1. Total Quality Management - TQM Course Instructor: Memoona Masood Afridi Lecture 2

2. T otal Q uality M anagement

3. A Simplistic View of Total Quality Management T otal Q uality M anagement Total = Everyone in the organization is responsible for quality. Quality = “Those product features which meet the needs of customers and thereby provide product satisfaction." or "freedom from deficiencies.“ Management = Management is a cycle of planning, doing, studying, and acting. All processes undergo the same cycle of management. TQM = Total Quality Management (TQM) is a business management strategy aimed at embedding awareness of quality in all organizational processes.

4. “Total Quality Management” - TQM Core Concept

5. Definition The Institute of Management Services defines Total Quality Management as: "A strategy for improving business performance through the commitment and involvement of all employees to fully satisfying agreed customer requirements, at the optimum overall costs, through the continuous improvement of the products and services, business processes and people involved.“ The concept of Total Quality Management can be expressed as “Achieving success through delighting our customers” Customers being the internal user, the external customer or end-user, together with the other stakeholders, i.e. shareholders employees suppliers It also requires consideration of the environmental needs of the community. TQM – C ore C oncepts

6. Key concepts of Total Quality Total Quality Management is a strategy for business success, based on the following concepts: Customer satisfaction, Be customer focused Internal customers are real All work is process, Make it a good place to work, create a work culture which will lead to satisfied customers Measurement – Measure the work Team work – Top Management must be involved People make quality – Do it right the first time, Quality is an attitude, empowering Continuous improvement cycle Prevention TQM – C ore C oncepts

7. “Total Quality Management” - TQM Principles

8. 1- Be Customer focused : What ever you do for quality improvement, remember that ONLY customers determine the level of quality, what ever you do to foster quality improvement, training employees, integrating quality into processes management, ONLY customers determine whether your effort were worthwhile 2- Ensure Total Employee Involvement : This done after you remove fear from work place, then empower employee. You provide the proper environment 3- Process Centered : Fundamental part of TQM is to focus on Process thinking 4- Integrated system : All employee must know business mission and vision, must monitor the process and an integrated business system may be modeled by ISO 9000 TQM - P rinciples

9. 5- Strategic and systematic approach : Strategic plan must integrate quality as core component 6- Continual Improvement : Using analytical and creative thinking in finding ways to become more effective 7- Fact Based Decision Making : Decision making must be ONLY on data, not personal thinking or situational 8- Communication : Communication strategy, method and timeliness must be well defined TQM - P rinciples

10. TQM is the foundation for activities which include; Meeting Customer Requirements Reducing Development Cycle Times Just In Time / Demand Flow Manufacturing Improvement Teams Reducing Product and Service Costs Improving Administrative Systems Training TQM – A s a f oundation

11. T en S teps T o TQM 1.Pursue New Strategic Thinking 2.Know your Customers 3.Set True Customer Requirements 4.Concentrate on Prevention, Not Correction 5.Reduce Chronic Waste 6.Pursue a Continuous Improvement Strategy 7.Use Structured Methodology for Process Improvement 8.Reduce Variation 9.Use a Balanced Approach 10.Apply to All Functions

12. TQM – T en C ommandments i.Approach – Management Lead ii.Method – Prevention iii.Objective – Total Customer Satisfaction iv.Measure – Cost of Quality v.Standard – Right first time vi.Scope – Ownership and Commitment vii.Theme – Continuous Improvement viii.Ability – Training and Education ix.Communication – Cooperation and Teamwork x.Reward – Recognition and Pride

13. Management leadership and long term commitment Managers to act as role models who lead and empower change A management culture of partnership, learning together, guidance and support for employees Clearly defined business objectives communicated by managers and supervisors, understood and “owned” by all employees. “Ownership” can be viewed as the “acceptance of accountability”. Encouraging and empowering all employees to adopt “ownership” behaviour. Ownership of their outputs, ownership of customers problems, ownership of improvement actions. A focus on success through people - Solutions by consensus - Recognition of success - A “no blame” attitude - Education and training based on defined user needs - Teamwork - Effective communication including listening, providing feedback and provision of visual communication TQM – R equires

