1. Total Quality Management
Dr. Nur Aini Masruroh

2. Hidden costs of poor quality
Reprocessing
Rejects
Sorting Inspection
Customer returns
Warranty expenses
Downgrading of product
Competitor
Sea of Competition
Competitor
Lost sales
Overtime to correct errors
Process downtime
Loss of good will
Extra inventory
Paperwork errors
Lost discounts
Delays
Competitor
Damaged goods
Obsolete inventory
Premium freight costs
Incorrect orders shipped
Customer allowances
Extra process capacity

3. Lakukan sesuatu sebelum semuanya terlambat!!

4. Definition of Quality What is Quality? ISO 8402 states that TQM is a:
What are measures of quality for this product?
Conformance to agreed requirements - Agreed between?
Fitness for purpose/use
ISO 8402 states that TQM is a:
“Management approach of an organisation, centered on quality, based on the participation of all its members and aiming at long term success through customer satisfaction, and benefits to all members of the organisation and to society”

5. Total Quality Management (TQM): Defined
Total quality management is defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer 3

6. TQM Wheel Customer satisfaction Product/service design Process design
Purchasing
Product/service design
Problem-solving tools
Benchmarking
Employee involvement
Continuous improvement
Customer satisfaction
This slide presents the TQM Wheel in Figure This can be left on the screen while you discuss whatever aspects of the wheel you choose. 2

7. Nature of Quality Dimensions of Quality Determinants of Quality
Costs of Quality

8. Best-In-Class and World-Class
Customers’ expectations of quality are not the same for different classes of products or services.
Best-in-class quality means being the best product or service in a particular class of products or services.
Being a world-class company means that each of its products and services are considered best-in-class by its customers.

9. Some Dimensions of Product Quality
Performance–relative to customer’s intended use
Features–special characteristics
Reliability–likelihood of breakdowns, malfunctions
Serviceability–speed/cost/convenience of servicing
Durability–amount of time/use before repairs
Appearance–effects on human senses
Customer service–treatment before/during/after sale
Safety – user protection before/during/after use

10. Determinants of Quality
Quality of design – products/service designed based on customers’ expectations and desires
Quality capability of production processes – processes must be capable of producing the products designed for the customers
Quality of conformance – capable processes can produce inferior product if not operated properly
Quality of customer service – a superior product does not mean success; must have quality service also
Organization quality culture – superior product and service requires organization-wide focus on quality

11. Costs of Quality Prevention costs - reducing the potential for defects
Appraisal costs - evaluating products
Internal failure - of producing defective parts or service
External costs - occur after delivery

12. Encompasses entire organization, from supplier to customer
TQM
Encompasses entire organization, from supplier to customer
Stresses a commitment by management to have a continuing, company-wide, drive toward excellence in all aspects of products and services that are important to the customer.
A point to be made here is that TQM is not a program but a philosophy.

13. Prevention Versus Detection
This is a central theme of all Quality approaches
Detection allows a mistake or error to become a DEFECT!
Passed on to next process undetected
Much more difficult to identify
Costs more to put right
Difficult to identify the root cause
Can often pass through the system to the external customer!
Preoccupied with the OUTPUT from the process

14. TQM Principles Internal customer supplier relationship
Continuous Improvement
Teamwork
Employee participation/ development
Training and education
Suppliers and customers integrated into the process
Honesty, sincerity & care

15. Starting TQM is like pushing a boulder up a mountain…. hard work!!
Along the way its gets harder…
People get left behind…
Fall out… and it feels
like you’re the
only one trying!
But eventually it gets to a point
when the process gathers
speed and becomes
unstoppable!!!

16. Quality Improvement process
Renewal points and
possible loss of gains
Position before
Introduction
of TQM
Time

17. Quality Improvement process
Continuous Improvement
Many small improvements
Renewal points and
possible loss of gains
Time
Improvement
Position before
Introduction
of TQM

18. Levels of TQM adoption Permanency of TQM Level of TQM adoption
1. Uncommitted
2. Drifters
3. Tool-pushers
4. Improvers
5. Award Winners
6. World Class

19. Levels of TQM Adoption Uncommitted Uncommitted to any long term plan
Not yet started a formal process of quality improvement
ISO9000 registered, but not utilised effectively
Basic tools & techniques in use from customer pressure
No long term plan for quality improvement
Not aware of major benefits to be gained through quality
Uncommitted to any long term plan
Don’t really see any benefit to quality improvement

20. Levels of TQM Adoption Drifters Drift from one programme to another
Existing quality programme for up to 3 years
Aware of ‘Received Wisdom’ of quality gurus
Initial programme probably fizzled out
Ready for different approach but unsure which
Quality improvement still perceived as a programme rather than a process
Drift from one programme to another
Change of approach sparked by new senior executive

