors
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 41
Information Services
Number of Errors / Code Line
Percent of Reports Received on Schedule
Number of Rewrites
Number of Errors Found After
Marketing
Accuracy of Forecast
Number of Incorrect Order Entries
Overstocked Supplies
Contact Errors
Purchasing
Purchase Order Errors
Downtime Due to Shortages
Excess Inventory
Cycle Time (from start of purchase to receipt in-house)
Product Engineering
Project Completion Cycle Times
Engineering Changes/ Document
Number of Errors Found During Design Review
Number of Errors Found in Design Evaluation
Quality Control
Percentage of Lots Rejected in Error
Number of Engineering Changes Detected After Design Review
Errors in Reports
Cycle Time for Corrective Action
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 42
XEROX 12-STEP BENCHMARKING PROCESS
Phase 1: Planning
1. Identify what to benchmark;
2. Identify comparative companies;
3. Determine data collection method & collect data.
Phase 2: Analysis
4. Determine current performance gap;
5. Project future performance levels.
Phase 3: Integration
6. Communicate finding and gain acceptance;
7. Establish functional goals.
Phase 4: Action
8. Develop action plans;
9. Implement specific actions & monitor progress;
10. Recalibrate benchmarks.
Phase 5: Maturity
11. Attain leadership position ;
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 43
12. Fully integrate practices into processes.
ADVANTAGES OF BENCHMARKING
It promotes a thorough understanding of company's processes,
strength & weaknesses is well
understood.
2. Saves time and money as known practices are adopted as adopts
the practices followed by
superiors competitors rather than invention
3. Identifies non-value added activities and plans for process
improvement
4. Enables comparison of performance measures in different
dimensions, like Return on assets,
cycle time, delivery time and etc..
5. It focuses on processes and not on products, it is not
restricted to a company boundary
6. It allows organizations to set realistic ,new performance
targets to do things in a better way
7. It defines specific gaps in performance and to select that
process for improvement, and
redesigning the process
8. It provides a basis for training human resources
9.Brings in new changes and ideas.
10.It is a ongoing system.
11. It helps to set goals with reference to external
perspective.
LIMITATIONS OF BENCHMARKING
it focus on the process not the situation.
It creates arrogance against competitors.
Best practices is not static , but a moving target.
Benchmarking is not a panacea (solution) that can replace all
other quality efforts
Benchmarking is not a instant pudding. It will not the improve
performance , if top
management is not providing all the resources and not adopting
quality culture
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 44
KAIZEN AND ITS APPLICATIONS
Kaizen is a Japanese word for improvement, change for the
better, or continuous
improvement.
the concept of Kaizen has evolved since the 1950s into a
business strategy of making
small, but continuous changes for the better in company
operations.
These changes can range from manufacturing steps to
productivity, inventory or quality
control matters.
Kaizen involves every employee and strongly encourages
suggestions for improvements
5S Kaizen Principles
Seiri means to straighten up
Seitonmeans putting things in order
Seisomeans to clean up
Seiketsumeans personal cleanliness
Shitsukemeans discipline.
Seiri means to straighten up /sort /clear out
Differentiate between the necessary and unnecessary and discard
the unnecessary
It includes
Work in process
Unnecessary tools
Unused machinery
Defective products.
Papers and documents
Seitonmeans putting things in order/Set Things in Order
Keep the things in order so that they are ready to use when
required.
This avoids waste of time due to searching for things like
tools, parts, components.
everything should be at its place and there should be place for
everything
Seisomeans to clean up /clean and shine
keep the work place clean
Every individual should clean the workplace every day before
starting the days work
and also at the time of closing the work
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 45
Seiketsumeans personal cleanliness/Standardize
Having good housekeeping practices by personal attention to
personal cleanliness
Shitsukemeans discipline.
Every worker and manager has to follow procedures in the work
place with discipline.