14. The focus for Total Quality is continuous improvement aimed at achieving total “customer delight”, perceived “value for money” at optimum cost to the organisation. This requires everyone within the organisation to:  Use a defined process for Quality delivery  Continuously identify improvement opportunities  Deliver improvement through structured problem solving  Identify and use error prevention and corrective feedback mechanisms  Focus on Process design, reduction in variability and capability assurance  Develop Cross-Functional Process Management TQM – f ocus

15. W hen S hould W e G o f or TQM? When should an organization go for TQM: There is an intense Competition Economic turn down Demanding Customers Falling prices of shares To be Market leaders Government Initiatives Crisis

16. TQM – E conomic J ustification Profit Cost Profit Imperfect OrganizationTQM Company Cost higher due to deficiencies Selling price lower due to reputation of deficiencies Cost lower due to no deficiencies Selling price higher due to higher reputation

17. TQM – P oor P ractices To be able to become a total quality organization, some of the bad practices must be recognized and corrected. These may include: Leaders not giving clear direction Not understanding, or ignoring competitive positioning Each department working only for itself Trying to control people through systems Confusing quality with grade Accepting that a level of defects or errors is unavoidable or certain Firefighting, reactive behavior The “It’s not my problem” attitude

18. Total Quality Management is an organisation wide process based on: Best use of the resources of the total organisation Organisational flexibility and response to change Defined internal and external customer/supplier relationships embracing: -external customers - internal customers - external suppliers - internal suppliers bound together in long term business relationships TQM - B ases

19. There exists in each department, each office, each home, a series of customers, suppliers and customer supplier interfaces. These are “the quality chains”, and they can be broken at any point by one person or one piece of equipment not meeting the requirements of the customer, internal or external. The failure usually finds its way to the interface between the organisation and its external customer, or in the worst case, actually to the external customer. Failure to meet the requirements in any part of a quality chain has a way of multiplying, and failure in one part of the system creates problems elsewhere, leading to yet more failure and problems, and so the situation is exacerbated. The ability to meet customers’ (external and internal) requirements is vital. To achieve quality throughout an organisation, every person in the quality chain must be trained to about every customer-supplier interface. As well as being fully aware of customers’ needs and expectations, each person must respect the needs and expectations of their suppliers. The ideal situation is an open partnership style relationship, where both parties share and benefit. TQM – Bases - Customers & Suppliers

20. Measurement of performance. The standard is the “agreed customer requirement” and the required performance is: - Absolute conformance to agreed customer requirements - Customer satisfaction - Process efficiency - Anticipating customer needs and expectations - Delivering products and services that delight customers - Benchmarking - identifying and adopting world-wide best practice - Measuring and monitoring continuous improvement TQM - B ases

21. The failure to address the culture of an organisation is frequently the reason for many management initiatives either having limited success or failing altogether. Understanding the culture of an organisation, and using that knowledge to successfully map the steps needed to accomplish a successful change, is an important part of the quality journey. The culture in any organisation is formed by the beliefs, behaviours, norms, dominant values, rules and the “climate”. A culture change, e.g, from one of acceptance of a certain level of errors or defects to one of right first time, every time, needs two key elements: Commitment from the leaders Involvement of all of the organisation’s people There is widespread recognition that major change initiatives will not be successful without a culture of good teamwork and cooperation at all levels in an organisation. TQM – B ases – Culture Change

22. The Malcolm Baldrige National Quality Award is an annual award that recognizes U.S. organizations in the business, health care, education, and nonprofit sectors for performance excellence. It is administered by the Baldrige National Quality Program, which is based at and managed by the National Institute of Standards and Technology. The Award promotes awareness of performance excellence as an increasingly important element in competitiveness and information sharing of successful performance strategies and the benefits derived from using these strategies. Congress established the Baldrige Award in 1987 as a result of Public Law 100 – 107. Background information on the law mentions foreign competition as the major rationale. The Award has set a national standard for quality, and hundreds of major corporations use the criteria in the application form as a basic management guide for quality improvement programs. This Award has created a new set of standards – Benchmark for quality. M alcolm Baldrige National Quality Award

23. Organizations must address seven specific categories to qualify for the Award. Organizations are judged on a perfect score of 1000. The seven categories with the weightages are: 1. Leadership95 marks 2. Strategic Planning60 marks 3. Customer Focus300 marks 4. Information & Analysis75 marks 5. Workforce Focus150 marks 6. Process Management140 marks 7. Results180 marks Criteria for Performance Excellence

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