21. Levels of TQM Adoption Tool-Pushers
More experience of quality improvement; up to 5 years
Will have experience of SPC, Quality Circles, and other Quality Planning tools such as QFD, FMEA
Early success with one approach but has now fallen in to disuse
Not all members of the management team are committed to quality; lack of supportive training
Looking for quick fixes and latest management fad
Right kind of signal to customers, but under surface a fire-fighting culture still remains

22. Levels of TQM Adoption Improvers
Extensive experience of ongoing quality improvement
Understand that TQM is not a short sprint
Adopted a continuous improvement approach
‘Quality Champion’ culture starting to emerge
Company wide education in place and ongoing
Demonstrable progress made in critical business areas
Still perhaps reliant on a few key individuals
Moving in the right direction, but realize they have a long way to go

23. Levels of TQM Adoption Award Winners
Capable of competing for major quality awards
EFQM Quality Award, MBNQA, Deming Prize
Leadership culture ingrained throughout the organisation
Several successful organizational changes taken place
Fully participative organizational culture
TQM view sincerely as a way of managing the business
This level marks the end of the TQM apprenticeship
Fewer than 200 companies world-wide

24. Levels of TQM Adoption World Class
Total integration of quality improvement and business strategy
Demonstrates sustained award winning performance
Japan Quality Control medal award
All employees share pursuit of never ending customer satisfaction
TQM not just a business strategy, but a way of life
Possibly fewer than 15 companies can be considered at this level world-wide

25. Deming’s Fourteen Points
Create consistency of purpose
Lead to promote change
Build quality into the products
Build long term relationships
Continuously improve product, quality, and service
Start training
Emphasize leadership
One point to make here is that this list represents a recent expression of Demings 14 points - the list is still evolving.
Students may notice that many of these fourteen points seem to be simply common sense. If they raise this issue - ask them to consider jobs they have held. Were these points emphasized or implemented by their employers? If not, why not? This part of the discussion can be used to raise again the issue that proper approaches to quality are not “programs,” with limited involvement and finite duration, but rather philosophies which must become ingrained throughout the organization.

26. Deming’s Points - continued
Drive out fear
Break down barriers between departments
Stop haranguing workers
Support, help, improve
Remove barriers to pride in work
Institute a vigorous program of education and self- improvement
Put everybody in the company to work on the transformation

27. Quality Loss Function

28. Target Specification Example
A study found U.S. consumers preferred Sony TV’s made in Japan to those made in the U.S. Both factories used the same designs & specifications. The difference in quality goals made the difference in consumer preferences.
Japanese factory (Target-oriented)
This slide probably deserves some discussion. Some students will probably question whether consumers could tell the difference between the two. You should stress that they can tell the difference and that this will have an impact on their buying decisions.
U.S. factory (Conformance-oriented)

29. Quality Loss Function; Distribution of Products Produced
High loss
Quality Loss Function (a)
Unacceptable
Loss (to producing organization, customer, and society)
Target-oriented quality yields more product in the “best” category
Poor
Fair
Good
Best
Low loss
Target-oriented quality brings products toward the target value
Conformance-oriented quality keeps product within three standard deviations
This slide may help clarify the differences between conformance and target-based quality control.
Frequency
Distribution of specifications for product produced (b)
Lower
Target
Upper
Specification

30. PDCA Cycle 4.Act: Implement the plan 1.Plan:
Identify the improvement and make a plan
3.Check:
Is the plan working
2.Do:
Test the plan

31. Tools of TQM Tools for generating ideas Tools to organize data
Check sheet
Scatter diagram
Cause and effect diagram
Tools to organize data
Pareto charts
Process charts (Flow diagrams)
Tools for identifying problems
Histograms
Statistical process control chart

32. Seven Tools for TQM

33. Pareto Analysis of Wine Glass Defects (Total Defects = 75)
This slide probably deserves more discussion than most of us would tend to allot it. Students need to understand the cost of “going the extra mile,” - the difference between something which may be very good, and something which is perfect.
The students also need to recognize that Pareto charts suggest where to place effort - on the item that looms largest on the chart. After progress is made on that item, then one performs a Pareto analysis on the remaining items, and repeats the procedure..
72%
16% 5% 4% 3%

34. Process Chart Shows sequence of events in process
Depicts activity relationships
Has many uses
Identify data collection points
Find problem sources
Identify places for improvement
Identify where travel distances can be reduced
This slide can be used to introduce Process Charts.