**** End of Module3****
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 46
Module 4 Business Process Re-engineering (BPR) Introduction,
Need for BPR, Implementing BPR, Steps
in BPR, Re-engineering vs. TQM, BPR Vs. Kaizen, Re-engineering
the structure, change
management and BPR, BPR and IT, Advantages and Limitations,
Indian examples of BPR
OBJECTIVE
To understand the meaning of Business Process Re-engineering
(BPR) & Introduction,
To realize the Need for BPR,
To explore the process of BPR Implementation & Steps in
BPR,
To differentiate between Re-engineering vs. TQM,
To distinguish between BPR Vs. Kaizen,
To appreciate the need for Re-engineering the structure, change
management and BPR,
To understand the relation among BPR and IT,
To recognize the advantages and Limitations of BPR,
To discuss Indian examples of BPR
INTRODUCTION TO BPR Customer satisfaction has increasingly
become the cardinal principle governing any successful
business
Despite emphasis on customer satisfaction, there has been
complaints and disappointment , the
reasons for this lies in the process and systems
In many cases, present systems can no longer be fixed and
improvements are not sufficient
Hence reengineering of the entire system is needed.
Michael Hammer of the US coined the term re-engineering .
the fundamental rethinking and radical design of business
processes to achieve dramatic
improvements in critical contemporary measures of performance
such as cost, quality, service and
speed
It is also known as process reengineering or business process
re-engineering
It involves asking basic questions about business processes why
do we do it? Why it is done in
this way?
Radical redesigning involves tossing out existing procedures and
reinventing the process.
The goal is to achieve quantum leaps in performance
Principles of BPR
Rule 1: Organise around outcomes, not tasks
Rule 2: Have those who use the output of the process perform the
process (work should be
carried where it is)
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 47
Rule 3: Merge information processing work into real work that
produces the information
Rule 4: Treat geographically dispersed resources as though they
work centralized
Rule 5: Link parallel activities instead of integrating their
results
Rule 6: Put the decision point where the work is performed and
build control into the process
Rule 7: Capture information once-at the source
NEED FOR BPR
Develop business vision and process objectives
Identify processes to be redesigned
Understand and measure existing processes
Identify information technology levels
Design and build a prototype of the process
THE IMPLEMENTATION OF BUSINESS PROCESS REENGINEERING
As more organizations undertake business process reengineering
(BPR), issues in implementing
BPR projects become a major concern. This field research seeks
empirically to explore the
problems of implementing reengineering projects and how the
severity of these problems relates
to BPR project success. Based on past theories and research
related to the implementation of
organizational change as well as field experience of
reengineering experts, a comprehensive list
of sixty-four BPR implementation problems was identified. The
severity of each problem was
then rated by those who have participated in reengineering in
105 organizations. Analysis of the
results clearly demonstrate the central importance of change
management in BPR
implementation success. Resolutions of problems in other areas
as technological competence and
project planning were also determined to be necessary, but not
sufficient, conditions for
reengineering success. Further, problems that are more directly
related to the conduct of a project
such as process delineation, project management, and tactical
planning were perceived as less
difficult, yet highly related to project success. This situation
was also true for human resource
problems such as training personnel for the redesigned process.
These findings suggest that
reengineering project implementation is complex, involving many
factors. To succeed, it is
essential that change are more contextual (e.g., management
support and technological
competence) as well as factors that pertain directly to the
conduct of the project (e.g., project
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 48
management and process delineation). As one of the first pieces
of empirical evidence based on a
field study, this research emphasizes the importance of
addressing BPR implementation within
the broader context of organizational change in a complex
sociotechnical environment.
IMPLEMENTING BPR, STEPS IN BPR
Step 1: Formulate / Modify business visions, policies,
objectives
Step 2: Formulate / Modify business strategies according to
changing customer requirements,
technology changes and competition
Step 3: Analyze the existing business process cycles &
workflows and determine how they may
be modified or refined
Step 4: Apply IT to setup an optimal Business Information
Management Architecture (BIMA) to
support the reengineered business process
Step 5: Modify or redesign the existing processes according to
the reengineering strategies and
develop refined Business Process Automation Systems (BPAS)
Step 6: Apply IT strategies to map BIMA onto an Enterprise
Information Management System
(EIMS) that is integrated across the enterprise and that fits
into and supports the reengineered
Business process cycles and workflows.
Step 7: Integrate the EIMS with the BPAS to build up the
completed reengineered business
system
Understanding
the process
Stream-
lining
Continuous
improvements
Measurement
& controls
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 49
Step 8: Repeat steps 1-7 for continuous BPR due to changing
customer demands, technology
changes and business strategies, which leads to business
stability
Reengineering in a service industry
Make the customer the starting point for change
Design work processes in light of organizational goals
Restructure to support frontline performance
3 Rs of reengineering Rethink: this phase requires examining the
organizations current objectives and underlying assumptions to
determine how well they incorporate the renewed commitment to
customer
satisfaction
Redesign: This phase requires an analysis of the way the
organization produces the products or services it sells-how jobs
are structured, who accomplishes what tasks and the results of
each
procedure. Which element to be redesigned is determined to make
the customer satisfied.
