TOTAL QUALITY MANAGEMENT (TQM)

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 Topic 1

The Foundations – A Model

for TQM

Presented By:
Assoc. Prof. Dr. Nor Hayati
Saad
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 Main Content:
1. Introduction, History, Production System
2. Understanding Quality
3. Commitment and Leadership: TQM
approach, Commitment & Policy, Creating a
Culture, TQM Model
4. Design For Quality: Design Control &
Management, Specifications & Standard
5. Focus on the Customer
6. Learning from the Quality Gurus
7. Baldrige Awards, Deming Prize
8. Six Sigma
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 INTRODUCTION,
HISTORY, PRODUCTION
SYSTEM

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 HISTORY / History of Quality Assurance
-Industrial Revolution in 1800’s: rise of inspection and
separate quality departments
- Scientific Management – Frederick Taylor 1900’s
- Bell Telephone Laboratories 1920’s; Statistical Quality
Control
- Global Competition 1970’s – 1980’s – Japan
- Quality Revolution 1980 – Deming
- Malcolm Baldrige National Quality Award (1987)
- Quality is a requirement for success in today’s global
market 1997
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HISTORY / History of Quality
Assurance (cont.)

 - Skilled craftsmanship during Middle Ages

 - Quality control during World War II
 - Quality awareness in manufacturing industry
during 1980s: “Total Quality Management”
 - Quality in service industries, government, health
care, and education
 - Current and future challenge: keep progress in
quality management alive

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 PRODUCTION
SYSTEMS

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 What is a SYSTEM
A system is a group of related parts that works
together to achieve a goal.

The goal is whatever the system is supposed to

do.

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 Classification of SYSTEMS

Systems

Natural Systems Technological Systems

Human Being Animals Plants Others Organizations Products

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 Subsystems
A system can have many parts. Subsystems are
smaller systems that are combined to produce
larger systems.

Example:
System.... Computer
Subsystems... Keyboard, disk drive, monitor, printer,
etc

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 The Universal Systems Model
The universal systems model can be applied to all technological
systems and to many natural systems.

A system needs a goal that describes the purpose of the

system. All systems also have an input, process, and output.

INPUT PROCESS OUTPUT

Resources put into Combines What comes from

the system resources the system

WHAT IS PRODUCTION SYSTEM??

11 WHERE CAN YOU DETECT THE ‘QUALITY’?
 Input
Input includes anything that is put into system. The input comes
from the resources.
A resource is anything that provides supplies or support for the
system.
All technological systems requires input from 7 categories of
resources.

People Information Energy Capital

Materials Tools and Time

machines

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 Process
Process is a series of actions leading to an outcome.
Process transforms resources into product or service.
This is where resources are combined.

Production processes usually have 2 major subsystems:

Management and Production

INPUT PROCESS OUTPUT

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 Major Subsystems of Process
INPUT PROCESS OUTPUT

Managing Producing

Planning Preprocessing

Organizing Processing

Controlling Postprocessing

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 Output
Output is the result of a system.

Example:
Tv, computer, table, car, vegetables, meals..
Education, maintenance, catering..

 All these outputs are planned and desirable.

 Undesirable outputs from production systems include air and
water pollution, chemicals that are difficult to dispose of , and noise.

 Waste materials are another kind of output produced by most

systems. Therefore, companies want to reduce or eliminate waste.

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 Feedback
Feedback occurs when information about the output
of a system is sent back to the system.
Feedback can improve the performance of a system.

INPUT PROCESS OUTPUT

FEEDBACK

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 Production Systems
The goal of a production system is to manufacture or
construct products.

Clothes, appliances, books Manufacturing

Building, road, bridge Construction

Two kinds of outputs could be produced:

Good or Service

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 Characteristics of Goods
• Tangible product
• Consistent product
definition
• Production usually
separate from
consumption
• Can be inventoried
• High/ Low customer
interaction © 1995 Corel Corp.

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 Characteristics of Service
• Intangible product
• Produced & consumed
at same time
• Often unique
• High customer
interaction
• Inconsistent product
definition
• Often knowledge-based
© 1995 Corel Corp.

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 Goods Versus Services
Goods Service
 Can be resold • Reselling unusual
 Can be inventoried • Difficult to inventory
 Some aspects of quality • Quality difficult to measure
measurable
• Selling is part of service
 Selling is distinct from
production
• Provider, not product is
 Product is transportable transportable
 Site of facility important for • Site of facility important for
customer contact
cost
• Often difficult to automate
 Often easy to automate
• Revenue generated
 Revenue generated primarily from intangible
primarily from tangible service.
product
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 Goods

HOW & WHY DO YOU

SEGREGATE DIFFERENT
TYPE OF PRODUCT IN THE
MARKET?

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 UNDERSTANDING
QUALITY

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 QUALITY?

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 Modern Importance of Quality

“The first job we have is to turn out quality

merchandise that consumers will buy and
keep on buying. If we produce it efficiently
and economically, we will earn a profit, in
which you will share.”
- William Cooper Procter
[American Businessman, a manufacturer who established the nation's first profit-sharing
plan for employees]
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Defining Quality

ASQC (American Society for Quality Control)- “quality is a

subjective term for which each person has his or
her own definition”

What’s your definition?

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Defining Quality
In technical usage, quality can have two
meanings:
 the characteristics of a product or service
that bear on its ability to satisfy stated or
implied needs, and

 a product or service free of deficiencies

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Defining Quality - “Gurus”
 Deming - “non-faulty systems”
 Out of the Crisis
 Juran - “fitness for use”
 Quality Control Handbook
 Crosby - “conformance to requirements”
 Quality is Free

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 Armand Feigenbaum -
author: Total Quality Control (1961)

“qualityis a customer determination based on

the customer’s actual experience with the
product or service, measured against his or
her requirements - stated or unstated,
conscious or merely sensed, technically
operational or entirely subjective - and always
representing a moving target in a competitive
market.”

