Total Quality Management Prepared by: Bhakti Joshi Date: January 01, 2015

Industry Characteristics Case Study: Su-Kam Problem Statement Power outages and fluctuations Bad quality power backup appliances Fragmented industry Industry Characteristics Comprised of small local players Presence of large players in electrical and consumer durables but not “Power Backup” industry Opportunity Nascent industry with unorganised players No standardisations and regulations Su-kam initiated innovation & creativity

Case Study: Su-Kam (Contd…) Product Design Visually appealing, light-weighed and shockproof inverters Power backup duration grows from 10 -1 5 minutes to 2- 3 hours Switchover time reduced from 50 – 100 milliseconds to 0 – 5 milliseconds A 250 VA invertor that can run 1 tube light, a fan or 2 CFLs Portable devices for shop-owners and traders Invertor costs about Rs 2000 and Rs 4000 with battery Team Setup UPS industry Cable TV industry and other digital product industry Missile industry

Case Study: Su-Kam (Contd…) Technology Introduced MOSFET (Metal Oxide Semiconductor Field-Effect Transistor), a device used to amplify or switch electronic signals that reduced the size of inverter Sine wave technology that introduced noise-free inverters Plastic body inverters with help of GE plastics Home UPS (Inverter plus UPS) PowerDoc monitoring system that helps in remote monitoring all the larger KVA products Recall Software a remote system through which Su-Kam servicing or maintenance can done without opening the inverter

Case Study: Su-Kam (Contd…) Distribution Local manufacturers were converted into distributors Battery dealers were converted into dealers of Su-kam products Marketing through banners on dhaabas and tea shops across highways. Put names of dhaabas on banners along with Su-kam’s name Advertisement in classified columns and gradually moved to colour and electronic media

TQM: Focus on Root Causes CUSTOMER FOCUS Identify and meet customer needs CONTINUOUS IMPROVEMENT Philosophy of never-ending improvement Employee Empowerment Employees are expected to seek out, identify and correct quality problems USE OF QUALITY TOOLS Ongoing training in the use of quality tools

Focus on Root Causes PRODUCT DESIGN PROCESS MANAGEMENT Products need to be designed to meet customer expectations PROCESS MANAGEMENT Quality should be built in the process; sources of quality problems should be identified and corrected MANAGING SUPPLIER QUALITY Quality concepts must extend to a company’s suppliers

Six Sigma …is a process in which 99.99966% of products manufactured are statistically expected to be free of defects (3.4 defective parts per million) DMAIC Data Intensive; No place for intuition Ways to help meet business’ bottom-lines Implemented with support of champion/process owner DMADV Define Measure, Analyse, Design, Verify Define Measure, Analyse, Improve, Control (Should be used when product is in existence but not performing adequately or as per customer specification) (Should be used when product is not in existence and existing product needs to be optimized/improved)

TQM and Six Sigma - Similarities Quality improvement systems Attempt to reduce variations or poor service Improve customer satisfaction

TQM and Six Sigma - Differences Associated with the development, deployment, and maintenance of organizational systems across various business processes Strategic approach to maintain existing quality standards and making incremental quality improvements.  Views quality as conformance to internal requirements Focus on improving individual operations within unrelated business processes Initiatives are usually a part-time activity that can be managed by non-dedicated managers. Work without fully knowing what the financial gains might be A process improvement program as it is based on concepts that focus on continuous quality improvements  Uses statistical methods (SPC) for monitoring and controlling business processes Focuses on improving quality by reducing the number of defects Focus on improving all the operations within a single business process Require the skills of professionals that are certified as ‘black belts’ Based on a preplanned project charter that outlines the scale of a project, financial targets, anticipated benefits and milestones

Taguchi Methods: Example Company C received an average of 10 complaints per month last year. In November they received 15 complaints (y). Management sets an acceptable level at 2 (tolerance). It costs the company Rs.500 directly per complaint to correct the problems. They determined the cost in lost sales to be Rs. 1000. Total cost per complaint: Rs. 1500

Characteristics of the Company Customer satisfaction Quality loss as loss to society quantified through “Quality Loss Function” Variations from optimal measure results in a loss Product Design Equipment: No breakdowns Specific jobs defined Policies and Procedures – know-how

Formulae L(y) = k(y-m)2 L(y) = Loss k = constant = cost to correct tolerance2 y = reported value m = mean value (average)

Calculation k = Rs1500/22 = Rs375.0 L(y) = 375.0 (15-10)2 = 375.0 (5)2 = 375.0 (25) = Rs. 9375.0 is loss for the month of November

Concept of Quality Loss Use of statistical analysis for quantification Used as a quality control tool to quantify quality during experiments and trial-errors especially in R&D Aims to reduce product variability with a system for developing specifications and designing them into a product or process.

Quality Control A process through which a business seeks to ensure that product quality is maintained or improved and manufacturing errors are reduced or eliminated. Quality control requires the business to create an environment in which both management and employees strive for perfection. This is done by training personnel, creating benchmarks for product quality, and testing products to check for statistically significant variations. Read more: http://www.investopedia.com/terms/q/quality-control.asp#ixzz1hzLDJ9TD

Criticism Discuss in Class

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