1. TOTAL QUALITY MANAGEMENT Nakia Madry Katerina Stecova Krajewski, L. and Ritzman L. (2002). Operations Management: Strategy and Analysis. 6 th Ed. Upper Saddle River, NJ: Pearson Education, Inc.

2. Presentation Outline  Background Information  Customer Satisfaction  Employee Involvement  Continuous Improvements  Improving Quality through TQM  Awards and Standards  Example  Questions

3. Background Information  Challenge for Businesses Producing quality products or services  TQM History (1970s) Japan Edward Deming Joseph Juran  TQM Definition A philosophy that stresses customer satisfaction, employee involvement, and continuous improvements in quality. TQM also involves benchmarking, product and service design, process design, purchasing, and problem solving tools.

4. Background Information (cont’d) Customer Satisfaction Employee Involvement Continuous Improvement Purchasing Product/Service Design Process Design Benchmarking Problem Solving Tools

5. Customer Satisfaction  Conformance to Specifications Quality = if online order comes within specified delivery time  Value Quality = if a $2 pen serves for a year  Fitness for Use Quality = if it was easy to assemble a desk and if it served well  Support Quality = computer repair free of charge  Psychological Impressions Quality = nicely dressed, friendly and sympathetic employees

6. Employee Involvement  Cultural Change Defining customer for each employees Philosophy of “quality at source”  Teams Problem-solving teams Special purpose teams Self managing teams  Individual Development Training  New work methods to experienced workers  Current practices to new workers

7. Continuous Improvement  Steps for Achieving Continuous Improvement: Train employees in the methods of statistical process control (SPC) Make SPC methods a normal aspect of daily operations Build work teams and employee involvement Utilize problem-solving tools within the work teams Develop a sense of operator ownership in the process

8. Quality Improvement through TQM  Purchasing Considerations Firm’s quality depends on supplier’s quality  Product/Service Design Testing of new design with focus on market  Process Design Cooperation of operation managers and designers  Benchmarking Measuring against industry leaders  Problem-Solving Tools Data analysis tools

9. Quality Awards and Standards  Malcom Baldridge National Quality Award The award promotes, recognizes, and publicizes quality strategies and achievements Recipients: IBM, 3M, Federal Express, Merrill Lynch  ISO 9000 A set of standards governing documentation of a quality program  ISO 14000 Documentation standards that required participating companies to keep track of their raw materials use and their generation, treatment, and disposal of hazardous waste

10. Example  Parkroyal Hotel, New Zealand Luxury hotel with 297 guest rooms, three restaurants, three lounges, and 338 employees serving 2,250 guests each week who purchase 2,450 meals High-level of quality is sustained through:  Empowering employees  Tracking performance and identifying areas needing improvement  Reminding employees of quality standards  Employee recruiting, training, and motivation

11. Questions