Productivity and quality_mgmt_v2

ProductivityProductivity and and

Quality ManagementQuality Management

Question BankQuestion Bank What is TQM? State the objectives and What is TQM? State the objectives and

benefits of TQM (ppt 27,29)benefits of TQM (ppt 27,29) What are Quality management systems?What are Quality management systems? State eight building blocks of TQM (ppt28)State eight building blocks of TQM (ppt28) State 10 steps of TQM (ppt 26)State 10 steps of TQM (ppt 26) What is TPM and explain TPM awards (32-34)What is TPM and explain TPM awards (32-34) 14 points of Deming’s philosophy(chpt7 &39-14 points of Deming’s philosophy(chpt7 &39-

4040 14 points of Crosby’s philosophy (chpt 7 14 points of Crosby’s philosophy (chpt 7

&41,42)&41,42) Explain eight Principles of TQM (ppt17-25)Explain eight Principles of TQM (ppt17-25) What is Juran’s TriologyWhat is Juran’s Triology

Question BankQuestion Bank

What are Quality circles and how do What are Quality circles and how do they differ from Kaizen?they differ from Kaizen?

What are 5 ‘S’ practices? (ppt 30)What are 5 ‘S’ practices? (ppt 30)What is BPR? Why is it necessary to What is BPR? Why is it necessary to

initiate this before we start ISO 9000?initiate this before we start ISO 9000?What is COQ? How do we bring down What is COQ? How do we bring down

the COQ?the COQ?What is six sigma? (Ppt -10)What is six sigma? (Ppt -10)

Question BankQuestion BankExplain Malcolm Baldrige award Explain Malcolm Baldrige award

(ppt74,77)(ppt74,77) what are the Techniques used in what are the Techniques used in

TQM (ppt 57)TQM (ppt 57)State the factors affecting product State the factors affecting product

and service Quality seperately and service Quality seperately (ppt78,79)(ppt78,79)

Increase Sales Volume (Increase Increase Sales Volume (Increase Market share)Market share)

Increase Sale PriceIncrease Sale PriceReduce Purchase cost of InputReduce Purchase cost of InputReduce cost of productionReduce cost of production Improve quality (Reduce cost of Improve quality (Reduce cost of

Quality)Quality) Improve productivityImprove productivity

Improve ProfitImprove Profit

Productivity and Quality Productivity and Quality Mgmt Mgmt

DifferentiateDifferentiateProduction and ProductivityProduction and Productivity Inspection and Quality ControlInspection and Quality ControlSystem, Procedures and ProcessesSystem, Procedures and ProcessesQuality Control and Total Quality Quality Control and Total Quality

Mgmt (TQM)Mgmt (TQM)TQM and Six SigmaTQM and Six Sigma

Productivity- DefinitionProductivity- Definition(Productivity is a ratio)(Productivity is a ratio)

The amount of output per unit of input The amount of output per unit of input (labor, equipment, and capital). (labor, equipment, and capital).

• Number of products / No. of hours taken to produce them

• Revenue generated by employee / Salary of employee

System, Procedure and System, Procedure and ProcessProcess

System is a set of interactive elements corresponding to the given inputs to produce the desired output

Procedure is a set of activities which have to follow in a systematic format without taking any shortcuts

Process is a set of activities/operations which follow the procedures and systems with right RM and intermittent checking to avoid any lapses.

ProcessProcess

Process is a summation of activities Process is a summation of activities such as operations, inspection, such as operations, inspection, delays, storage, transportation and delays, storage, transportation and everything else that happens everything else that happens between the beginning and the end between the beginning and the end of the processof the process

Six SigmaSix Sigma Six Sigma- (The statistical Representation) is a Six Sigma- (The statistical Representation) is a

process of Quality measurement, which helps process of Quality measurement, which helps the organization in the improvement of their the organization in the improvement of their QualityQuality

Six Sigma is a systematical process which helps Six Sigma is a systematical process which helps the organization to eleminate the defects which the organization to eleminate the defects which prevent it from reaching perfection prevent it from reaching perfection

Six Sigma ensures the QC, TQM and Zero Six Sigma ensures the QC, TQM and Zero DefectDefect

When a process attains six sigma level it means When a process attains six sigma level it means that there is no room for the product to failthat there is no room for the product to fail

Six sigma is professionalizing of the Quality Six sigma is professionalizing of the Quality Management functionsManagement functions

Sigma Sigma LevelLevel

% Good% Good PPM/PPM/DPMODPMO

Cost of Quality as % Cost of Quality as % of Salesof Sales

22 95.4595.45 4550045500 Over 40%Over 40%

33 99.7399.73 27002700 25 - 40%25 - 40%

44 99.993799.9937 6363 15 - 25%15 - 25%

55 99.9999499.9999433

0.570.57 5 - 15%5 - 15%

66 99.9999999.999999898

0.0020.002 Less than 1%Less than 1%

What is TQM ?What is TQM ?

Total quality managementTotal quality management ( (TQMTQM) ) is a business management strategy is a business management strategy aimed at embedding awareness of aimed at embedding awareness of quality in all organizational quality in all organizational processes. TQM has been widely processes. TQM has been widely used in manufacturing, education, used in manufacturing, education, hospitals, call centers, government, hospitals, call centers, government, and service industries, as well as and service industries, as well as NASA space and science programsNASA space and science programs

Total Quality Management (TQM) is a Total Quality Management (TQM) is a

structured system for meeting and structured system for meeting and exceeding customer needs and exceeding customer needs and expectations by creating expectations by creating organization-wide participation in the organization-wide participation in the planning and implementation of planning and implementation of improvement (continuous and improvement (continuous and breakthrough) processesbreakthrough) processes

What is TQM ?What is TQM ?