Retool: This phase requires a thorough evaluation of the current
use of advanced technologies, especially electronic data processing
systems, to identify opportunities for
change that can improve quality of services and customer
satisfaction
RE-ENGINEERING VS. TQM
It is very important to understand that Reengineering is not a
separate discipline. It is, in fact, a
subset of TQM. The essential difference between (Business
Process) Reengineering and TQM is
that reengineering aims at quantum gains on the order of 30 to
50 percent or more, whereas Total
Quality Management programs stress incremental progress,
striving for inch-by-inch gains again
and again.
The two approaches to improve performance are not mutually
exclusive; it makes sense to use
them in tandem. Reengineering can be used to first produce good
basic design that dramatically
improves a business process. Total quality programs can be used
to work out bugs, perfect the
processes, and gradually improve both efficient and
effectiveness.
Such two-pronged approach to implementing organizational and
strategic change is like a
marathon race where you run fast four laps as fast as you can,
then gradually pick up speed the
remainder of the way.
Both TQM and BPR are customer-oriented. They both aim on
improving the customer
satisfaction. Also, they both suggest thinking outside in. On
the other words, they both suggest to
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 50
think from the customer's viewpoint. Also, both TQM and BPR are
process-oriented. They both
target to alter the processes, but not just on the product.
Moreover, they both take team approach.
Nearly all BPR projects are initiated by top-down approach.
Since BPR would results great
changes, staff resistance is obvious. Therefore, top
management's support and commitment are
very important. For TQM, both top-down approach and bottom-up
approach are possible.
The basic assumptions of TQM and BPR are different. TQM assumes
that the existing practices
or systems are principally right and useful. The target of TQM
is to improve on the basis of the
existing system. However, BPR takes an opposite assumption. BPR
assumes the existing system
is useless and suggests starting it over. Unlike TQM that aims
on smoothly and incremental
improvements, BPR aims on dramatic results.
TQM emphasis on total involvement, including all the
stakeholders. The involvement even
extends to suppliers and customers. Also, TQM also suggests
involving all the processes in the
company, including human resources management, order fulfilling,
manufacturing, marketing
and customer management and others. However, for BPR, the
project can be controlled to a
specified area only.
Standardization is one of the key points of TQM. TQM aims on
standardize the practices, thus
achieving a consistent performance. It also makes that there is
a certain degree of documentation
for TQM. However, BPR emphasis on flexibility and believes that
standardization would
increase the complexity of the process. Therefore,
standardization is rare in BPR and the level of
documentation is much lower.
TQM emphasis on the use of statistical process control. However,
there is no similar concern for
BPR. On the other hand, BPR emphasis more on the enabling role
of information technology.
TQM is a cultural issue. Once the culture is built, TQM is
absorbed in the daily operation.
However, BPR is a project. It is with a clear target that should
be achieved as soon as possible.
In fact, BPR is a risky project that is suitable for
organizations in deep trouble or facing great
challenges. However, an organization cannot always be under BPR.
TQM, on the other hand, can
be treated as a consolidation approach for the organizations to
maintain continuously
improvements.
BPR VS. KAIZEN
BPR assumes lack of processes as the basis of change that might
not be true in all cases.
Kaizen accepts current state of processes and works towards
gradual improvement.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 51
BPR starts the process of improvement from a clean slate, i.e.
totally ignore current status
as opposed to kaizen.
BPR is hard to implement, technology oriented and requires and
considerable change
management ,opposed to kaizen which is simpler, people oriented
and long term oriented.
RE-ENGINEERING THE STRUCTURE
Restructuring the firm consists of altering its decision-making,
operating divisions, and
management culture. Reengineering entails changing the
procedures by which the work is
accomplished and products delivered.