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 Stout’s View

Quality = Performance
Expectation

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 Defining Quality
Definition of Quality by managers of 86 firms:

 -Perfection
 -Consistency
 -Eliminating waste
 -Speed of delivery
 -Compliances with policies and procedures
 -Providing a good, usable product
 -Doing it right the first time
 -Delighting and pleasing customers
 -Total customer services and satisfaction

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Defining Quality- (3) Different Views
 Customer’s view (more subjective)
 the quality of the design (look, feel, function)
 product does what’s intended and lasts
 Producer’s view
 conformance to requirements (Crosby)
 costs of quality (prevention, scrap, warranty)
 increasing conformance raises profits
 Government’s view
 products should be safe
 not harmful to environment

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 Five (5) Types of Product Quality

 Transcendent/ Inspiring Quality

 Inherent value or innate excellence apparent to the
individual.
 Product-Based Quality
 The presence or absence of a given product attribute.
 User-Based Quality
 Quality of the product as determined by its ability to
meet the user’s expectations.

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 Five Types of Product Quality
(cont’d)

 Manufacturing-Based Quality
 How well the product conforms to its design
specification or blueprint.
 Value-Based Quality
 How much value each customer separately attributes
to the product in calculating their personal cost-benefit
ratio.

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 Transcendent (Judgemental)
definition of Quality

Excellence
You just know it when you see it..

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 Product-based definition
Quantities of product attributes

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 User-based definition
Fitness for intended use.
How well the product fit to its intended
use.
Satisfying customer needs

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 Value-based definition
Relationship of usefulness or satisfaction to
price.

Quality vs. price

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Value-based Approach
 Manufacturing  Service dimensions
dimensions
 Reliability
 Performance
 Responsiveness
 Features
 Assurance
 Reliability
 Conformance  Empathy
 Durability  Tangibles
 Serviceability
 Aesthetics
 Perceived quality

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 Manufacturing-based definition
Conformance to specifications, or desirable
outcome of the engineering and
manufacturing practice.
Targets and tolerances: 236 +/- 0.3cm

Same taste
everytime,
everywhere
On time arrival
10:30 pm
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COMMITMENT & LEADERSHIP
(TQM APPROACH), DESIGN
FOR QUALITY & CUSTOMER
FOCUS
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 Quality Perspectives
transcendent &
product-based user-based
needs
Marketing
Customer

value-based Design
products
and manufacturing-
based
services
Manufacturing
Distribution

Information flow
41 Product flow
 Shift to Quality

Isolated Global
Economies Period of Economy
change from
Focus on quantity to Focus on
quantity quality Quality & Quantity

Pre-World War II 1945 1990’s

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 Customer-Driven Quality

 “Meeting or exceeding customer

expectations”
 Customers can be...
 Consumers
 External customers
 Internal customers

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 Unique Challenges for Service
Providers
Strategic Service Challenge
 To anticipate and exceed customer’s expectations.
 Distinctive service characteristics
1. Customers participate directly in the production process.
2. Services are consumed immediately and cannot be stored.
3. Services are provided where and when the customer
desires.
4. Services tend to be labor intensive.
5. Services are intangible.

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 Service Providers
 WHAT ARE EXAMPLES OF
CRITICAL SERVICE FOR
CUSTOMERS?

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 Total Quality
 - Customer satisfaction and reducing costs
 - A systems approach that integrates organizational
functions and the entire supply chain
 - Stresses learning and adaptation to change
 - Based on the scientific method

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 Deming’s View of a
Production System
Suppliers of
materials and Design and
equipment Redesign
Consumer
Receipt and test research
of materials

Consumers
A
B Production, assembly
inspection
C
Distribution
D
Tests of processes, machines, methods

INPUTS PROCESSES OUTPUTS

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 Three Levels of Quality
 Organizational level: meeting
external customer requirements
 Process level: linking external and
internal customer requirements
 Performer/job level: meeting internal
customer requirements

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 Organizational Level
External customer requirements.
Questions are:
 Which product and service meet your
expectations
 Which do not.
 What product and services do you need that you
are receiving.
 What product and services do not need that you
are receiving.

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 Process Level
Organizational units are classified as functions or
departments.
Questions:
 What product and services are most important to the
external customer
 What process produces those products and services
 What are the key inputs to the process
 Which processes have the most significant effects on
the organization customer-driven performance
standards
 Who are my internal customers and what are their
needs

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 Performer / Job Level
Standards (Accuracy, completeness, innovation, timeliness and cost) for
output must be based on quality and customer
requirements.
Questions:
 What is required by the customer, both internal and
external
 How can requirements are measured
 What is the specific standards for each level

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 PRINCIPLES OF TOTAL QUALITY
MANAGEMENT

TQM conveys a company-wide effort that

includes all employees, suppliers, and
customers, and that seeks to continuously
improve the quality of products/services and
processes to meet the needs and
expectations of customers.

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 Attributes to TQM
• Customer focus (what)

• Commitment and Leadership (who)

• Strategic Planning (how-approach based)

• Continuous Improvement (when-time based)

• Empowerment and Teamwork (how-approach)

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 Attributes to TQM

IN A SMALL GROUP,
DISCUSS THE ATTRIBUTES/
FEATURES OF TQM

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 Customer Focus
• Customer judge of quality

• Service package

• Customer relationship

• Internal customer

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 Commitment and
Leadership

• Long term commitment

• leadership for quality
• Organisation’s team TQM team leaders
• Overcome resistance to change
• Strong quality focus

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 Strategic Planning?