Total Quality ManagementTotal Quality Management

TotalTotal: Involve all functions to have customer : Involve all functions to have customer focus and give reliable delivery of focus and give reliable delivery of product+service in line with customer’s product+service in line with customer’s expectations at lowest costexpectations at lowest cost

QualityQuality: Design and manufacture the : Design and manufacture the product+service to achieve zero defect and 100% product+service to achieve zero defect and 100% customer satisfaction customer satisfaction

ManagementManagement: Lead to achieve quality for : Lead to achieve quality for customers by communicating the vision, mission customers by communicating the vision, mission and values to all employees and creating and values to all employees and creating continuous improvement culture continuous improvement culture

Techniques for TQMTechniques for TQM Total Employee InvolvementTotal Employee Involvement : (205) : (205) Kaizen, Small Group Acitvity, Quality Circles, Key Kaizen, Small Group Acitvity, Quality Circles, Key

Business Process /Biz Process Re-engineering, Business Process /Biz Process Re-engineering, customer satisfaction surveys, Trainingcustomer satisfaction surveys, Training

Just in Time/ Waste Elemination : Just in Time/ Waste Elemination : (206)(206) TPM, Zero Defect, supplier PartnershipTPM, Zero Defect, supplier Partnership

Total Quality ControlTotal Quality Control: (207): (207) TQC is aplicable to all functions, use of 7 QC Tools, TQC is aplicable to all functions, use of 7 QC Tools,

use of SPC/SQC and PDCA, ISO 9000, Six Sigma, ISO use of SPC/SQC and PDCA, ISO 9000, Six Sigma, ISO 14000, understand the processes critical to quality 14000, understand the processes critical to quality (CTQ)(CTQ)

In a global marketplace a major characteristic that will distinguish those organizations that are successful will be the quality of leadership, management, employees, work processes, product and service. This means that products must not only meet customer’s community needs for value, they must be provided in a continuously improving, timely, cost-effective, innovative, and productive manner

Why TQM ?Why TQM ?

Principles of TQMPrinciples of TQM

1. Customer-Focused Organisation 1. Customer-Focused Organisation 2. Leadership 2. Leadership 3. Involvement of People 3. Involvement of People 4. Process Approach 4. Process Approach 5. System Approach to Management 5. System Approach to Management 6. Continual Improvement 6. Continual Improvement 7. Factual Approach to Decision Making 7. Factual Approach to Decision Making 8. Mutually Beneficial Supplier 8. Mutually Beneficial Supplier

RelationshipsRelationships

1.Customer Focussed 1.Customer Focussed OrganizationOrganization

Understand customer needs and expectations Understand customer needs and expectations for products, delivery, price, dependability, etc. for products, delivery, price, dependability, etc.

Ensure a balanced approach among customers Ensure a balanced approach among customers and other stake holders’ (owners, people, and other stake holders’ (owners, people, suppliers, local communities and society at suppliers, local communities and society at large) needs and expectations. large) needs and expectations.

Communicate these needs and expectations Communicate these needs and expectations throughout the organisation. throughout the organisation.

Measure customer satisfaction & act on results, Measure customer satisfaction & act on results, Manage customer relationships Manage customer relationships

2. Leadership2. Leadership Be proactive and lead by example. Be proactive and lead by example. Understand and respond to changes in the external Understand and respond to changes in the external

environment. environment. Consider the needs of all stake holders including customers, Consider the needs of all stake holders including customers,

owners, people, suppliers, local communities and society at owners, people, suppliers, local communities and society at large. large.

Establish a clear vision of the organisation's future. Establish a clear vision of the organisation's future. Establish shared values and ethical role models at all levels of Establish shared values and ethical role models at all levels of

the organisation. the organisation. Build trust and eliminate fear. Build trust and eliminate fear. Provide people with the required resources and freedom to Provide people with the required resources and freedom to

act with responsibility and accountability. act with responsibility and accountability. Inspire, encourage and recognise people's contributions. Inspire, encourage and recognise people's contributions. Promote open and honest communication. Promote open and honest communication. Educate, train and coach people. Educate, train and coach people. Set challenging goals and targets, and Set challenging goals and targets, and Implement a strategy to achieve these goals and targets. Implement a strategy to achieve these goals and targets.

3. Involvement of People3. Involvement of People Accept ownership and responsibility to solve Accept ownership and responsibility to solve

problems. problems. Actively seek opportunities to make improvements, Actively seek opportunities to make improvements,

and enhance competencies, knowledge and and enhance competencies, knowledge and experience. experience.

Freely share knowledge & experience in teams. Freely share knowledge & experience in teams. Focus on the creation of value for customers. Focus on the creation of value for customers. Be innovative in furthering the organisation’s Be innovative in furthering the organisation’s

objectives. objectives. Improve the way of representing the organisation to Improve the way of representing the organisation to

customers, local communities and society at large. customers, local communities and society at large. Help people derive satisfaction from their work, and Help people derive satisfaction from their work, and Make people enthusiastic and proud to be part of Make people enthusiastic and proud to be part of

the organisation. the organisation.

4. Process Approach4. Process Approach Define the process to achieve the desired result. Define the process to achieve the desired result. Identify and measure the inputs and outputs of the process. Identify and measure the inputs and outputs of the process. Identify the interfaces of the process with the functions of the Identify the interfaces of the process with the functions of the

organisation. organisation. Evaluate possible risks, consequences and impacts of Evaluate possible risks, consequences and impacts of

processes on customers, suppliers and other stake holders of processes on customers, suppliers and other stake holders of the process. the process.

Establish clear responsibility, authority, and accountability for Establish clear responsibility, authority, and accountability for managing the process. managing the process.

