1. IT Services Group 4 Jalal Hafidi Mathew Joseph Tolulope Oke
Denisa Teme
Li Wei

2. Overview Total Quality Management (TQM) Definition of TQM
Evolution of TQM
Quality
Quality programs
Cost of Quality
Philosophy of TQM
TQM approaches
TQM tools
Case Study
Difference between manufacturing and service organization
ITIL
Quality Standards
Failure of TQM efforts
Relations to COBIT5 1 of 26

3. Total Quality Management (TQM)
Have you ever lost your luggage or ordered goods and they were late?
Was your issue resolved?
What in your opinion is TQM? 2 of 26

4. What is TQM?
An integrated effort geared at improving quality throughout the organization
Quality & Success, Competitiveness
Customer Satisfaction & Quality Management
Customer-defined Quality
Quality terms should be agreed upon by both parties so as to achieve the desired aim 3 of 26

5. Evolution of TQM
The concept of Quality dates as far back as the early twentieth century
The general concept then was inspecting products to ensure that they met specifications
In the 1960s with the help of “Quality gurus” it evolved from being just a production process to a concept that spans across the organization
In the 1970s companies began to tie quality and competitive edge
TQM moved from the old concept of “reactiveness” to “proactiveness” 4 of 26

6. Question
A successful TQM program incorporates all of the following except:
Continuous improvement
Employee involvement
c. Benchmarking
d. Centralized decision making authority 5 of 26

7. How do you define quality?
Discussion
How do you define quality? 6 of 26

8. What is Quality? No universal definition of quality People view it as:
“Performance to standards”
“Meeting the customer’s needs”
“Satisfying the customer”
Conformance to specifications
Fitness for use
Value for price paid
Support services
Psychological criteria
Common Definitions of Quality
Conformance to specifications
Measures now well the product or service meets the targets and tolerances determined by its designers.
Fitness for use
Focuses on how well the product performs its intended function or use.
Value for price paid
Quality that consumers often use for product or service usefulness
Combines economics and consumer criteria
Quality is price sensitive
“Got for what you paid”
Support Services
Quality defined in terms of the support provided after the product or services is purchased.
Does not apply only to the product or service itself, it also applies to the people, process, and organizational environment associated with it.
Psychological criteria
Subjective definition
A way of defining quality that focuses on the judgmental evaluation of what constitutes product or services excellence. 7 of 26

9. Cost of Quality Cost to achieve high quality Cost consequences
of poor quality
Prevention
costs
Appraisal
Internal failure costs
External failure costs 8 of 26

10. Cost of Quality 9 of 26 Prevention Costs Includes:
Quality planning costs, such as the cost of developing and implementing a quality plan
Costs of product and process design, from collecting customer information to designing processes that achieve conformance to specifications
Employee training
Maintaining records of information and data related to quality.
Appraisal Costs.
Cost of quality inspections, product testing, and performing audits to make sure that quality standards are being met
Costs of worker time spent measuring quality and the cost of equipment used for quality appraisal
Internal Failure Costs
Rework which is the cost of correcting the defective item.
Sometimes the item is so defective that it cannot be corrected and must be thrown away.
Cost of machine downtime due to failures in the process and the costs of discounting defective items for salvage value.
External Failure Costs
Customer complaints, product returns, and repairs, to warranty claims, recalls, and costs resulting from product liability issues such a product recall. 9 of 26

11. Costs of Defects
The earlier defects are found, the less costly they are to correct. 10 of 26

12. Question
All of the following costs are likely to decrease as a result of better quality except: a. Customer dissatisfaction costs b. Maintenance costs c. Scrap costs d. Inspection costs
You always want to spend money on maintenance costs because you want to constantly improve quality. Maintenance cost is what improves quality whereas with the other options you reduce costs as quality increases. 11 of 26