+ Environmental analysis

+ Company Vision

+ Determine corporate mission

+ Form a strategy:
•Plan-Do-check-act
•Critical success factors
•Plan (milestone, person in charge, resources)
•Review the cycle
•Learning from the previous experience.
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 Continuous Improvement

+ Enhancing value to the customer throughout

new and improve products and services

+ Reducing errors, defects and wastes

+ Improving responsiveness and cycle time

performance

+ Improving productivity and effectiveness in use of

all resources

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 Empowerment and Teamwork?

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 Focus on customer: 3 Classes
of Customer Needs
~ Dissatisfiers : those needs that are
expected in a good or service

~ Satisfiers : needs that customers say

they want

~ Delighters : new and improve

features that customers do not expect

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DESIGN FOR QUALITY
 Product or Service Design Activities
1. Translate customer wants and needs into
product and service requirements
2. Refine existing products and services
3. Develop new products and services
4. Formulate quality goals
5. Formulate cost targets
6. Construct and test prototypes
7. Document specifications

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 Reasons for Product or Service Design
 Economic

 Social and demographic

 Political, liability, or legal

 Competitive

 Cost or availability

 Technological

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 Objectives of Product and Service
Design
 Main focus
 Customer satisfaction
 Understand what the customer wants
 Secondary focus
 Function of product/service
 Cost/profit
 Quality
 Appearance
 Ease of production/assembly
 Ease of maintenance/service

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 Designing For Operations
 Taking into account the capabilities of the
organization in designing goods and services.
 Failure to take this into account can:
 Reduce productivity
 Reduce quality
 Increase costs

65 4-65
 Legal, Ethical, and
Environmental Issues
 Legal
 Agri-Food and Veterinary Authority, Health Sciences
Authority (Singapore)
 Product liability
 Uniform commercial code
 Ethical
 Releasing products with defects
 Environmental
 Pollution
 Toxic materials

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Regulations and Legal Considerations
 Product Liability: A manufacturer is liable for any
injuries or damages caused by a faulty product.
 Uniform Commercial Code: Products carry an
implication of merchantability and fitness.

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Designers Adhere to Guidelines
 Produce designs that are consistent with the goals
of the company
 Give customers the value they expect
 Make health and safety a primary concern
 Consider potential harm to the environment

68 4-68
 Other Issues in Product and
Service Design
 Product/service life cycles
 Degree of standardization
 Mass customization
 Product/service reliability
 Robustness of design
 Degree of newness
 Cultural differences
 Global Product Design

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 Life Cycles of Products or Services
Figure 4.1

Saturation

Maturity
Demand

Decline
Growth

Introduction

Time
70 4-70
Standardization
 Standardization
 Extent to which there is an absence of variety in a
product, service, or process
 Standardized products are immediately available to
customers

4-71
 Advantages of Standardization
 Fewer parts to deal with in inventory and
manufacturing
 Design costs are generally lower

 Reduced training costs and time

 More routine purchasing, handling, and inspection

procedures
 Quality is more consistent

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 Advantages of Standardization
 Orders fillable from inventory
 Opportunities for long production runs
and automation
 Need for fewer parts justifies increased
expenditures on perfecting designs and
improving quality control procedures

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 Disadvantages of Standardization
 Designs may be frozen with too many
imperfections remaining
 High cost of design changes increases resistance
to improvements
 Decreased variety results in less consumer appeal

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PRODUCT DESIGN - revision
 Product Decision

The objective of the product decision

is to develop and implement a
product strategy that meets the
demands of the marketplace with a
competitive advantage

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 Product Decision
 The good or service the organization
provides society
 Top organizations typically focus on
core products
 Customers buy satisfaction, not just
a physical good or particular service
 Fundamental to an organization's
strategy with implications throughout
the operations function
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 Product Strategy Options

 Differentiation
 Shouldice Hospital
 Low cost
 Taco Bell
 Rapid response
 Toyota

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 Product Life Cycles

 May be any length from a few

hours to decades
 The operations function must
be able to introduce new
products successfully

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 Sales, cost, and cash flow
Product Life Cycles
Cost of development and production
Sales revenue
Net revenue (profit)

Cash
flow

Negative
cash flow Loss

Introduction Growth Maturity Decline

Figure 5.1
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 Product Life Cycle
Introductory Phase
 Fine tuning may warrant
unusual expenses for
1. Research
2. Product development
3. Process modification and
enhancement
4. Supplier development

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 Product Life Cycle

Growth Phase

 Product design begins to

stabilize
 Effective forecasting of
capacity becomes necessary
 Adding or enhancing capacity
may be necessary

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 Product Life Cycle
Maturity Phase

 Competitors now established

 High volume, innovative
production may be needed
 Improved cost control,
reduction in options, paring
down of product line

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 Product Life Cycle

Decline Phase

 Unless product makes a

special contribution to the
organization, must plan to
terminate offering

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 Product Life Cycle Costs
100 –
Costs committed

80 –
Percent of total cost

60 –
Costs incurred

40 –

20 –
Ease of change

0–

Concept Detailed Manufacturing Distribution,

design design service,
prototype and disposal
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 New Product Opportunities
1. Understanding the
customer
2. Economic change
3. Sociological and
demographic change
4. Technological change
5. Political/legal change
6. Market practice, professional
standards, suppliers, distributors
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 Manufacturability and
Value Engineering
 Benefits:
1. Reduced complexity of products
2. Reduction of environmental impact
3. Additional standardization of products
4. Improved functional aspects of product
5. Improved job design and job safety
6. Improved maintainability (serviceability) of
the product
7. Robust design

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 Cost Reduction of a Bracket
via Value Engineering

88 Figure 5.5
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 Issues for Product
Development
 Robust design
 Modular design
 Computer-aided design (CAD)
 Computer-aided manufacturing (CAM)
 Virtual reality technology
 Value analysis
 Environmentally friendly design