Identify internal and external customers, suppliers and other Identify internal and external customers, suppliers and other stake holders of the processstake holders of the process

When designing processes, consider process steps, activities, When designing processes, consider process steps, activities, flows, control measures, training needs, equipment, methods, flows, control measures, training needs, equipment, methods, information, materials and otherinformation, materials and other resources to achieve the resources to achieve the desired result. desired result.

5. System Approach to 5. System Approach to ManagementManagement

Define the system by identifying or Define the system by identifying or developing the processes that affect a given developing the processes that affect a given objective. objective.

Structure the system to achieve the Structure the system to achieve the objective in the most efficient way. objective in the most efficient way.

Understand the interdependencies among Understand the interdependencies among the processes of the system. the processes of the system.

Continually improve the system through Continually improve the system through measurement and evaluation, and measurement and evaluation, and

Estimate the resource requirements and Estimate the resource requirements and establish resource constraints prior to action. establish resource constraints prior to action.

6. Continual Improvements6. Continual Improvements Make continual improvement of products, processes and Make continual improvement of products, processes and

systems an objective for every individual in the systems an objective for every individual in the organisation. organisation.

Apply the basic improvement concepts of incremental Apply the basic improvement concepts of incremental improvement and breakthrough improvement. improvement and breakthrough improvement.

Use periodic assessments against established criteria of Use periodic assessments against established criteria of excellence to identify areas for potential improvement. excellence to identify areas for potential improvement.

Continually improve the efficiency and effectiveness of all Continually improve the efficiency and effectiveness of all processes. processes.

Promote prevention based activities. Promote prevention based activities. Provide every member of the organisation with appropriate Provide every member of the organisation with appropriate

education and training, on the methods and tools of education and training, on the methods and tools of continual improvement such as the Plan-Do-Check-Act continual improvement such as the Plan-Do-Check-Act cycle , problem solving , process re-engineering, and cycle , problem solving , process re-engineering, and process innovation. process innovation.

Establish measures and goals to guide and track Establish measures and goals to guide and track improvements,and improvements,and

Recognise improvements. Recognise improvements.

7. Factual Approach to Decision 7. Factual Approach to Decision MakingMaking

Take measurements and collect data and Take measurements and collect data and information relevant to the objective. information relevant to the objective.

Ensure that the data and information are Ensure that the data and information are sufficiently accurate, reliable and sufficiently accurate, reliable and accessible. accessible.

Analyse the data and information using Analyse the data and information using valid methods. valid methods.

Understand the value of appropriate Understand the value of appropriate statistical techniques, and statistical techniques, and

Make decisions and take action based on Make decisions and take action based on the results of logical analysis balanced the results of logical analysis balanced with experience and intuition. with experience and intuition.

8. Supplier Relationship8. Supplier Relationship

Identify and select key suppliers. Identify and select key suppliers. Establish supplier relationships that balance Establish supplier relationships that balance

short-term gains with long-term considerations short-term gains with long-term considerations for the organisation and society at large. for the organisation and society at large.

Create clear and open communications. Create clear and open communications. Initiate joint development and improvement of Initiate joint development and improvement of

products and processes. products and processes. Jointly establish a clear understanding of Jointly establish a clear understanding of

customers' needs. customers' needs. Share information and future plans, and Share information and future plans, and Recognise supplier improvements and Recognise supplier improvements and

achievements. achievements.

Ten Steps to TQMTen Steps to TQM

1.1. Set company strategy, values and cultureSet company strategy, values and culture2.2. Identify the customers and understand their Identify the customers and understand their

expectationsexpectations3.3. Define their specific needsDefine their specific needs4.4. Build the quality in the process from the Build the quality in the process from the

begining(advocate prevention & not correction)begining(advocate prevention & not correction)5.5. Reduce chronic wasteReduce chronic waste6.6. Reduce variationReduce variation7.7. All levels of the organization must be All levels of the organization must be

involved/trained involved/trained 8.8. Continually improve the quality of product or serviceContinually improve the quality of product or service9.9. Use structured methodology for process Use structured methodology for process

improvementimprovement10.10. Use a balanced approachUse a balanced approach

Objectives of TQMObjectives of TQM

100% Customer Satisfaction100% Customer Satisfaction

Zero DefectsZero Defects

Continuous Improvement CultureContinuous Improvement Culture

Eight Building Blocks of TQMEight Building Blocks of TQM

1.1. EthicsEthics2.2. Integrity Integrity 3.3. TrustTrust4.4. TrainingTraining5.5. TeamworkTeamwork6.6. LeadershipLeadership7.7. RecognitionRecognition8.8. CommunicationCommunication

Benefits of TQMBenefits of TQM

Ability to be more competitiveAbility to be more competitive Improved market shareImproved market shareCost reductionCost reduction Increased flexibility and responsivenessIncreased flexibility and responsivenessSimplified processesSimplified processes Improved communicationsImproved communicationsMore satisfaction among the workforceMore satisfaction among the workforce

5 ‘S’ Practices5 ‘S’ Practices

1.1. Seiri Seiri : separate out needed items: separate out needed items2.2. SeitonSeiton: organize workplace for faster : organize workplace for faster

retrieval (fix place for each item)retrieval (fix place for each item)3.3. SeisonSeison: sweeping/cleaning around : sweeping/cleaning around

work areawork area4.4. SeiketsuSeiketsu: keep everything clean for : keep everything clean for

constant state of readinessconstant state of readiness5.5. ShitsukeShitsuke: Everyone must understand : Everyone must understand

and practice the rules in the plantand practice the rules in the plant

MaintenanceMaintenance

Maintenance is done on the equipments Maintenance is done on the equipments to keep them running as efficiently as to keep them running as efficiently as possible for as long as possiblepossible for as long as possible

There are three types of maintenance :There are three types of maintenance :