13. The Philosophy of TQM
TQM is based on quality management from different points of view:
Customer focus
Continuous improvement
Employee empowerment
Use of quality tools
Two approaches are used in assessing performance:
Benchmarking approach
TQM approach is not based on inspection it focuses on identifying and correcting the root cause of the problems
TQM embeds quality in the entire organization
Customers focus
In TQM approach, quality is costumer driven
First identify the customers needs
Second satisfy their needs
Third exceed their expectation “if possible”
Customers focus challenge
Tastes and preferences change
Expectations are different
Can the customers afford what they want?
Continuous improvement
“Kaizen” A philosophy of never-ending improvement
Perfection hard to achieve
Evaluate performance and take measures to improve it
Two approaches are used in assessing performance:
PDSA & Benchmarking
Employee Empowerment:
In TQM approach the employees are encouraged to find quality problems, not punished
The employees are considered internal customers
“Two heads are better than one”
Team meeting
Quality cycle 12 of 26

14. TQM Approaches Benchmarking approach:
The Plan–Do–Study–Act approach (PDSA)
The activities needed to improve
PDSA cycle:
Plan: Analyze =>collect data=>identify problems=>develop a plan for improvements.
Do: Implement the changes=>collect data for evaluation.
Study: Analyze the data collected=> evaluate it against the plan
Act: Communicate the result=> implement the new procedure
Benchmarking approach:
Studying the business practices of other companies
Compare your company performance
Learn how they do things differently
Apply it 13 of 26

15. TQM Tools
The seven tools of quality control:
Cause-and-effect diagram
Flowchart
Checklist
Control charts
Scatter diagrams
Pareto analysis
Histogram
Quality tools can be used to evaluate the acceptability of product quality and to monitor product quality from individual suppliers
Use of Quality Tools
Employees need quality control tools to asses quality
The seven tools of quality control
Cause-and-effect diagram
A chart that identifies potential causes of particular quality problems
Flowchart
A schematic of the sequence of steps involved in an operation or process
Checklist
A list of common defects and the number of observed occurrences of these defects
Control charts
Charts used to evaluate whether a process is operating within set expectations
Scatter diagrams
Graphs that show how two variables are related to each other
Pareto analysis
A technique used to identify quality problems based on their degree of importance
Histogram
A chart that shows the frequency distribution of observed values of a variable 14 of 26

16. Question
The process of identifying other organizations that are best at some facet modeling your organization after them is known as: a. Continuous improvement b. Employee empowerment c. Benchmarking d. Copycatting e. Patent infringement 15 of 26

17. Case Study Questions
What is wrong with how Gold Coast Advertising (GCA) measure its quality? Explain why Gold Coast should ask its customers about how they define quality.
Offer suggestions to George Stein on ways of identifying quality dimensions GCA’s customers consider important.
What questions would you ask customers to evaluate how they define quality? 16 of 26

18. Quality as Defined by Manufacturing & Service Organizations
Defining quality in manufacturing organizations is often different from that of services.
Conformance - is the degree to which a product characteristic meets preset standards. When a person buys a IPhone he measures the quality by relying on the fact that all IPhones are the same
Performance – The acceleration of the vehicle.
Reliability is the concept that the product will function as expected without failure. Reliability can be measured as a probability.
durability—expected operational life of the product. A person buying a Landover measures the quality of his vehicle by how durable it is.
serviceability—how readily a product can be repaired. Nokia was a big success in Asia because it could be easily repaired at a low cost. Suzuki captured the Indian car market because people knew that parts were cheap and service centers were located throughout the country.
service organizations produce a product that is intangible. The service industry is the largest segment of the economy. The 2007 economic collapse was largely due to the service sector. 17 of 26

19. Process Management Old vs. New What kind of control is it ? Preventive
Detective
Corrective
Managing supplier quality
The old concept focused on inspecting goods after they were produced
The new concept of quality focuses on identifying quality problems at the source and correcting them.
Total Quality management also includes ensuring that suppliers are meeting quality standards. It is tough for small companies to influence their suppliers to change their process. On the other hand suppliers are ready to re invent their whole manufacturing process if Wal mart requires them to do so. This new way focuses building quality into the process rather than just final inspection. 18 of 26

20. ITIL Information Technology Infrastructure Library
A globally recognized collection of best practices for IT service management
Focuses on aligning IT services with the needs of business
Quality management 19 of 26

21. Question
ISO 9000 seeks standardization in terms of a. Products b. Production procedures c. Suppliers’ specifications d. Procedures to manage quality 20 of 26