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 Robust Design

 Product is designed so that

small variations in production
or assembly do not adversely
affect the product
 Typically results in lower cost
and higher quality

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 Modular Design

 Products designed in easily

segmented components
 Adds flexibility to both production
and marketing
 Improved ability to satisfy customer
requirements

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 Computer Aided Design
(CAD)
 Using computers to
design products and
prepare engineering
documentation
 Shorter development
cycles, improved
accuracy, lower cost
 Information and
designs can be
deployed worldwide
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 Extensions of CAD
 Design for Manufacturing and Assembly
(DFMA)
 Solve manufacturing problems during the
design stage
 3-D Object Modeling
 Small prototype
development
 CAD through the
internet
 International data
exchange through STEP
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 Computer-Aided
Manufacturing (CAM)
 Utilizing specialized computers
and program to control
manufacturing equipment
 Often driven by the CAD system
(CAD/CAM)

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 Virtual Reality Technology
 Computer technology used to
develop an interactive, 3-D model of
a product from the basic CAD data
 Allows people to „see‟ the finished
design before a physical model is
built
 Very effective in large-scale designs
such as plant layout

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 Value Analysis

 Focuses on design improvement

during production
 Seeks improvements leading either
to a better product or a product
which can be produced more
economically with less
environmental impact

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 Ethics, Environmentally
Friendly Designs, and
Sustainability
 It is possible to enhance productivity
and deliver goods and services in an
environmentally and ethically
responsible manner
 In OM, sustainability means
ecological stability
 Conservation and renewal of
resources through the entire product
life cycle
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 Ethics, Environmentally
Friendly Designs, and
Sustainability
 Design
 Polyester film and shoes
 Production
 Prevention in production and
packaging
 Destruction
 Recycling in automobiles
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 Ethics, Environmentally
Friendly Designs, and
Sustainability

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 The Ethical Approach

 View product design from a

systems perspective
 Inputs, processes, outputs
 Costs to the firm/costs to
society
 Consider the entire life cycle of
the product

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 The Ethical Approach
 Goals
1. Developing safe end
environmentally sound practices
2. Minimizing waste of resources
3. Reducing environmental liabilities
4. Increasing cost-effectiveness of
complying with environmental
regulations
5. Begin recognized as a good
corporate citizen
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 Guidelines for Environmentally
Friendly Designs
1. Make products recyclable
2. Use recycled materials
3. Use less harmful ingredients
4. Use lighter components
5. Use less energy
6. Use less material
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 Laws and Industry
Standards
For Design …

 Food and Drug Administration

 Consumer Products Safety
Commission
 National Highway Safety
Administration
 Children’s Product Safety Act
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 Laws and Industry
Standards
For Manufacture/Assembly …
 Occupational Safety and Health
Administration
 Environmental Protection Agency
 Professional ergonomic standards
 State and local laws dealing with
employment standards, discrimination,
etc.
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 Laws and Industry
Standards
For Disassembly/Disposal …

 Vehicle Recycling Partnership

 Increasingly rigid laws
worldwide

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 Product Documents
 Engineering drawing
 Shows dimensions, tolerances, and
materials
 Shows codes for Group Technology
 Bill of Material
 Lists components, quantities and
where used
 Shows product structure

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 Engineering Drawings

Figure 5.8

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 Bills of Material
BOM for Panel Weldment

NUMBER DESCRIPTION QTY

A 60-71 PANEL WELDM’T 1
A 60-7 LOWER ROLLER ASSM. 1
R 60-17 ROLLER 1
R 60-428 PIN 1
P 60-2 LOCKNUT 1
A 60-72 GUIDE ASSM. REAR 1
R 60-57-1 SUPPORT ANGLE 1
A 60-4 ROLLER ASSM. 1
02-50-1150 BOLT 1
A 60-73 GUIDE ASSM. FRONT 1
A 60-74 SUPPORT WELDM’T 1
R 60-99 WEAR PLATE 1
02-50-1150 BOLT 1 Figure 5.9 (a)
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 Bills of Material
DESCRIPTION QTY
Hard Rock
Bun 1
Cafe’s Hickory Hamburger patty 8 oz.
BBQ Bacon Cheddar cheese 2 slices
Cheeseburger Bacon 2 strips
BBQ onions 1/2 cup
Hickory BBQ sauce 1 oz.
Burger set
Lettuce 1 leaf
Tomato 1 slice
Red onion 4 rings
Pickle 1 slice
French fries 5 oz.
Seasoned salt 1 tsp.
11-inch plate 1
HRC flag 1
Figure 5.9 (b)
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 Documents for Production

 Assembly drawing
 Assembly chart
 Route sheet
 Work order
 Engineering change notices (ECNs)

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 Assembly Drawing

 Shows
exploded view
of product
 Details relative
locations to
show how to
assemble the
product

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Figure 5.11 (a)
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 Assembly Chart
R 209 Angle
1
Left
R 207 Angle SA bracket A1 Identifies the point of
2 1 assembly production where
Bolts w/nuts (2)
3 components flow into
R 209 Angle subassemblies and
4
Right
ultimately into the final
R 207 Angle SA bracket A2 product
5 2 assembly
Bolts w/nuts (2)
6
Bolt w/nut
7
R 404 Roller
8 A3
Lock washer Poka-yoke
9 inspection
Part number tag
10 A4
Box w/packing material
11 A5

112 Figure 5.11 (b)

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 Route Sheet
Lists the operations and times
required to produce a component
Setup Operation
Process Machine Operations Time Time/Unit
1 Auto Insert 2 Insert Component 1.5 .4
Set 56
2 Manual Insert Component .5 2.3
Insert 1 Set 12C
3 Wave Solder Solder all 1.5 4.1
components
to board
4 Test 4 Circuit integrity .25 .5
test 4GY