1.1.Breakdown maintenance (unplanned)Breakdown maintenance (unplanned)

2.2.Preventive maintenance (planned)Preventive maintenance (planned)

3.3.Predictive maintenance ( High tech Predictive maintenance ( High tech analysis )analysis )

Total Productive MaintenanceTotal Productive Maintenance TPM , developed in Japan, is a scientific TPM , developed in Japan, is a scientific

company wide approach in which every company wide approach in which every employee is concerned about the employee is concerned about the maintenance , quality and efficiency of the maintenance , quality and efficiency of the equipmentequipment

The objective is to reduce the whole life cost The objective is to reduce the whole life cost of equipment through more efficient of equipment through more efficient maintenance management and to integrate maintenance management and to integrate the maintenance and manufacturing the maintenance and manufacturing functionsfunctions

Teamwork is a key element of TPMTeamwork is a key element of TPM Analysis of each equipment focuses on Analysis of each equipment focuses on

reduction of manufacturing losses and costsreduction of manufacturing losses and costs

Total Productive MaintenanceTotal Productive Maintenance

TPM aims to achieve improvements in TPM aims to achieve improvements in cost, quality and speed (productivity)cost, quality and speed (productivity)

This is equivalent to TQM (reduces This is equivalent to TQM (reduces variations due to automation)variations due to automation)

TPM addresses six big lossesTPM addresses six big losses

reduced yield process defectsreduced yield process defects

reduced speed idling and minor reduced speed idling and minor stoppagesstoppages

setup and adjustment equipment failuresetup and adjustment equipment failure

TPM AwardsTPM Awards

Effective 1971, the factories which Effective 1971, the factories which displayed remarkable achievement in displayed remarkable achievement in plant maintenance were given this plant maintenance were given this awardaward

Effective 1989, the factories which Effective 1989, the factories which have achieved company-wide have achieved company-wide efficiency & productivity by adopting efficiency & productivity by adopting company-wide TPM are given this company-wide TPM are given this award award

Five Pillars of TPMFive Pillars of TPM

1. Quality Integration 1. Quality Integration

(Process capability- Cpk)(Process capability- Cpk)

2. New Equipment Management (design)2. New Equipment Management (design)

3. Autonomous Maintenance (military like)3. Autonomous Maintenance (military like)

4. Planned Maintenance (reduce unplanned)4. Planned Maintenance (reduce unplanned)

5. Equipment Improvement (productivity)5. Equipment Improvement (productivity)

Seven Deadly DisastersSeven Deadly DisastersDr Deming- TQMDr Deming- TQM

1.1. Lack of consistency of purposeLack of consistency of purpose2.2. Emphasis on short term profitsEmphasis on short term profits3.3. MBO and performance Appraisal MBO and performance Appraisal

systemsystem4.4. Job hopping by managersJob hopping by managers5.5. Using only visible data for decision Using only visible data for decision

makingmaking6.6. Excessive medical costsExcessive medical costs7.7. Excessive cost of liabilityExcessive cost of liability

Deming Application PrizeDeming Application Prize

For organizations or divisions of For organizations or divisions of organizations that manage their organizations that manage their business autonomously business autonomously

Given to organizations or divisions of Given to organizations or divisions of organizations that have achieved organizations that have achieved distinctive performance distinctive performance improvement through the application improvement through the application of TQM in a designated year of TQM in a designated year

Deming WheelDeming Wheel

Sales <<<<<<<< < ProductionSales <<<<<<<< < Production

I II IResearch DesignResearch Design

I II IDesign ResearchDesign Research

I II IProduction>>>>>>>>>>>SALESProduction>>>>>>>>>>>SALES

Dr Deming ( 1900-1993)Dr Deming ( 1900-1993)14 points14 points

1.1. Create and publish statement of the aims Create and publish statement of the aims and purpose for improvements and purpose for improvements

2.2. Adopt new philosophiesAdopt new philosophies

3.3. Do not depend on inspection for qualityDo not depend on inspection for quality

4.4. End the practice of contract to lowest End the practice of contract to lowest bidderbidder

5.5. Continuously improve the system of Continuously improve the system of production and serviceproduction and service

6.6. Institute training on the jobInstitute training on the job

7.7. Teach and institute leadershipTeach and institute leadership

Dr Deming’s 14 points Dr Deming’s 14 points

8. Drive out fear, create trust and climate for 8. Drive out fear, create trust and climate for innovationinnovation

9. Direct all efforts to aims and purposes of co.9. Direct all efforts to aims and purposes of co.

10. Estimate targets for workforce10. Estimate targets for workforce

11. Eliminate quotas and institute methods of 11. Eliminate quotas and institute methods of improvementsimprovements

12. Eliminate annual rating and merit system12. Eliminate annual rating and merit system

13. Encourage education and self improvement13. Encourage education and self improvement

14. Action to accomplish the transformation14. Action to accomplish the transformation

Crosby’s 14 steps (Born Crosby’s 14 steps (Born 1926)1926)

1.1. Commitment of top ManagementCommitment of top Management

2.2. Quality improvement teamsQuality improvement teams

3.3. Establish Quality measurementEstablish Quality measurement

4.4. Estimate Cost of qualityEstimate Cost of quality

5.5. Spread Quality AwarenessSpread Quality Awareness

6.6. Identify opportunities for improvementIdentify opportunities for improvement

7.7. Committee for Zero defect monitoringCommittee for Zero defect monitoring

Crosby’s 14 steps (contd)Crosby’s 14 steps (contd)

8. Employee education8. Employee education

9. Zero defect day9. Zero defect day

10. Goal setting10. Goal setting

11. Error cause removal11. Error cause removal

12. Recognition12. Recognition

13. Quality councils13. Quality councils

14. Do it all again14. Do it all again

Crosby’s 4 Absolutes of QMCrosby’s 4 Absolutes of QM

Crosby’s philosophy: Crosby’s philosophy:

“ “Do it right the first time”Do it right the first time”

The Four absolutes are:The Four absolutes are:Quality – conformance to requirementsQuality – conformance to requirementsSystem for causing quality- preventionSystem for causing quality- preventionPerformance standard- zero defectPerformance standard- zero defectMeasurement of quality- price of non-Measurement of quality- price of non-

conformance (COQ)conformance (COQ)

Juran’s Philosophy(1904-Juran’s Philosophy(1904-2008)2008)

Quality = fitness for use by the Quality = fitness for use by the customercustomer

Juran’s TriologyJuran’s Triology: (Quality oriented : (Quality oriented Principles)Principles)

1.1. Quality PlanningQuality Planning

2.2. Quality ControlQuality Control

3.3. Quality improvementQuality improvement

Steps of Quality ControlSteps of Quality Control

Setting Quality standards Setting Quality standards

Apraising conformance to these Apraising conformance to these standardsstandards

Acting when standards are exceededActing when standards are exceeded

Planning for improvements in standardsPlanning for improvements in standards

Quality AssuranceQuality Assurance

Definition :Definition :

For the customer to buy the For the customer to buy the product/service with confidence and product/service with confidence and use it for a long time with ease and use it for a long time with ease and satisfaction, the manufacturer has to satisfaction, the manufacturer has to give assurance and also give give assurance and also give evidence that the product will not failevidence that the product will not fail

Steps of Quality AssuranceSteps of Quality Assurance

Develop quality plansDevelop quality plansCarryout vendor quality surveysCarryout vendor quality surveysCarryout product quality auditsCarryout product quality auditsReview disposition of non-conforming Review disposition of non-conforming

productsproducts Initiate customers’ future needsInitiate customers’ future needsCo-ordinate document control Co-ordinate document control

activityactivityUpgrade inspection recordsUpgrade inspection records

Concepts of QualityConcepts of Quality

Variation is the main reason of poor QualityVariation is the main reason of poor Quality There is no such thing as Quality Problem, There is no such thing as Quality Problem,

it is an opportunity to improveit is an opportunity to improve There is nothing like economics of Quality,it There is nothing like economics of Quality,it

is cheaper to do the job right , the first timeis cheaper to do the job right , the first time The only performance measurement is the The only performance measurement is the

cost of Qualitycost of Quality The only Performance standard is The only Performance standard is

“ “ZERO DEFECT”ZERO DEFECT”

Cost Of QualityCost Of Quality

Prevention Cost…….investment costPrevention Cost…….investment costAppraisal Cost……Inspection & Appraisal Cost……Inspection &

AnalysisAnalysis Internal Cost……Scrap and reworkInternal Cost……Scrap and reworkExternal Cost……Customer External Cost……Customer

Complaints Complaints

Product Recalls Product Recalls and and Returns Returns

Cost of QualityCost of Quality

Contribution of Quality CostsContribution of Quality Costs

Prevention costs…..High throughoutPrevention costs…..High throughoutAppraisal costs……low/same throughoutAppraisal costs……low/same throughout Internal costs……..initially high, graduallyInternal costs……..initially high, gradually decliningdecliningExternal costs……initially high, sharply External costs……initially high, sharply

decline (stability period)decline (stability period)Total Cost……….sharply decline as the Total Cost……….sharply decline as the

product becomes stable product becomes stable

Economic Balance of Economic Balance of Quality and CostsQuality and Costs

As we keep improving the Quality, the As we keep improving the Quality, the total Cost of Quality keeps coming downtotal Cost of Quality keeps coming down

However if we improve the Quality However if we improve the Quality beyond a certain point, the prevention beyond a certain point, the prevention cost will sharply go up and the total cost cost will sharply go up and the total cost will also go upwill also go up

Hence we have to find an economic Hence we have to find an economic Balance of Cost and Quality (six sigma)Balance of Cost and Quality (six sigma)

Audit of COQAudit of COQ

Set an annual target of COQSet an annual target of COQ Monitor the actual expenses of COQMonitor the actual expenses of COQ All departments to control COQAll departments to control COQ Evaluate COQ every month/QuarterEvaluate COQ every month/Quarter Compute COQ as a percentage of SalesCompute COQ as a percentage of Sales At the start of TQM activity COQ and COQ as At the start of TQM activity COQ and COQ as

% of Sales is high, but gradually this comes % of Sales is high, but gradually this comes down if TQM is implemented in the scientific down if TQM is implemented in the scientific mannermanner

Revise the annual target of COQ downwards Revise the annual target of COQ downwards year after yearyear after year

The Customer DelightThe Customer Delight

Customer awareness = keeping customer’sCustomer awareness = keeping customer’srequirements in mindrequirements in mind

These requirements are: Right Quality, These requirements are: Right Quality, Right Quantity, Right time & Right CostRight Quantity, Right time & Right Cost

The customer delight is far beyond customerThe customer delight is far beyond customersatisfactionsatisfactione.g: Taxi keeping newspapers, Telephonee.g: Taxi keeping newspapers, Telephone

directory, Railway Timetable, directory, Railway Timetable, etcetc

Repeat OrdersRepeat Orders

Why customers Quit ?Why customers Quit ?