35. Statistical Process Control (SPC)
Uses statistics & control charts to tell when to adjust process
Developed by Shewhart in 1920’s
Involves
Creating standards (upper & lower limits)
Measuring sample output (e.g. mean wgt.)
Taking corrective action (if necessary)
Done while product is being produced
This slide introduces the process of Statistical Process Control. Slides illustrating the mechanics will be found in the presentation for supplement 6S.
At some point, you may wish to illustrate or discuss the connection between Statistical Process Control and the Target and Conformance-based quality control discussed earlier.

36. Statistical Process Control (SPC)
Statistical technique used to ensure process is making product to standard
All process are subject to variability
Natural causes: Random variations
Assignable causes: Correctable problems
Machine wear, unskilled workers, poor material
Objective: Identify assignable causes
Uses process control charts
This slide introduces the difference between “natural” and “assignable” causes.
The next several slides expand the discussion and introduce some of the statistical issues.

37. Quality Characteristics
Attributes
Variables
Characteristics that you measure, e.g., weight, length
May be in whole or in fractional numbers
Continuous random variables
Characteristics for which you focus on defects
Classify products as either ‘good’ or ‘bad’, or count # defects
e.g., radio works or not
Categorical or discrete random variables
Once the categories are outlined, students may be asked to provide examples of items for which variable or attribute inspection might be appropriate. They might also be asked to provide examples of products for which both characteristics might be important at different stages of the production process.

38. Process Control Charts
An example of a control chart. .

39. Control Chart Purposes
Show changes in data pattern
e.g., trends
Make corrections before process is out of control
Show causes of changes in data
Assignable causes
Data outside control limits or trend in data
Natural causes
Random variations around average

40. Theoretical Basis of Control Charts
As sample size gets large enough,
sampling distribution becomes almost normal regardless of population distribution.
Central Limit Theorem
The next three slides can be used in a discussion of the theoretical basis for statistical process control.

41. Theoretical Basis of Control Charts
Properties of normal distribution

42. Control Chart Types Continuous Numerical Data
Categorical or Discrete Numerical Data
Control
Charts
Variables
Attributes
Charts
Charts
This slide simply introduces the various types of control charts. R X P C
Chart
Chart
Chart
Chart

43. X Chart Type of variables control chart Shows sample means over time
Interval or ratio scaled numerical data
Shows sample means over time
Monitors process average
Example: Weigh samples of coffee & compute means of samples; Plot

44. Control Chart for Samples of 9 Boxes
Variation due to natural causes
17=UCL
16=Mean
15=LCL
Variation due to assignable causes
Out of control
Sample Number

45. X Chart Control Limits
Range for sample i
# Samples
Mean for sample i
From Table on p.48
The following slide provides much of the data from Table S6.1.

46. Factors for Computing Control Chart Limits

47. R Chart Type of variables control chart Shows sample ranges over time
Interval or ratio scaled numerical data
Shows sample ranges over time
Difference between smallest & largest values in inspection sample
Monitors variability in process
Example: Weigh samples of coffee & compute ranges of samples; Plot

48. R Chart Control Limits From Table on p. 48 Range for Sample i
# Samples
From Table on p. 48

49. Steps to Follow When Using Control Charts
Collect 20 to 25 samples of n=4 or n=5 from a stable process and compute the mean.
Compute the overall means, set approximate control limits,and calculate the preliminary upper and lower control limits.If the process is not currently stable, use the desired mean instead of the overall mean to calculate limits.
Graph the sample means and ranges on their respective control charts and determine whether they fall outside the acceptable limits.
Investigate points or patterns that indicate the process is out of control. Assign causes for the variations.
Collect additional samples and revalidate the control limits.

50. Mean and Range Charts Complement Each Other

51. Patterns to Look for in Control Charts
Ask the students to imagine a product, and consider what problem might cause each of the graph configurations illustrated.

52. Deciding Which Control Chart to Use
Using an X and R chart:
Observations are variables
Collect samples of n=4, or n=5, or more each from a stable process and compute the mean for the X chart and range for the R chart.
Track samples of n observations each.
Using the P-Chart:
We deal with fraction, proportion, or percent defectives
Observations are attributes that can be categorized in two states
Have several samples, each with many observations
Assume a binomial distribution unless the number of samples is very large – then assume a normal distribution.

53. Deciding Which Control Chart to Use
Using a C-Chart:
Observations are attributes whose defects per unit of output can be counted
The number counted is often a small part of the possible occurrences
Assume a Poisson distribution
Defects such as: number of blemishes on a desk, number of typos in a page of text, flaws in a bolt of cloth

54. Why Transformations to Total Quality Do Not Persist
Why Transformations to Total Quality Do Not Persist? Managers are not accountable to their people for the quality of their leadership/management
Michael Beer
Harvard Business School
&
Center for Organizational Fitness