Process restructuring, as championed by Michael Hammer and James
Champy in their
Reengineering the Corporatio, can deliver costs reductions of 50
percent or more. Corporate
restructuring, as portrayed by John Womack and colleagues in The
Machine that Changed the
World, also suggest a law of halves. Womack and his colleagues
studied the Japanese
automobile industry, and their research revealed that Toyota and
other makers by applying the
principles of teamwork, quality control, customer focus, minimal
buffers and continuous
improvement had cut product defects by half, factory space by
half, work-time by half, and
development time by half.
While diversification had been a hallmark of good management
during the 1960s, shedding
unrelated business had become the measure during the 1980s and
1990s. De-diversification,
back to basics, and a return to core competencies emerged as
restructuring drivers for good
reason. More focused firms, as Robert Hoskisson and Michael Hitt
show in Downscoping,
display superior performance.
Restructuring actions taken in single areas tend to achieve few
enduring gains. Downsizing the
workforce generates short-term cost savings, but in the absence
of a broader reorganization, it
brings only temporary relief. Reengineering business process
creates immediate gains, but the
gains are short-lived without changes in performance measures,
compensation incentives,
information technologies, employee skills, and organizational
structure. Restructuring and
reengineering, then, should be seen as a multi-faceted revamping
of the corporation.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 52
Company restructuring has both worsened and improved the lot of
those who work there. Lean
redesigns, cost reductions, and repeated downsizings have
terminated careers and decimated
communities. At the same time, reengineering, flexible work, and
streamlined hierarchies have
improved employee productivity and product quality. The process
of restructuring frequently
brings long work weeks and high stress levels, but the product
of restructuring also often results
in greater autonomy and more challenging work. One study of
restructuring experience revealed
heightened loads, diminished morale, and reduced employee
commitment, but it also found
enhanced quality, customer service, risk taking, workforce
competence, and productivity.
The dual impact of corporate restructuring on those who
experience and manage it accounts for
some of the schizophrenia toward restructuring. Work
environments can be filled with high
anxiety and low morale. At the same time, however, the quality
of work life often improves,
with more variety, responsibility, and teamwork. Executives
experience stress as they manage
the transformation, but in doing so they are also laying a
framework for improved company
performance, richer compensation packages, and enhanced
shareholder return.
CHANGE MANAGEMENT AND BPR
BPR is all about the process. Change Management is all about the
people.
In a BPR context, unless you've completely automated the process
then you won't get 100% of
your ROI until 100% of the people involved have internalized the
new process! One of the key
reasons that many Hammer and Champy style BPR initiatives failed
miserably was that their
total focus was on the Q component, to the exclusion of the A
component. Alas, for most
business initiatives you don't get dollar one of ROI until
somebody's behavior changes. I
won't repeat the most excellent rant extended polemic of the
previous post, but there's more
discussion of the topic there if you're interested.
All of these three terms relate to change, but to different
levels and types of change. The problem
with the fuzzy definitions is that it leads to people applying
the wrong practice to their business
challenge. Its like someone saying, We need to dig a tunnel from
England to France; let me get
my Black & Decker rechargeable drill. Or equally bad, We
need to place a screw in the living
room wall to hang a mirror; hold on while I get the
dynamite.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 53
Change Management, Process Reengineering and Corporate
Transformation are clearly diffent.
They are distinct processes, require special capabilities, and
are applied in different ways.
Change Management is geared towards communications and training
on some specific shift in
the use of an information system or process.
Business Process Reengineering (BPR) relates to taking an entire
end-to-end business process,
like billing and collecation or sales as examples, breaking it
down to component steps,
realignigng the steps to be more efficient and effective, and
implmenting the new process. The
implementation of BPR projects typically entail major systems
changes and significant changes
to the organization and how business is conducted.
Corproate Transformation is more focused on changing the
business overall. A transformation
effort is centered on clarifying the corporate strategy and
putting a process and discipline in
place to drive strategy execution, alignment of the orgnaization
and disciplined follow through
for performance.
The most common mistake we see in selecting the right tool for
change is underestimating the
level of change that is being called up. What may seem to
management as a minor tweak in
business process is often received by sales and operations as a
major shift that is disruptive to the
daily operations and requires much more preparation and
considerations to accomplish. My
ChangeThis artice titled, People Dont Hate Change, They Hate How
Youre Trying to Change
Them became one of the fastest downloaded pieces on their site.
The team at ChangeThis said
that they knew that trying to get corporate change right was one
of the biggest frustrations people
have and so this was no surprise to them.