1% die natural death1% die natural death3% relocate3% relocate5% move away due to friends contact5% move away due to friends contact9% due to competitive reasons9% due to competitive reasons14% poor quality of product14% poor quality of product68% indifferent attitude towards 68% indifferent attitude towards

customerscustomers

Definition Of TQMDefinition Of TQMOld Definition of Quality:Old Definition of Quality: Products and services are provided Products and services are provided

exactly as per the specifications exactly as per the specifications already laid downalready laid down

New definition of TQMNew definition of TQM:: Products and services that totally Products and services that totally

satisfy the customer needs and satisfy the customer needs and expectations in every respect, on a expectations in every respect, on a continuous basiscontinuous basis

Techniques of TQMTechniques of TQM Total Employee InvolvementTotal Employee Involvement : : Kaizen, SGA, Quality Circles, KBP/BPRKaizen, SGA, Quality Circles, KBP/BPR

Just in Time/ Waste EleminationJust in Time/ Waste Elemination:: No waiting, material comes in the factory No waiting, material comes in the factory

and directly goes for assembly instead of and directly goes for assembly instead of storing in storesstoring in stores

Total Quality ControlTotal Quality Control: TQC is applicable to : TQC is applicable to all functions, use of 7 QC Tools, use of all functions, use of 7 QC Tools, use of SPC/SQC and PDCASPC/SQC and PDCA

Implementation Process ofImplementation Process ofTQMTQM

Training Training :: Team Leaders, Facilitators and other Team Leaders, Facilitators and other employees employees

Decision StyleDecision Style : : Democratic firm decision Democratic firm decision Vision :Vision : Long Term Dream Long Term Dream Mission :Mission : Short term objectives to achieve Short term objectives to achieve

vision vision Quality Policy Quality Policy : : Culture to be followed Culture to be followed TQM Team Structure TQM Team Structure : : Team Leader, Facilitator Team Leader, Facilitator Steering Committee :Steering Committee : For Pain Areas For Pain Areas Shared Leadership :Shared Leadership : Develop the company objectives Develop the company objectives

collectivelycollectively Communication :Communication : Throughout the organisation Throughout the organisation Annual Reward Policy :Annual Reward Policy : Annual apraisals and recognition Annual apraisals and recognition

to to performers performers

Elements of TQMElements of TQM Commitment by senior management and all employees Commitment by senior management and all employees Meeting customer requirements Meeting customer requirements Reducing development cycle times Reducing development cycle times Just In Time/Demand Flow Manufacturing Just In Time/Demand Flow Manufacturing Improvement teams Improvement teams Reducing product and service costs Reducing product and service costs Systems to facilitate improvement Systems to facilitate improvement Line Management ownership Line Management ownership Employee involvement and empowerment Employee involvement and empowerment Recognition and celebration Recognition and celebration Challenging quantified goals and benchmarking Challenging quantified goals and benchmarking Focus on processes / improvement plans Focus on processes / improvement plans Specific incorporation in strategic planningSpecific incorporation in strategic planning

Vision StatementVision Statement

Bill Gates:There will be a personal computer Bill Gates:There will be a personal computer on every desk running microsoft softwareon every desk running microsoft software

Vision Statement should answer:Vision Statement should answer:1.1. Why did I start this businessWhy did I start this business2.2. When I move on from this business, what do When I move on from this business, what do

I leave behind I leave behind3.3. What am I providing for my customers What am I providing for my customers

beyond product/service beyond product/service4.4. If my business could be everything I dreamed If my business could be everything I dreamed

how would it be how would it be

Mission StatementMission Statement

Mission statement describes the WHAT Mission statement describes the WHAT of your business, it states why your of your business, it states why your organization is in business and what organization is in business and what you are hoping to achieveyou are hoping to achieve

Components of Mission Statement:Components of Mission Statement:1.1. The overall purpose of your businessThe overall purpose of your business2.2. What is your business: product/serviceWhat is your business: product/service3.3. What is important for your business- What is important for your business- the values your business lives bythe values your business lives by

Expectations from the Mission Expectations from the Mission StatementStatement

Mission draws on your belief Mission draws on your belief statementsstatements

Mission must be future oriented and Mission must be future oriented and portray your organization as it will beportray your organization as it will be

Mission must focus on one common Mission must focus on one common purposepurpose

Mission must be specific to the Mission must be specific to the organization, not genericorganization, not generic

Mission statement must be short, two Mission statement must be short, two sentences max sentences max

Quality SystemsQuality Systems( Quality Mgmt systems)( Quality Mgmt systems)

The quality of the product is checked The quality of the product is checked to see the variationto see the variation

The control in variation wrt the The control in variation wrt the design spec/dimension is aimed atdesign spec/dimension is aimed at

More the variation, poorer the qualityMore the variation, poorer the qualityLess the variation better the qualityLess the variation better the qualityThe analysis of variations ( control The analysis of variations ( control

charts) give direction for the action charts) give direction for the action to be taken to control the variationto be taken to control the variation

Quality Management SystemQuality Management System

Quality PlanQuality Plan (Quality Assurance Plan) (Quality Assurance Plan)

A Quality plan is a document specifying the A Quality plan is a document specifying the quality management system elements and quality management system elements and the resources to be applied in a specific casethe resources to be applied in a specific case

Activities to be considered are:Activities to be considered are:

Product spec,quality and delivery Product spec,quality and delivery requirements, how the product/service is requirements, how the product/service is created and resources required,quality created and resources required,quality verification and records to be kept to verification and records to be kept to demonstrate conformity demonstrate conformity

Road Map of Quality PlanRoad Map of Quality Plan

Identify who the customers areIdentify who the customers are Determine the needs of those customersDetermine the needs of those customers Translate those needs into our languageTranslate those needs into our language Develop a product that can respond to Develop a product that can respond to

those needsthose needs Optimise the product features so as to Optimise the product features so as to

meet our needs and customer’s needsmeet our needs and customer’s needs Optimise the processOptimise the process Prove that the process can produce the Prove that the process can produce the

product under operating conditionsproduct under operating conditions Transfer the process to operationTransfer the process to operation