22. Quality Standards ISO 9000 Standards
A set of international quality standards and a certification demonstrating that companies have met all the standard specified.
Development:
ISO 9000:2000 – Fundamentals and Standards
ISO 9001:2000 – Requirements
ISO 9004:2000 – Guidelines for Performance
Advantages
How to receive the ISO certification
Increases in international trade during the 1980s created a need for the development of universal standards of quality International Organization for Standardization (ISO) published its first set of standards for quality management called ISO 9000.
ISO 9000:2000 – Fundamentals and Standards (starting point)
ISO 9001:2000 – Requirements (conformity of Quality Management systems->customer requirements)
ISO 9004:2000 – Guidelines for Performance (customer requirements & improving performance)
Advantages:
Applicable to all types of companies and have gained global acceptance.
creates a more efficient, effective operation
increases customer satisfaction and retention
reduces audits
enhances marketing
improves employee motivation, awareness, and morale
promotes international trade
increases profit
reduces waste and increases productivity
How to receive:
1) Provide extensive documentation of its quality process. (methods used to monitor quality, methods and frequency of worker training, job descriptions, inspection programs, and statistical process-control tools used)
2) Company then audited by ISO 9000 registrar who visits the facility to make sure company have a well-documented quality management system and that the process meets the standards.
3) Registrar find all in order -> receive the certification
18-24 months; $10,000-30,000; recertified per 3 years
Two types of auditing are required to become registered to the standard: auditing by an external audit and audits by internal audit. The aim is a continual process of review and assessment to verify that the system is working as it is supposed to; to find out where it can improve; and to correct or prevent problems identified. It is considered healthier for internal auditors to audit outside their usual management line, so as to bring a degree of independence to their judgments.
Audit development: Under the 1994 version, the question was broad: "Are you doing what the manual says you should be doing?", whereas under the 2000 version, the questions are more specific: "Will this process help you achieve your stated objectives? Is it a good process or is there a way to do it better?" 21 of 26

23. Quality Standards
ISO 14000
A set of international standards and a certification focusing on a company's environmental responsibility
Focusing on 3 major areas:
Management systems
Operations
Environmental systems
Green Manufacturing and environmental concerns
Management systems
standards measure systems development and integration of environmental responsibility into the overall business.
Operations
standards include the measurement of consumption of natural resources and energy.
Environmental systems
standards measure emissions, effluents, and other waste systems. 22 of 26

24. Why TQM Efforts Fail Lack of a genuine quality culture ☆
Failure
Lack of a genuine quality culture
Lack of top management support and commitment
Over- and under-reliance on statistical process control (SPC) methods
Lack of a genuine quality culture ☆
The most important factor in the success or failure of TQM efforts is the true reason why the company would like to do quality management.
X: competitor, market, short-term ->failure
Lack of top management support and commitment：
lies with employees other than top management
Top-down
Over- and under-reliance on statistical process control (SPC) methods：
SPC is not a substitute for continuous improvement, teamwork, and a change in the organization’s belief system.
However, SPC is a necessary tool for identifying quality problems.
{Statistical process control (SPC) is a method of quality control which uses statistical methods. SPC is applied in order to monitor and control a process. Monitoring and controlling the process ensures that it operates at its full potential. At its full potential, the process can make as much conforming product as possible with a minimum (if not an elimination) of waste} 23 of 26

25. APO11-Managing Quality Maintain continuous improvement.
Establish a quality management system
Define and manage quality standards, practices and procedures.
Focus quality management on customers.
Perform quality monitoring, control and reviews
Integrate quality management into solutions
Maintain continuous improvement. 24 of 26

26. Relation to COBIT5- Output
Establish a quality management system
Quality management plans
Define and manage quality standards, practices and procedures.
Quality management standards
Focus quality management on customers
Review results of quality of service, including customer feedback
Perform quality monitoring, control and reviews.
Results of quality reviews and audits
Integrate quality management into solutions for development and service delivery
Results of solution and service delivery quality monitoring
Maintain continuous improvement.
Quality review benchmark results 25 of 26

27. THANK YOU 26 of 26