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 Work Order
Instructions to produce a given
quantity of a particular item, usually to
a schedule
Work Order

Item Quantity Start Date Due Date

157C 125 5/2/08 5/4/08

Production Delivery
Dept Location

F32 Dept K11

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 Engineering Change Notice
(ECN)
 A correction or modification to a
product’s definition or
documentation
 Engineering drawings
 Bill of material

Quite common with long product life

cycles, long manufacturing lead times,
or rapidly changing technologies
115
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 Transition to Production
 Know when to move to production
 Product development can be viewed as
evolutionary and never complete
 Product must move from design to
production in a timely manner
 Most products have a trial production
period to insure producibility
 Develop tooling, quality control, training
 Ensures successful production

116
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 Transition to Production
 Responsibility must also transition as the
product moves through its life cycle
 Line management takes over from design
 Three common approaches to managing
transition
 Project managers
 Product development teams
 Integrate product development and
manufacturing organizations

117
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 LEARNING FROM THE
QUALITY GURUS

118
Quality - “Gurus”

 WHO IS QUALITY GURUS?

HOW THEY DEFINE THE
QUALITY?

119
 Learning from Quality Gurus:
Quality Advocates
 U.S. Quality Innovators:
 - Walter Shewhart
 - W. Edwards Deming
 - Joseph M. Juran
 - Armand V Feingenbaum
 - Philip Crosby (1980s)
 Japanese Quality Innovators:
 - Kaoru Ishikawa
 - Genichi Taguchi (1960s - 1980s)

120
 Walter A Shewhart
 Walter Andrew Shewhart (March 18, 1891 - March 11,
1967)
 an American Physicist, engineer and statistician,
sometimes known as the father of statistical quality
control.
Shewhart worked to advance the thinking at Bell
Telephone Laboratories from their foundation in 1925
until his retirement in 1956, publishing a series of papers
in the Bell System Technical Journal.
 Pioneer of modern quality control:
-recognized the need to separate variation into assignable
and unassignable causes (defined “in control”.)
-“founder of the control chart” (e.g. X-bar and R chart).
121 -originator of the plan-do-check-act cycle.
 -perhaps the first to successfully integrate statistics,
engineering, and economics.
-defined quality in terms of objective and subjective
quality:
- objective quality: quality of a thing independent of
people.
- subjective quality: quality is relative to how people
perceive it. (value)

• His work was summarized in his book Economic

Control of Quality of Manufactured Product (1931).
Shewhart’s charts were adopted by the American Society
for Testing and Material (ASTM) in 1933 and advocated
to improve production during World War ll in American
War Standards Z1.1-1941, Z1.2-1941 and Z1.3-1942.

122
 W. Edwards Deming
 William Edwards Deming (October 14, 1900 – December 20,
1993) was an American Statistician, professor, author, lecturer
and consultant.
 He perhaps best known for his work in Japan.
 Deming received a BSc in electrical engineering from the
University of Wyoming at Laramie(1921), a M.S. from the
University of Colorado (1925), and a Ph.D from Yale University
(1928). Both graduate degrees were in mathematics and
physics.
 From1950 onward, he taught top management how to improve
design (and thus service), product quality, testing, and sales
(the last through global markets) through various methods,
including the application of statistical methods.

123
 Studied under Shewhart at Bell Laboratories.

• Contributions: – well known for helping Japanese

companies apply Shewhart’s statistical process control.
• Japanese scientists and engineers named the famed
Deming Prize after him. It is bestowed on organizations that
apply and achieve stringent quality-performance criteria.
Main contribution is his Fourteen Points to Quality:
• create constancy of purpose.
• cease dependence on inspection to improve quality
• drive out fear and build employee trust.
• seek long-term supplier relationship
• eliminate numerical goals; substitute leadership
(abolish annual rating or merit system).
• eliminate slogans, exhortations, and work-force
targets
124
 Major Tenets/view of Deming’s Philosophy

 # Workers can only correct 15% of the quality

problems.
The other 85% are management’s
responsibility, because they are due to the
system.

 # The production system must be stable for

quality to be realised. This can be tested with
statistical process control charts.

125
 Major Tenets/ view of Deming’s Philosophy

 # Quality is the continuous, incremental

improvement of a stable system.

 # Quality cannot be “inspected into products”;

It must be “designed in through the products
and process design.”

126
 Major Tenets/ view of Deming’s Philosophy

 # Teamwork and training in quality are

critical weapons in striving for
improvement.
Workers must have the right tools to
monitor and improve quality.

127
 Deming’s Profound Knowledge
Deming stated that System of Profound Knowledge (SoPK)
consisted of the following four main subheadings:

 1. Knowledge of Systems; i.e., understanding that all the parts of a

business are related in such a way that if you focus on optimizing
one part, other parts may suffer.

 2. Knowledge of Variation; i.e., knowledge of common cause and

special variation.

 3. Theory of Knowledge; i.e., how we learn things.

 4. Knowledge of Psychology; i.e., what motivates people.

128
 Joseph M. Juran
 Contributions:
– also well-known for helping to improve Japanese
quality.
– directed most of his work at executives and the field
of quality management.
- developed the “Juran Trilogy” for managing quality:
 Quality planning, quality control, and quality
improvement.

129
 Feigenbaum
 Developed the concept of Total Quality Control.
 System for managing the entire value-chain connecting
supplier to customer.
 His Three Steps to Quality are quality leadership,
modern quality technology and organisational
commitment.
 “If you want to find out about your quality, go out and
ask your customer.”
 Quality control staff = Facilitators.