ISO 9000 StandardsISO 9000 Standards

ISO 9000 is a series of International stdsISO 9000 is a series of International stdsTo be used by the cos. wanting to To be used by the cos. wanting to

implement in house quality systemsimplement in house quality systemsThese stds are developed by international These stds are developed by international

organization for standardization (ISO)organization for standardization (ISO)These promote international trade by These promote international trade by

providing one consistent set of providing one consistent set of requirements recognized around the worldrequirements recognized around the world

ISO 9000 CertificateISO 9000 Certificate Any organization in any business field can Any organization in any business field can

make application to the certifying agencies make application to the certifying agencies e.g. BVQI for obtaining ISO 9000 certificatee.g. BVQI for obtaining ISO 9000 certificate

They guide the organization to make the They guide the organization to make the quality manual of inhouse procedures and quality manual of inhouse procedures and systemssystems

Management representatives are appointed Management representatives are appointed to look after ISO requirementsto look after ISO requirements

Any deviation is termed as NC and recorded Any deviation is termed as NC and recorded in NCR (non conformity report) which needs in NCR (non conformity report) which needs to be resolved to be resolved

Then the certifying agency awards ISO 9000 Then the certifying agency awards ISO 9000 certificatecertificate

Quality ManualQuality ManualThis is an important document and covers the This is an important document and covers the

following areas of business:following areas of business:

1. Management 1. Management responsibility responsibility

2. Quality system2. Quality system3. Contract review3. Contract review4. Purchasing4. Purchasing5. Product 5. Product

identification and identification and traceabilitytraceability

6. Process control6. Process control7. Inspection and test 7. Inspection and test

equipmentsequipments

8. Control of non 8. Control of non conforming products conforming products

9. Storage, packing 9. Storage, packing and and delivery delivery

10. Quality records10. Quality records11. Internal quality 11. Internal quality

audits audits12. Training 12. Training 13. Statistical 13. Statistical

techniques techniques

ISO 9000 SeriesISO 9000 Series

ISO 9001 covers product design, Mfg, ISO 9001 covers product design, Mfg, marketing, installation and servicesmarketing, installation and services

ISO 9002 covers Mfg and MktgISO 9002 covers Mfg and Mktg

ISO 9003 covers installation and ISO 9003 covers installation and testingtesting

ISO 14000ISO 14000 ISO 14001-1996 is a part of Quality ISO 14001-1996 is a part of Quality

Management system pertaining to Management system pertaining to environment management.environment management.

All organizations have to control the impact of All organizations have to control the impact of their activities, products and services on the their activities, products and services on the environmentenvironment

Most countries have stringent norms for Most countries have stringent norms for control on pollutioncontrol on pollution

The company has to audit to assess their The company has to audit to assess their performance and ensure that it is within limits performance and ensure that it is within limits

This system needs to be integrated with This system needs to be integrated with overall quality management system of the overall quality management system of the organizationorganization

QS 9000QS 9000(Now known as TS 16949)(Now known as TS 16949)

QS 9000 issued in 1994 is the name given to QS 9000 issued in 1994 is the name given to the Quality System Requirements of the the Quality System Requirements of the automotive industry which were developed by automotive industry which were developed by Chrysler, Ford & General Motors and the Chrysler, Ford & General Motors and the companies having QS-9000 are considered to companies having QS-9000 are considered to have higher standards and better quality have higher standards and better quality products. products.

QS-9000 helps companies to stay ahead of QS-9000 helps companies to stay ahead of their competition. It does this by filling gaps in their competition. It does this by filling gaps in the quality systems that can cause problems the quality systems that can cause problems

QS 9000 tells current and potential customers QS 9000 tells current and potential customers that the product has consistent quality and is that the product has consistent quality and is manufactured under controlled conditions. manufactured under controlled conditions.

Business Process Re-engineeringBusiness Process Re-engineering(BPR)(BPR)

BPR is a management approach BPR is a management approach aiming at improvements by aiming at improvements by identifying and implementing new identifying and implementing new ways of carrying out work. Thus ways of carrying out work. Thus elevating efficiency and elevating efficiency and effectiveness of the processes that effectiveness of the processes that exist within and across the exist within and across the organization organization

Steps of BPRSteps of BPR

Develop the business Vision and process Develop the business Vision and process objectives such as cost reduction, time objectives such as cost reduction, time reduction, output quality imrovement etc.reduction, output quality imrovement etc.

Identify the business processes to be Identify the business processes to be redesigned (challenge old processes)redesigned (challenge old processes)

Evaluate old processes to avoid repetition Evaluate old processes to avoid repetition of old mistakesof old mistakes

Identify IT levers: awareness of IT Identify IT levers: awareness of IT capabilities can influence BPR processcapabilities can influence BPR process

Design and build new processDesign and build new process

Malcolm Baldrige AwardMalcolm Baldrige Award

This annual award was introduced in This annual award was introduced in US in 1987 to recognize US US in 1987 to recognize US companies for Business Excellence companies for Business Excellence and Quality achievement. The and Quality achievement. The objectives were :objectives were :

1.1. To promote awareness of QualityTo promote awareness of Quality2.2. To understand requirements for To understand requirements for

Performance ExcellencePerformance Excellence3.3. Sharing of successful practices with Sharing of successful practices with

other companiesother companies

Malcolm Baldrige AwardMalcolm Baldrige Award

Important Roles:Important Roles:

1.1. Improve performance practices and Improve performance practices and capabilitiescapabilities

2.2. Sharing of best practicesSharing of best practices

3.3. Serve as a working tool for managing Serve as a working tool for managing performance, planning, training and performance, planning, training and assessmentassessment