BPR AND IT
IT has penetrated the office and services environment since the
1978.The shift from mainframe
to PC based technology is breaking down communication barriers
between employees and
customers. Now managers and employees from various departments
are designing and
controlling complex business information systems. IT
capabilities involve improving information
access and coordination across organizational units. It is so
powerful that it can actually create
new process design options, rather than simply support it. In
his book, Business the Speed of
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 54
Thought, Bill Gates argues that if the 1980s were about quality
and the 1990s were about
reengineering, then the 2000s will be about velocity. Gates
advocates complete digitalization of
all aspects of life. He argues that to be successful in the
digital age, companies need to develop a
new digital infrastructure similar to the Human nervous system.
This new digital system enables
companies to run smoothly and efficiently, makes them respond
quickly to emergencies and
opportunities, provides a mean for quickly getting valuable
information to the people in the
company who need it. This in turn empowers employees to make
decisions and interact with
customers .What is the Relation between BPR & Information
Technology? Hammer considers IT
as the key enabler of BPR . Davenport & Short argue that BPR
requires taking a broader view of
both IT and business activity, and of the relationships between
them. IT capabilities should
support business processes, and business processes should be in
terms of the capabilities IT can
provide. They believe IT's promise and its ultimate impact is to
be the most powerful tool for
reducing the costs of coordination .It has been argued that
innovative uses of IT would inevitably
lead many firms to develop new, coordination -intensive
structures, enabling them to coordinate
their activities in ways that were not possible before. Such
coordination -intensive structures may
lead to strategic advantages.
IT Roles in Initiating and Sustaining Reengineering
Before the Process Design
During the Process Design
During the Implementation
Create infrastructures and
manage information that
support evolving organization
Bring vast amounts of
information into the process
Create a digital feedback
loop
Foster process thinking in
organizations
Bring complex
analytical
methods to bear on the process
Establish resources for
critical evaluation of the
reengineered process
Identify and select process for
redesign
Enhance employees ability to make more informed decisions
with less reliance on formal
vertical information flows
Improve IT processes to
meet increasing needs of
those divisions that have gone
under reengineering
processes
Participate in predicting the Identify enablers for process
Institute a program of
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 55
nature of change and
anticipate the information
needs to support that change
design
cleanup and damage control in case of failure
Educate IT staff in non
- technical issues such as
marketing, customer
relationships, etc.
Capture the nature of proposed
change and match IT strategy to
that change
Communicate ongoing results
of the BPR effort
Participate in designing
measures of success/ failures
of reengineering
Capture and disseminate
knowledge and expertise to
improve the process
Help to build commitment to
BPR
Communicate ongoing results of the BPR effort
Evaluate the potential
investment and return of
reengineering efforts
Transform unstructured processes into reutilized
transactions
Reduce/replace labor in a process
Define clear performance goals and objectives to drive the
implementation
Define the boundaries and scope of the process
ADVANTAGES OF BPR 1. Organization can achieve radical changes in
performance by cost , cycle time, service and quality
2. It boosts competitiveness in the operations through simpler,
leaner and more productive processes
3. Encourages organization to problem solving thinking
approach
4. It helps organizations to make noticeable changes in the
pace& quality to respond to customer
needs
5. An organization can be transformed from rule driven
organization to a marketing structured
organization to focus on customer
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 56
6. It helps to get better market share and profitability
7. Workers are encouraged to make suggestions and creates a TQM
culture
8. It helps in creating challenging and more rewarding jobs with
broader responsibilities
LIMITATIONS OF BPR 1. It is not a panacea, application of it
matters a lot.
2. It is not simple or easy to do. Hence companies do not invest
time and money on BPR
3. Corporate strategy support is needed
4. BPR cannot be realized without Information technology
5. Processes in functional areas must be improved
6. It requires teamwork from all the employees
Example of FORD company-BPR
FORD Company has employed 500 people in North America for
Accounts Department
The Staff were spending more time in resolving problems between
purchase orders, receiving documents and invoices
FORD reengineered the Accounts payable process, introducing a
system of online database for purchase orders and other documents
processing
This BPR brought a very good change in FORD company
Staff members were reduced by 75% and faster processing was
possible which saved time and cost
**** End of Module 4****
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 57
Module 5 Quality Management Systems(QMS) Introduction, meaning
of QMS, ISO 9000, Benefits of ISO,
ISO 9000-2008 series, implementation of ISO 9000,Problems
related to ISO 9000, QS 9000,
Need for QS 9000, QS 9000 series ,ENVIRONMENTAL MANAGEMENT
SYSTEM (EMS),
ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000
& 14000, SEI-CMM level 5.
