Total Quality Management

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Learning Objectives
◼ Explain the meaning of TQM
◼ Identify the costs of Quality
◼ Describe the evolution of TQM
◼ Identify Quality leaders and their
contributions

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 Learning Objectives con’t
◼ Identify key features of the TQM
philosophy
◼ Describe tools for identifying and solving
quality problems
◼ Describe quality awards and quality
certifications

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Defining Quality
◼ Definition of quality is dependent on the
people defining it
◼ There is no single, universal definition

of quality
◼ 5 common definitions include:

(See next slide)

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Defining Quality – 5 Ways
1. Conformance to specifications
▪ Does product/service meet targets and tolerances defined
by designers?
2. Fitness for use
▪ Evaluates performance for intended use
3. Value for price paid
▪ Evaluation of usefulness vs. price paid
4. Support services
▪ Quality of support after sale
5. Psychological
▪ Ambiance, prestige, friendly staff

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Manufacturing Quality vs.
Service Quality
◼ Manufacturing quality focuses on
tangible product features
◼ Conformance, performance, reliability, features
◼ Service organizations produce intangible
products that must be experienced
◼ Quality often defined by perceptional factors like
courtesy, friendliness, promptness, waiting time,
consistency

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Cost of Quality
◼ Quality affects all aspects of the organization
◼ Quality has dramatic cost implications of:
◼ Quality control costs
◼ Prevention costs
◼ Appraisal costs
◼ Quality failure costs
◼ Internal failure costs
◼ External failure costs

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Cost of Quality – 4 Categories

Early detection/prevention is less costly

◼ (Maybe by a factor of 10)

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Evolution of TQM – New Focus

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Quality Gurus

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 TQM Philosophy
◼ TQM Focuses on identifying quality problem root
causes
◼ Encompasses the entire organization
◼ Involves the technical as well as people
◼ Relies on seven basic concepts of
◼ Customer focus

◼ Continuous improvement

◼ Employee empowerment

◼ Use of quality tools

◼ Product design

◼ Process management

◼ Managing supplier quality

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TQM Philosophy - concepts
◼ Focus on Customer
◼ Identify and meet customer needs
◼ Stay tuned to changing needs, e.g. fashion styles
◼ Continuous Improvement
◼ Continuous learning and problem solving, e.g.
Kaizen, 6 sigma
◼ Plan-D-Study-Act (PDSA)
◼ Benchmarking
◼ Employee Empowerment
◼ Empower all employees; external and internal
customers
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TQM Philosophy– Concepts con’t
◼ Team Approach
◼ Teams formed around processes – 8 to 10
people
◼ Meet weekly to analyze and solve problems

◼ Use of Quality Tools

◼ Ongoing training on analysis, assessment,
and correction, & implementation tools
◼ Studying practices at “best in class”
companies
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Ways of Improving Quality
◼ Plan-Do-Study-Act Cycle (PDSA)
◼ Also called the Deming Wheel after originator
◼ Circular, never ending problem solving process
◼ Seven Tools of Quality Control
◼ Tools typically taught to problem solving teams
◼ Quality Function Deployment
◼ Used to translate customer preferences to design

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 PDSA Details
◼ Plan
◼ Evaluate current process
◼ Collect procedures, data, identify problems
◼ Develop an improvement plan, performance
objectives
◼ Do
◼ Implement the plan – trial basis
◼ Study
◼ Collect data and evaluate against objectives
◼ Act
◼ Communicate the results from trial
◼ If successful, implement new process
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PDSA con’t
◼ Cycle is repeated
◼ After act phase, start planning and repeat process

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Seven Tools of Quality Control
1. Cause-and-Effect Diagrams
2. Flowcharts
3. Checklists
4. Control Charts
5. Scatter Diagrams
6. Pareto Analysis
7. Histograms
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Cause-and-Effect Diagrams
◼ Called Fishbone Diagram
◼ Focused on solving identified quality problem

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Flowcharts
◼ Used to document the detailed steps in a
process
◼ Often the first step in Process Re-Engineering

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 Checklist
Simple data check-off sheet designed to identify
type of quality problems at each work station;
per shift, per machine, per operator

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Control Charts
◼ Important tool used in Statistical Process
Control – Chapter 6
◼ The UCL and LCL are calculated limits used to
show when process is in or out of control

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Scatter Diagrams
◼ A graph that shows how two variables are
related to one another
◼ Data can be used in a regression analysis to
establish equation for the relationship

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Pareto Analysis
◼ Technique that displays the degree of importance for each
element
◼ Named after the 19th century Italian economist; often called the
80-20 Rule
◼ Principle is that quality problems are the result of only a few
problems e.g. 80% of the problems caused by 20% of causes

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Histograms
◼ A chart that shows the frequency distribution of
observed values of a variable like service time
at a bank drive-up window