130
 Philip Crosby
 Quality management advocate/ promoter,
consultant, and author.
 Quality is Free
 The four absolutes of quality including:
 #1- quality is defined by conformance to requirements, not
“goodness”.
 #2 - system for causing quality is prevention not appraisal.
 #3 - performance standard is zero defects, not “that’s close
enough.”
 #4 - measurement of quality is the price of nonconformance,
not indexes.

131
 Kaoru Ishikawa
 Contributions:
- Considered as Japan’s leading figure in the area of
TQM.
 His inspiration came from the work of Deming and
Juran, and to a lesser extend, Feingenbaum.
 Developed concept of true and substitute quality
characteristics
-true characteristics are the customer’s view
-substitute characteristics are the producer’s view
-Degree of match between true and substitute
ultimately determines customer satisfaction.
132
 • He is the originator of Fishbone Diagrams or
Ishikawa diagrams which are now used world-
wide in continuous improvement to represent
cause - effect analysis.
• Advocate of the use of the 7 tools
• Advanced the use of quality control circles,
QCC (worker quality teams).
• Respect for humanity as a management
philosophy - full participation.
• Cross-functional management.

133
 Genichi Taguchi
 Contributions:
 Taguchi methods emphasize consistency of
performance and reduced variation
 Quality loss function (deviation from target is a loss to
society).
 Parameter design (robust engineering) which is an
application of Design of Experiments:
 Identify key variables
 Reduce variation on the important variables
 Open up tolerances on unimportant variables

134
 MALCOM BALDRIDGE
NATIONAL QUALITY
AWARD & DEMING
PRIZE
135
 MALCOLM BALDRIGE NATIONAL
QUALITY AWARD

The Baldrige National Quality Program and the

associated award were established by the Malcolm
Baldrige National Quality Improvement Act of
1987.

The program and award were named for Malcolm

Baldrige, who served as United States Secretary
of Commerce during the Reagan administration,
from 1981 until Baldrige’s 1987 death in a rodeo
accident.

136
 The Malcolm Baldrige National Quality Award
recognizes U.S. organizations in the business, health
care, education, and nonprofit sectors for performance
excellence.

The Baldrige Award is the only formal recognition of

the performance excellence of both public and private
U.S. organizations given by the President of the United
States.

It is administered by the Baldrige Performance

Excellence Program, which is based at and managed by
the National Institute of Standards and Technology
(NIST),an agency of the U.S. Department of
Commerce.
137
 THE MALCOLM BALDRIDGE NATIONAL
QUALITY AWARD
* Simulate American companies to improve quality
and productivity

* Recognise the achievements of those companies

and set an example for others

* Establish guidelines and criteria for evaluating

quality efforts

* Provide specific guidance for other American

enterprises that wish to learn how to manage
quality
138
 Criteria for winning the Award :

* Senior executive leadership

* Information and analysis

* Strategic quality planning

* Human resource development and management

* Management of process quality

* Quality and operational results

* Customer focus and satisfaction

139
MALCOLM BALDRIGE AWARD RECIPIENTS
 1988 – MOTOROLA INC., GLOBE METALLURGICAL INC.
 1989 – XEROX CORP.
 1990 – CADILLAC MOTOR CAR, IBM, FEDEX.
 1991 – SOLECTRON CORP.
 1992 – AT&T NETWORK SYSTEMS, TEXAS INST.
 1993 – EASTMAN CHEMICAL
 1994 – WAINWRIGHT CORP.
 1995 – ARMSTRONG WORLD, CORNING TELECOM
 1996 – ADAC LABS
 1997 – 3M DENTAL PRODUCTS
 1998 – BOEING
 1999 – STMICROELECTRONICS
 2000 – DANA CORP
 2001 - CLARKE AMERICAN CHECKS, INCORPORATED, SAN ANTONIO;
UNIVERSITY OF WISCONSIN
 2002 - MOTOROLA INC., BRANCH-SMITH PRINTING DIVISION
 2003 - MEDRAD, INC., BOEING AEROSPACE SUPPORT
 2004 - THE BAMA COMPANIES, TEXAS NAMEPLATE COMPANY
 2005 - SUNNY FRESH FOODS, INC., DYNMC DERMOTT PETROLEUM
OPERATIONS.

140
MALCOLM BALDRIGE AWARD RECIPIENTS
2006 - MESA PRODUCTS, INC., NORTH MISSISSIPPI MEDICAL CENTER

2007 - PRO-TEC COATING CO., MERCY HEALTH SYSTEM.

2008 - CARGILL CORN MILLING NORTH AMERICA, IREDELL-STATESVILLE SCHOOLS

2009 - HONEYWELL FEDERAL MANUFACTURING & TECHNOLOGIES, MIDWAY USA,

2010 - MEDRAD, NESTLÉ PURINA PETCARE CO, K&N MANAGEMENT

2011 - HENRY FORD HEALTH SYSTEM, CONCORDIA PUBLISHING HOUSE,

SCHNECK MEDICAL CENTRE, SOUTH CENTRAL FOUNDATION

2012 - LOCKHEED MARTIN MISSILES and FIRE CONTROL Grand Prairie, Texas
(manufacturing); MESA PRODUCTS INC (small business) Tulsa, Okla. ; NORTH
MISSISSIPPI HEALTH SERVICES, Tupelo, Miss. (health care); CITY OF IRVING,
Irving, Texas (nonprofit)

141
 Overview of the
Malcolm Baldrige
National Quality Award
(MBNQA)

142
 What is the MBNQA?
MBNQA is a national quality award program,
created to recognize organizations that:

– have outstanding processes/practices

– practice measurable, continuous improvement

– achieve customer-focused performance

excellence

143
 MBNQA is a business review
Business Review - Inspect what we Expect

A business review is a formal process for evaluating

how an organization operates:

• Have we defined what business we are in? Is it what

we excel at? Is it what the customer needs?

