TQM-Principles and Practices Total Quality Management (TQM) is the application of quantitative methods and human resources to improve all the processes within an organization and exceed customer needs now and in the future. The purpose of TQM is to provide a quality product to customers, which will, in turn, increase the productivity and lower cost. TQM allows the organization to achieve the business objectives of profit and growth. Job Security. TQM creates a satisfying place to work.

A company will not begin the transformation to TQM until it is aware that the quality of the product or service must be improved. TQM requires a cultural change. TQM is mandated by the customer. TQM is better way to run a business and compete in domestic and word markets. Quality is first among equal cost and service. Improvements in quality lead directly to increased productivity. Quality involves the design of the product and the process. TQM is not something that will occur overnight, it takes a long time to build the appropriate emphasis and techniques into the culture.

The Road to Business Growth Clear Vision Customer Satisfaction Leadership Process Orientation Focus on Quality Employee Involvement Supplier Partnering Continuous Improvement Business Growth 3

TQM Six Basic Concepts Leadership Customer Satisfaction Employee Involvement Continuous Process Improvement Supplier Partnership Performances Measures

LEADERSHIP The ability to positively influence people and systems to have a meaningful impact and achieve results. Quality is the responsibility of everyone in the organization, but ultimate responsibility is CEO. Leadership System: Refers to how decisions are made, communicated, and carried out at all levels; mechanisms for leadership development, self-examination, and improvement. Effectiveness of leadership system depends in part on its organizational structure.

Leadership Characteristics: Give priority attention to external and internal customers and their needs. Empower, not control subordinates. Provide resources, training, and work environment to help them do their job. Emphasize improvement rather than maintenance. Emphasize prevention. Encourage collaboration rather than competition. Train and coach, rather than direct and supervise. Learn from problem – opportunity for improvement. Improve communications. Demonstrate their commitment to quality. Choose suppliers on the basis of quality, not price. Establish organizational systems to support the quality effort. Encourage and recognize team effort.

Implementation: Begins with the Senior Management’s and the CEO’s commitment. Top/Senior Management must be educated on TQM concepts. Visits to TQM companies, read books, attend seminars. Need roadmap/framework for implementation – consider timing (any crisis). Formation of the Quality Council – policies, strategies, programmes. Development of Core Values, Vision Statement, Mission Statement, Quality Policy Statement.

CUSTOMER SATISFACTION Who is the Customer? External Customer - those who receive the final products. Occurs normally at the organizational level. Internal Customers - occur at the process and cross-departmental levels within the company. Customer is always right – in JAPAN customer is “KING” Identifying Customers: What parts or products are produced? Who uses our parts or products? Who do we call, correspond/interact with? Who supplied the inputs to the process? Customer expectations constantly changing – 10 years ago acceptable, now not any more!

Checklist to improve satisfaction: Who are my customers? What do they need? What are their measures and expectations? How is my product or service? Does my product or service exceed expectations? How do I satisfy those needs? What corrective action is necessary? Are customers included on teams? Customer feedback: Warranty cards and questionnaire. Telephone/Mail surveys. Focus groups. Customer complaints. Customer Satisfaction Index. Monitoring the Internet.

Customer complaints: Discover customer dissatisfaction. Discover priorities of quality, price, delivery. Compare performance with competitors. Identify customer’s needs. Determine opportunities for improvement.

EMPLOYEE INVOLVEMENT ……. any activity by which employees participate in work-related decisions and improvement activities, with the objectives of tapping the creative energies of all employees and improving their motivation. Deming – 15% operator errors, 85% management system. Education and training – life long, continuous both knowledge and skills. Suggestion schemes; Kaizen, 5S teams. Motivational programmes, incentive schemes. Conducive work culture, right attitude, commitment.

Continuous Process Improvement The Goal is to achieve perfection: View all work as process (purchasing, design, invoicing, scrap reduction, etc.) – production and business. Inputs – PROCESS – Outputs (see Figure). Make all processes effective, efficient, and adaptable. Problem –Solving Method: Identify the opportunity. Analyze the current process. Develop the optimal solution(s). Implement changes. Study the results. Standardize the solution. Plan for the future.

Input/Output Process Model FEEDBACK PROCESS People Equipment Method Procedures Environment Materials OUTPUT Information Data Product Service, etc. INPUT Materials Money Information Data, etc OUTCOMES CONDITIONS

Identify the opportunity: Phase 1 – Identify problems. Use Pareto Analysis – external and internal failures, returns. Phase 2 – Form a team (select team leader and determine goals and datelines). Phase 3 – Define scope of problem (paint process – data collected for a week showed high 30% “runs” defect). Analyze the current process: Understand the current process, how it is performed. Develop a process flow diagram. Define target performance measures. Collect all available data and information. Determine causes not solution (use cause and effect diagram). Determine the root cause.

Develop the optimal solution(s): Determine possible solutions. Recommended optimal solution to improve process. Create new process, combine different process, modify existing process. Creativity (rubber pad adhesive, door trim). Evaluate and testing of ideas/possible solutions. Implement changes: To prepare implementation plan, obtain approval, conduct process improvements, study results. Why is it done? How, Where, Who, When it will be done? Study the results/Standardize the solution/Plan for the future: Measure and evaluate results of changes. Standardize solution – certify process, operator, done? Next project/problem areas.

SUPPLIER PARTNERSHIP - Defects/Percent non-conforming. 40% product or service cost comes from procurement, therefore supplier Quality Management important. Substantial portion quality problems from suppliers. Need partnership to achieve quality improvement – long-term purchase contract. Define product/program requirements: 1. Evaluate potential and select the best suppliers. 2. Conduct joint quality planning and execution. 3. Require statistical evidence of quality. 4. Certify suppliers, e.g. ISO 9000. 5. Develop and apply Supplier Quality Ratings. - Defects/Percent non-conforming. - Price and Quality costs. - Delivery and Service.

PERFORMANCE MEASURES Managing by fact rather than gut feelings. Effective management requires measuring. e.g. Production measures – defects per million, inventory turns, on-time delivery. Service – billing error, sales, activity times. Cost of Poor Quality: Prevention Costs - Costs of minimizing failure and appraisal costs. Appraisal Costs - Costs of determining the degree of conformance to quality requirements Internal Failure Costs - Costs resulting from defects found before the customer receives the product or service External Failure Costs - Costs resulting from defects found after the customer receives the product or service.

Award Models (MBNQA, EFQM, PMQA) - Award criteria. - Scoring Benchmarking – grade to competitors, or best practice. Statistical measures – control charts, Cpk. Certifications: - ISO 9000:2000 Quality Management System. - ISO 14000 Environmental Management System. - QS 9000, ISO/TS 16949.

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