OBJECTIVE
To understand the importance of Quality Management Systems (QMS)
Introduction, meaning of QMS,
ISO 9000,
Benefits of ISO, ISO 9000-2008 series,
Implementation of ISO 9000,
Problems related to ISO 9000,
QS 9000, Need for QS 9000, QS 9000 series
ENVIRONMENTAL MANAGEMENT SYSTEM (EMS), ISO 14000 series,
Benefits of ISO 14000,
Integrating ISO 9000 & 14000,
SEI-CMM level 5
QUALITY MANAGEMENT SYSTEMS(QMS) INTRODUCTION, MEANING OF QMS
A quality management system (QMS) is a collection of business
processes focused on
achieving your quality policy and quality objectives i.e. what
your customer wants and
needs.It is expressed as the organizational structure, policies,
procedures, processes and
resources needed to implement quality management. Early systems
emphasized predictable
outcomes of an industrial product production line, using simple
statistics and random sampling.
By the 20th century, labour inputs were typically the most
costly inputs in most industrialized
societies, so focus shifted to team cooperation and dynamics,
especially the early signaling of
problems via a continuous improvement cycle. In the 21st
century, QMS has tended to converge
with sustainability and transparency initiatives, as both
investor and customer satisfaction and
perceived quality is increasingly tied to these factors. Of all
QMS regimes, the ISO 9000 family
of standards is probably the most widely implemented worldwide -
the ISO 19011 audit regime
applies to both, and deals with quality and sustainability and
their integration.
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 58
ISO 9000
ISO 9001: 2000
A revolution occurred in 1947 in the management of quality
worldwide when ISO (Geneva,
Switzerland) bought out a set of standards pertaining to the
practice of quality assurance methods
within a company.
Termed as ISO 9000 standards, these standards proved their value
around the globe. Many
countries including India have adopted ISO.
ISO 9000 is not a mandatory system or it is not a government
regulation. However it is a very
important customer regulation. It provides assurance to a wide
variety of customers about an
organizations quality assurance methods and quality management
practices
5 objectives of ISO 9000
1. Achieve, maintain and seek to continuously improve product
quality including service
relationships
2. Improve the quality of operations to continuously meet
customers and stake holders stated and
implied needs
3. Provide confidence to internal management and other employees
that quality requirements are
being fulfilled and that improvement is taking place
4. Provide confidence to customers and other stake holders that
quality requirements are being
achieved in the delivered product
5. Provide confidence that quality system requirements are
fulfilled
Structure of ISO Quality standards ISO 9000
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 59
ISO 9001:2000 Model
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 60
ISO requirements 1. Management responsibility
2. Quality system
3. Contract review
4. Design control
5. Document and data control
6. Purchasing
7. Control of supplied products
8. Product identification and traceability
9. Process control
10. Inspection and testing
11. Control of inspection, measuring and test equipment
12. Inspection and test status
13. Control of nonperforming products
14. Corrective and preventive action
15. Handling, storage , packaging, preservation and delivery
16. Control of quality records
17. Internal quality audits
18. Training
19. Servicing
20. Statistical techniques
Quality Management System (QMS)- Principles of new standard for
ISO
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 61
Principles of new standard
-
Total Quality Management 12MBA42
Dept of MBA, SJBIT Page 62
Quality Manual
It is a document containing the quality policy, quality
objectives, structure chart, and description
of the quality system of an organization. A quality manual often
explains how the requirements
of a quality standard are to be met and identifies the person
responsible for quality management
functions.
BENEFITS OF ISO CERTIFICATION International competition and
customer demands
Market realities and perceptions
Internal Organisational Health
Advantages of ISO 9000 certification Marketing muscle: ISO
company offers a better product and service which gives the
marketing
strength to a company
Contractor selection : ISO certification helps in the Selection
of contractors in abroad which
otherwise becomes difficult to search for a contractor
Supplier : Selecting a new supplier can be time consuming and
costly. If a supplier is ISO
certified , it is easy to select t