• Do we know who our competitors are, and what

threatens our success?

• Do we have specific actions planned to become the

best at what we do?
144
 • Have we aligned the actions of all our partners and
vendors to ensure we are successful at our stated
objectives?

• Do we have a work environment that promotes

innovation, empowerment, and a quality of work life
that will attract and retain the best talent available?

• Have we documented how we work (processes) so

that we systematically meet customer needs?

145
 What does MBNQA look for?

􀂄 Visionary Leadership
􀂄 Customer-driven excellence
􀂄 Organisation and personal learning
􀂄 Valuing employees and partners
􀂄 Agility/ Rapidly respond to change
􀂄 Focus on the future
􀂄 Managing for innovation
􀂄 Management by fact
􀂄 Social Responsibility
􀂄 Focus on results and creating value
􀂄 systems perspective

146
 What does MBNQA look for?
􀂄 Leadership
􀂄 Strategic Planning
􀂄 Customer Focus Aproach Deployment

􀂄 Information/ Analysis Continuous Improvement (55%)

􀂄 Workforce
􀂄 Processes
􀂄 Results (45%)

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 Deming Prize

• The Deming prize, established in December 1950 in

honor of W. Edward Deming; originally designed to reward
Japanese companies for major advances in quality
management.

• Over the years it has grown, under the guidance of

Japanese Union of Scientists and Engineers (JUSE) to
where it is now also available to non-Japanese companies,
usually operating in Japan, and also to individuals
recognized as having made major contributions to the
advancement of quality.

• Two categories of awards are made annually, the Deming

148
Prize for Individuals and the Deming Application Prize.
149
 Deming Prize Criteria
Broadly, the following considerations are taken into account
for the Deming Application Prize:

•The emphasis of examination is on the implementation of

TQM

•The actual implementation of TQM practices is appreciated

•Usage of advanced statistical methods is not the basis

for success; appreciation and implementation of statistical
methodology are more important

150
 •Similar patterns of evaluation are adopted for both
manufacturing and non-manufacturing companies

•Examination viewpoint criteria provides an overall

picture of TQM.

•Examiners judge features that have been applied

by the company.

151
 The Examination Viewpoint includes:
• Top Management Leadership, Vision, Strategies
• TQM Frameworks
• Quality Assurance Systems
• Management Systems for Business Elements
• Human Resource Development
• Effective Utilisation of Information
• TQM Concepts and Values
• Scientific Methods
• Organisational Powers (Core Technology, Speed, Vitality)
• Contribution to Realisation of Corporate Objectives
152
 Successful companies should score:

• 70 points or higher in the Executive Session

• 70 points or higher as the company average,

excluding the Executive Session

• 50 points or higher for any examined unit of the

company

153
 SIX SIGMA

154
 SIX SIGMA
•Six Sigma is a business management strategy originally
developed by Motorola, USA in 1981. As of 2010, it enjoys
widespread application in many sectors of industry,
although its application is not without controversy.

•Six Sigma seeks to improve the quality of process outputs

by identifying and removing the causes of defects (errors)
and minimizing variability in manufacturing and business
process.
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 • It uses a set of quality management methods, including
statistical method, and creates a special infrastructure of
people within the organization ("Black Belts", "Green
Belts", etc.) who are experts in these methods.
• Each Six Sigma project carried out within an
organization follows a defined sequence of steps and has
quantified targets.
These targets can be financial (cost reduction or profit
increase) or whatever is critical to the customer of that
process (cycle time, safety, delivery, etc.).

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 •The term six sigma originated from terminology
associated with manufacturing, specifically terms
associated with statistical modeling of manufacturing
processes.
• Originally, it referred to the ability of manufacturing
processes to produce a very high proportion of output
within specification.
•The maturity of a manufacturing process can be
described by a sigma rating indicating its yield, or the
percentage of defect-free products it creates.

157
 •A six-sigma process is one in which 99.99966% of the
products manufactured are free of defects, compared
to a one-sigma process in which only 31% are free of
defects.

•Motorola set a goal of "six sigmas" for all of its

manufacturing operations and this goal became a
byword for the management and engineering practices
used to achieve it.

158
 •Six Sigma is a registered service mark and trademark
of Motorola Inc. As of 2006 Motorola reported over
US$17 billion in savings from Six Sigma.

Other early adopters of Six Sigma who achieved well-

publicized success include Honeywell (previously
known as AlliedSignal) and General Electric, where
Jack Welch introduced the method.

159
159
 •By the late 1990s, about two-thirds of the Fortune
500 organizations had begun Six Sigma initiatives
with the aim of reducing costs and improving
quality.

•In recent years, some practitioners have

combined Six Sigma ideas with lean manufacturing
to yield a methodology named Lean Six Sigma.

160
160
 Origin and meaning of the term
“six sigma process”

The term "six sigma process" comes from the notion

that if one has six standard deviations between the
process mean and the nearest specification limit, as
shown in the graph, practically no items will fail to
meet specifications. This is based on the calculation
method employed in process capability studies.

161
161
 •Capability studies measure the number of
standard deviations between the process mean and
the nearest specification limit in sigma units.