4.4. Improvement of overall co. Improvement of overall co. performanceperformance

Malcolm Baldrige AwardMalcolm Baldrige Award

Award examines the quality of the Award examines the quality of the organizationorganization

in 7 categories: (100 marks each)in 7 categories: (100 marks each)1.1. LeadershipLeadership2.2. Information and AnalysisInformation and Analysis3.3. Strategic PlanningStrategic Planning4.4. Human Resource Development & mgmtHuman Resource Development & mgmt5.5. Process Management (Improvements)Process Management (Improvements)6.6. Business Results (Improvements)Business Results (Improvements)7.7. Customer Focus and SatisfactionCustomer Focus and Satisfaction

Malcolm Baldrige AwardMalcolm Baldrige Award

Steps for ExaminationSteps for Examination

1.1. Write the application with the overview of Write the application with the overview of co , the vision and mission, strategic co , the vision and mission, strategic plans and trends of improvements in last plans and trends of improvements in last 5 years in all areas of criteria (categories)5 years in all areas of criteria (categories)

2.2. The application shall be assessed and The application shall be assessed and marks will be given to individual companymarks will be given to individual company

3.3. The site visits shall be made by the The site visits shall be made by the examiners to verify the trends and examiners to verify the trends and practicespractices

Product and Service QualityProduct and Service Quality Factors affecting Product Factors affecting Product

QualityQuality1.1. MenMen2.2. MaterialsMaterials3.3. MachinesMachines4.4. Manufacturing conditionsManufacturing conditions5.5. Manufacturing processManufacturing process6.6. Capability to invest moneyCapability to invest money7.7. Management commitment to QualityManagement commitment to Quality8.8. Product design (Tangible and *Intangible)Product design (Tangible and *Intangible)9.9. After sales service (*Safety and After sales service (*Safety and

Reliability)Reliability)

Product and Service QualityProduct and Service QualityTen Dimensions of Service Ten Dimensions of Service

QualityQuality

1. Quality1. Quality

2. Tangibility2. Tangibility

3. Reliability3. Reliability

4. Responsiveness4. Responsiveness

5. Communication5. Communication

6. Security6. Security

7. Competence7. Competence

8. Courtesy8. Courtesy

9. Understanding9. Understanding

10. Access10. Access

Some examples of Service Some examples of Service QualityQuality

Answer the phoneAnswer the phoneDon’t overpromiseDon’t overpromiseListen to your CustomersListen to your CustomersDeal with ComplaintsDeal with ComplaintsBe helpful and knowledgeableBe helpful and knowledgeableTrain the staff to be courteousTrain the staff to be courteousTake the extra stepTake the extra stepThrow in something extraThrow in something extra

Service QualityService Quality

Service quality has high level of Service quality has high level of intangibilityintangibility

Most services are intangible as there Most services are intangible as there are performances and not objectsare performances and not objects

Services are perishable , they can not Services are perishable , they can not be inventoried, saved and resold laterbe inventoried, saved and resold later

The actual performance of service The actual performance of service differs from provider to providerdiffers from provider to provider

Quality CirclesQuality Circles QC is a small group of employees working QC is a small group of employees working

on similar jobs, mostly at worker level to on similar jobs, mostly at worker level to perform quality control and improvement perform quality control and improvement activities within their workplaceactivities within their workplace

These groups work on continuous These groups work on continuous improvements as a part of company wide improvements as a part of company wide activityactivity

This was started in Japan in 1962 in line This was started in Japan in 1962 in line with the conviction of Ishikawa that the with the conviction of Ishikawa that the workers can significantly contribute to workers can significantly contribute to improve quality and productivityimprove quality and productivity

Japan attributes phenomenal growth in Japan attributes phenomenal growth in 1960-1970 to QC1960-1970 to QC

Quality CirclesQuality Circles

Basic Objectives:Basic Objectives:

1.1. Wider contribution towards Wider contribution towards improvement and development of improvement and development of the enterprisethe enterprise

2.2. Respecting humanity and building a Respecting humanity and building a happy and cheerful workplacehappy and cheerful workplace

3.3. Exploiting human capabilities fully Exploiting human capabilities fully and drawing out infinite possibilities and drawing out infinite possibilities

Quality CirclesQuality CirclesComponents of QCComponents of QC

1.1. Decide on the themeDecide on the theme2.2. Establish the goalsEstablish the goals3.3. Clarify reasons and their importanceClarify reasons and their importance4.4. Access the current situationAccess the current situation5.5. Probe the causes and analyze themProbe the causes and analyze them6.6. Establish corrective measures Establish corrective measures 7.7. Implement the measuresImplement the measures8.8. Evaluate resultsEvaluate results9.9. Standardize to prevent slipupsStandardize to prevent slipups10.10. Reflection of the resultsReflection of the results

Structure of Quality CircleStructure of Quality Circle

Top management (monitor progress)Top management (monitor progress)Steering committee (Evaluate progress)Steering committee (Evaluate progress)Facilitator (eliminate hurdles)Facilitator (eliminate hurdles)Leader and Dy Leader (guide members)Leader and Dy Leader (guide members)Members (study cause and effect)Members (study cause and effect)Non members (give additional inputs)Non members (give additional inputs)

Sequence of TQMSequence of TQM

Operational ManagementOperational Management 5 ‘S’5 ‘S’ BPRBPRQuality ManagementQuality Management QC ( Quality Circles)QC ( Quality Circles) ISOISO TPM ( Total Productive Maintenance)TPM ( Total Productive Maintenance) Six Sigma ( For Processes CTQ )Six Sigma ( For Processes CTQ )

Books For ReferenceBooks For Reference

Quality Mgmt SystemsQuality Mgmt Systems

Devendra Kumar Bhatt / Aparna RajDevendra Kumar Bhatt / Aparna RajProductivity and Quality MgmtProductivity and Quality Mgmt

Shashikant D AphaleShashikant D Aphale

Vipul PrakashanVipul Prakashan