◼ Displays whether the distribution is symmetrical

(normal) or skewed

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 Product Design - Quality
Function Deployment
◼ Critical to ensure product design meets customer
expectations
◼ Useful tool for translating customer specifications into
technical requirements is Quality Function Deployment
(QFD)
◼ QFD encompasses
◼ Customer requirements
◼ Competitive evaluation
◼ Product characteristics
◼ Relationship matrix
◼ Trade-off matrix
◼ Setting Targets

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 Quality Function Deployment
(QFD) Details
Process used to ensure that the product meets customer specifications

Voice of the
engineer

Customer-based
Voice benchmarks
of the
customer

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 QFD - House of Quality

Trade-offs Technical
Benchmarks

Targets

Adding trade-offs, targets & developing product specifications

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 Reliability – critical to quality
◼ Reliability is the probability that the
product, service or part will function as
expected
◼ No product is 100% certain to function
properly
◼ Reliability is a probability function
dependent on sub-parts or components

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 Reliability – critical to quality
◼ Reliability of a system is the product of
component reliabilities
RS = (R1) (R2) (R3) . . . (Rn)
RS = reliability of the product or system
R1 = reliability of the components
◼ Increase reliability by placing components
in parallel

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 Reliability – critical to quality
◼ Increase reliability by placing components
in parallel
◼ Parallel components allow system to
operate if one or the other fails

RS = R1 + (R2* Probability of needing 2nd

component)

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 Process Management &
Managing Supplier Quality
◼ Quality products come from quality sources
◼ Quality must be built into the process
◼ Quality at the source is belief that it is
better to uncover source of quality
problems and correct it
◼ TQM extends to quality of product from
company’s suppliers

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Quality Awards and Standards
◼ Malcolm Baldrige National Quality
Award (MBNQA)
◼ The Deming Prize
◼ ISO 9000 Certification
◼ ISO 14000 Standards

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MBNQA- What Is It?
◼ Award named after the former Secretary of
Commerce – Reagan Administration
◼ Intended to reward and stimulate quality
initiatives
◼ Given to no more that two companies in each
of three categories; manufacturing, service,
and small business
◼ Past winners; Motorola Corp., Xerox, FedEx,
3M, IBM, Ritz-Carlton

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The Deming Prize
◼ Given by the Union of Japanese Scientists and
Engineers since 1951
◼ Named after W. Edwards Deming who worked
to improve Japanese quality after WWII
◼ Not open to foreign companies until 1984
◼ Florida P & L was first US company winner

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ISO Standards
◼ ISO 9000 Standards:
◼ Certification developed by International
Organization for Standardization
◼ Set of internationally recognized quality standards
◼ Companies are periodically audited & certified
◼ ISO 9000:2000 QMS – Fundamentals and
Standards
◼ ISO 9001:2000 QMS – Requirements
◼ ISO 9004:2000 QMS - Guidelines for Performance
◼ More than 40,000 companies have been certified
◼ ISO 14000:
◼ Focuses on a company’s environmental
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Why TQM Efforts Fail
◼ Lack of a genuine quality culture
◼ Lack of top management support
and commitment
◼ Over- and under-reliance on SPC
methods

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TQM Within OM
◼ TQM is broad sweeping organizational change
◼ TQM impacts
◼ Marketing – providing key inputs of customer information
◼ Finance – evaluating and monitoring financial impact
◼ Accounting – provides exact costing
◼ Engineering – translate customer requirements into specific
engineering terms
◼ Purchasing – acquiring materials to support product
development
◼ Human Resources – hire employees with skills necessary
◼ Information systems – increased need for accessible
information

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 Chapter 5 Highlights
◼ TQM is different from the old concept of quality
as it focus is on serving customers, identifying
the causes of quality problems, and building
quality into the production process
◼ Four categories of quality cost of prevention,
appraisal, internal and external costs
◼ Seven TQM notable individuals include Walter A.
Shewhart, W. Edwards Demings, Joseph M.
Juran, Armand V. Feigenbaum, Philip B. Crosby,
Kaoru Ishikawa, and Genichi Taguchi
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 Chapter 5 Highlights – con’t
◼ Seven features of TQM combine to create TQM
philosophy; customer focus, continuous
improvement, employee empowerment, use of
quality tools, product design, process
management, and managing supplier quality
◼ QFD is a tool used to translate customer needs
into specific engineering requirements
◼ Reliability is the probability that the product will
functions as expected
◼ The Malcom Baldridge Award is given to
companies to recognize excellence in quality
management.
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 Chapter 5 Homework Hints
◼ This is not required, but for extra credit!
◼ Research on TQM:
◼ Internet probably best, but library OK.
◼ Link on my website:
http://www.csus.edu/mgmt/blakeh/www.html
◼ Find an article that tells how a firm uses one (or
more) of the quality concepts in Chapter 5.
◼ Write a summary of the article:
◼ One page—single space paragraphs, double space
between paragraphs.
◼ Give the source, like in a bibliography.
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