•As process standard deviation goes up, or the

mean of the process moves away from the center
of the tolerance, fewer standard deviations will fit
between the mean and the nearest specification
limit, decreasing the sigma number and increasing
the likelihood of items outside specification
162
162
 Origin and meaning of the term
"six sigma process"

Graph of the normal distribution, which underlies the statistical assumptions of the Six
Sigma model. The Greek letter σ (sigma) marks the distance on the horizontal axis
between the mean, µ, and the curve's inflection point. The greater this distance, the greater
is the spread of values encountered. For the curve shown above, µ = 0 and σ = 1. The
upper and lower specification limits (USL, LSL) are at a distance of 6σ from the mean.
Because of the properties of the normal distribution, values lying that far away from the
mean are extremely unlikely. Even if the mean were to move right or left by 1.5σ at some
point in the future (1.5 sigma shift), there is still a good safety cushion. This is why Six
Sigma aims to have processes where the mean is at least 6σ away from the nearest
specification limit
163
163
 Methods
•Six Sigma projects follow two project methodologies inspired
by Deming's Plan-Do-Check-Act (PDCA) Cycle.
•These methodologies, composed of five phases each, bear
the acronyms DMAIC and DMADV

• DMAIC is used for projects aimed at improving an existing

business process.
(Define-Measure-Analyze-Improve-Control)

• DMADV is used for projects aimed at creating new product

or process designs.
164
164 (Define-Measure-Analyze-Design-Verify)
 DMAIC
The DMAIC project methodology has five phases:

Define the problem, the voice of the customer, and

the project goals, specifically.

Measure key aspects of the current process and

collect relevant data.

Analyze the data to investigate and verify cause-

and-effect relationships. Determine what the
relationships are, and attempt to ensure that all
factors have been considered. Seek out root
cause of the defect under investigation.

165
165
 Improve or optimize the current process based
upon data analysis using techniques such as
design of experiments, poka yoke or mistake
proofing, and standard work to create a new,
future state process. Set up pilot runs to establish
process capability.

Control the future state process to ensure that any

deviations from target are corrected before they
result in defects. Control systems are
implemented such as statistical process control,
production boards, and visual workplaces and the
process is continuously monitored.

166
166
 DMADV
The DMADV project methodology, also known as
DFSS ("Design For Six Sigma"), features five
phases:

Define design goals that are consistent with

customer demands and the enterprise strategy.

Measure and identify CTQs (characteristics that

are Critical To Quality), product capabilities,
production process capability, and risks.

167
167
 Analyze to develop and design alternatives,
create a high-level design and evaluate design
capability to select the best design.

Design details, optimize the design, and plan

for design verification. This phase may require
simulations.

Verify the design, set up pilot runs, implement

the production process and hand it over to the
process owner(s).

168
168
 Implementation roles
•One key innovation of Six Sigma involves the
"professionalizing" of quality management functions.
Prior to Six Sigma, quality management in practice was
largely relegated to the production floor and to
statisticians in a separate quality department.
Formal Six Sigma programs borrow martial arts ranking
terminology to define a hierarchy (and career path) that
cuts across all business functions.

169
169
 Six Sigma identifies several key roles for its
successful implementation.

Executive Leadership includes the CEO and

other members of top management.
They are responsible for setting up a vision for Six
Sigma implementation.
They also empower the other role holders with the
freedom and resources to explore new ideas for
breakthrough improvements.

170
170
 Champions take responsibility for Six Sigma
implementation across the organization in an integrated
manner.
The Executive Leadership draws them from upper
management.
Champions also act as mentors to Black Belts.

Master Black Belts, identified by champions, act as in-

house coaches on Six Sigma.
They devote 100% of their time to Six Sigma.
They assist champions and guide Black Belts and Green
Belts.
Apart from statistical tasks, they spend their time on
ensuring consistent application of Six Sigma across various
functions and departments.
171
171
 Black Belts operate under Master Black Belts to apply
Six Sigma methodology to specific projects.

They devote 100% of their time to Six Sigma.

They primarily focus on Six Sigma project execution,

whereas Champions and Master Black Belts focus on
identifying projects/functions for Six Sigma.

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172
 Green Belts are the employees who take up Six
Sigma implementation along with their other job
responsibilities, operating under the guidance of
Black Belts.

Some organizations use additional belt colours, such

as Yellow Belts, for employees that have basic
training in Six Sigma tools.

173
173
 TQM and Six Sigma
The Six Sigma process improvement originated in 1986
from Motorola’s drive towards reducing defects by
minimizing variation in processes through metrics
measurement.

Applications of the Six Sigma project execution

methodology have since expanded to include practices
common in Total Quality Management and Supply Chain
Management, such as increasing customer satisfaction,
and developing closer supplier relationships.

174
174
 The main difference between TQM and Six
Sigma (a newer concept) is the approach.

TQM tries to improve quality by ensuring

conformance to internal requirements, while
Six Sigma focuses on improving quality by
reducing the number of defects and
impurities.

175
175
 The Quality Hierarchy
Incorporates QA/QC activities
Total Quality into company-wide system
aimed
Prevention Management
at satisfying the customer
SPC
Actions to insure products or
Quality Assurance services conform to company
requirements
Operational techniques to make
Quality Control
inspection more efficient and to
Detection SQC reduce the costs of quality.

Inspection Inspect products

176
 Current Practices
* 55% of US businesses use quality as a
performance indicator in 1991

* 70% of Japanese Businesses use quality as a

performance indicator in 1991

* 50% of Japanese businesses always translate

customer expectations in the design of new
products, compared to 40% in Germany and 22%

177
177
in US.
 Cont’d

* Japanese businesses use technology twice

as much as US businesses in meeting
customer expectations.

* 47% of Japanese businesses always use

process simplification compared to 22% of
US businesses.

178
178
 Cont’d
* From about 1960 to 1990, the United States lost 40
percent of its market share to foreign competitors,
while Japan increased its foreign market by 500
percent.

* For the Japanese, the secret to success was the

implementation of systematic quality efforts to
meet or exceed customer requirements and
expectations the first time and every time.
The three basic principles of TQM are to: focus on
achieving customer satisfaction, seek continuous
and longterm improvement in all the organization's
processes and outputs, and take steps to ensure
the full involvement of the entire work force in
improving quality.
179