1. Managing improvement – the TQM approach
Chapter 20
Managing improvement – the TQM approach
Source: Corbis/Munshi Ahmed

2. Improvement using the ideas of total quality management (TQM)
Managing improvement
Operations strategy
Operations process improvement makes processes better
Operations management
Total quality management organizes process improvement
Design
Improvement
Failure prevention and recovery stop processes becoming worse
Planning and control

3. Total Quality Management
Total quality management can be viewed as a natural extension of earlier approaches to quality management
Prevents ‘out of specification’ products and services reaching market
Solves the root cause of quality problems
Broadens the organizational responsibility for quality
Makes quality central and strategic in the organization
Quality is strategic
Teamwork
Staff empowerment
Involves customers and suppliers
Quality systems
Quality costing
Problem solving
Quality planning
Statistics
Process analysis
Quality standards
Error detection
Rectification
Inspection
Quality control
Quality assurance
Total Quality Management

4. The internal customer–supplier concept involves understanding the relationship between processes
External supplier
External customer
Process 1
Process 2
Process 6
Process 5
Process 4
Between each process, the requirements of the ‘customer’ process must be understood and met by the 'supplier’ process

5. The traditional cost of quality model
Total cost of quality
Cost of errors = costs of prevention and appraisal
Costs
Cost of quality provision = costs of internal and external failure
Optimum amount of quality effort
Amount of quality effort

6. The traditional cost of quality model with adjustments to reflect TQM criticisms
Cost of errors = costs of prevention and appraisal
Total cost of quality
Costs
Cost of quality provision = costs of internal and external failure
Optimum amount of quality effort
Amount of quality effort

7. The EFQM’s ‘Business Excellence’ model
People results
People
Key performance results
Leadership
Policy and strategy
Customer results
Processes
Partnerships and resources
Society results

8. The quality gurus Quality is free – the optimum is zero defects
Philip Crosby
Quality is free – the optimum is zero defects
W. Edwards Deming
Deming’s 14 points
How to use statistics
Armand Feigenbaum
Total quality control
Kaoru Ishikawa
Quality circles and cause-and-effect diagrams
Joseph Juran
Quality as fitness for use, rather than conformance to specification
Genichi Taguchi
Loss function
Minimize variation

9. Total Quality Management
Includes all parts of the organization
Includes all staff of the organization
Source: Corbis/Richard T Nowitz
Includes consideration of all costs
Includes every opportunity to get things right
Includes all the systems that affect quality
Never stops

10. The cost of rectifying errors increases more rapidly the longer they remain uncorrected in the development and launch process
10000
1000
Cost of rectifying error
100 10 1
Concept
Design
Prototype
Pilot production
Market use
Stage in development and launch process

11. Increasing the effort spent on preventing errors occurring in the first place brings a more than equivalent reduction in other cost categories
Total cost of quality
Appraisal
Internal failure
Costs of quality
Appraisal
Prevention
Time

12. The pattern of some TQM programmes which run out of enthusiasm
Introduction
Growth
Levelling off
Disillusionment
Repackaging
Learning and understanding
Increasing enthusiasm
Starting to hit the more difficult problems
Waning enthusiasm
Attempts to revitalize the programme
Effectiveness of the TQM initiative

13. Key Terms Test Total quality management (TQM)
A holistic approach to the management of quality that emphasizes the role of all parts of an organization and all people within an organization to influence and improve quality; heavily influenced by various quality ‘gurus’, it reached its peak of popularity in the 1980s and 1990s.
Internal customers
Processes or individuals within an operation that are the customers for other internal processes or individuals’ outputs.
Internal supplier
Processes or individuals within an operation that supply products or services to other processes or individuals within the operation.

14. Key Terms Test Service-level agreements (SLAs)
Formal definitions of the dimensions and levels of service that should be provided by one process or operation to another.
Quality
There are many different approaches to defining this. We define it as consistent conformance to customers’ expectations.
Prevention costs
Those costs that are incurred in trying to prevent quality problems and errors occurring; an element within quality-related costs.

15. Key Terms Test Appraisal costs
Those costs that are associated with checking, monitoring and controlling quality to see whether problems or errors have occurred; an element within quality-related costs.
Internal failure costs
Those costs that are associated with errors and failures that are dealt with inside an operation but yet cause disruption; an element within quality-related costs.
External failure costs
Those costs that are associated with an error or failure reaching a customer; an element within quality-related costs.

16. Key Terms Test
ISO 9000
A set of worldwide standards that established the requirements for companies’ quality management systems, last revised in There are several sets of standards.
Six Sigma
An approach to improvement and quality management that originated in the Motorola Company but that was widely popularized by its adoption in the GE Company in America. Although based on traditional statistical process control, it is now a far broader ‘philosophy of improvement’ that recommends a particular approach to measuring, improving and managing quality and operations performance generally.

17. Key Terms Test European Quality Award (EQA)
A quality award organized by the European Foundation for Quality Management (EFQM) and based on the EFQM excellence model.
EFQM Excellence Model or Business Excellence Model
A model that identifies the categories of activity that supposedly ensure high levels of quality; now used by many companies to examine their own quality-related procedures.