Section I

TQM Perspective
1. TQM Evolution
2. Quality Costs
3. Leadership
4. TQM Implementation
Chapter 1

TQM
EVOLUTION
 Objectives
a. introduce Quality and TQM;
b. define quality and related terms;
c. give historical perspective of quality
and the evolution of TQM;
d. discuss about the concepts
advocated and practiced by various
Quality Gurus.
“Happiness is when
what you think, what
you say, and what you
do are in harmony. “

-Mahatma Gandhi
 Introduction
Total Quality Management (TQM)-
• is customer oriented management
philosophy and strategy.
• It is centered on quality so as to result in
customer delight.
• The word “Total” implies that all
members of the organization make
consistent efforts to achieve the
objective of customer delight through
systematic efforts for improvement of
the organization.
 TQM Evolution
• This Philosophy evolved in Japan after
World War II.
• Edwards Deming, an American
quality expert helped the Japanese
to apply the concepts of TQM.
• They concentrated on customer
satisfaction and focused on
understanding customer needs and
expectations.
• However, the American Industry
ignored this development as it was still
riding high because of lack of
competition.
• During the 1980s they were forced to
look for new ways to survive in an
environment of deregulation, a
growing trade deficit, low
productivity, recession, downsizing
and increasing consumer awakening.
• The need for quality was felt, during
World War II, due to the unprecedented
need for manufactured goods.
• From then on, methodologies for
assuring quality in products and services
evolved continuously, finally leading to
TQM.
 Quality Gurus
– Experts from many countries spearheaded
this evolution, with Deming playing an
important role. They are called Quality
Gurus.
– Since TQM is the culminating of the
teachings of the Quality Gurus,
understanding the teachings of the gurus
will give the right perspective for TQM.
 Introduction:
 What is Quality?
– Merriam Webster’s Collegiate
Dictionary, 10th Edition(1994) defines
quality as
“an inherent feature; degree of
excellence; and superiority in kind
 Some definitions that have gained
wide acceptance in the corporate
world
 “Meeting or exceeding customer
expectations”
 Juran, one of the quality qurus,
defined quality as;
 Fitness for Use
 Introduction
 Based on Juran‘s definiton, quality
therefore does not only have to be
perceived by the customer, but the
customer experience of quality of a
product or service is more
important.
 Quality does not mean an expensive
product
 Introduction

 The definition of quality as per

the ISO (International
Organization for
Standardization) 9000 standard
is ;
 The totality of features and
characteristics of a product or
service that bears on its ability to
satisfy customer’s stated and
implied needs.
Figure 1.The Importance of Quality: The Japanese Chain
Reaction
Improve Quality

Costs decreases due to fewer defects,

Lesser rework, fewer delays and better use
Of Men, Machine and Materials

Improve Productivity

Capture market with better quality

and lower price

Stay in business

Provide more jobs

 Chain Reaction
• The importance of quality will be clear
from the chain reaction on account of
quality envisaged in Japan in the
1950’s.(Fig. 1)
 Introduction
 What is a customer?
 Anyone who is impacted by the
product or services delivered by
an organization
 External customer- the end
user
 Internal customer- other
divisions of the company that
receive the processed
product.
 Introduction

 What is a product?
 the output of a process carried by
the organization. It may be goods
(e.g. cellphones), software(e.g. a
computer code, a report) or
service (e.g. banking, insurance
 Introduction
 How is customer satisfaction
achieved?
Two Dimensions of Quality:
1. Product Quality
2. Service Quality
 1st Dimention

PRODUCT QUALITY
 Product Quality
1. Functionality. Refers to the core
features and characteristics of a
product.
The definition of functionality as per
ISO/ IEC 9126: 1991:
“ A set of attributes that bear on the
existence of a set of functions and
their specified properties. The
functions are those that satisfy stated
or implied needs.”
 Product Quality
2. Reliability. A car should not breakdown
often. This is the reliability attribute to
quality.
Reliability is measured by mean
(average)time between failures
(MTBF). Reliability is an indicator of
durabilityof products.
For instance, the MTBF of a car can
be specified as 1000 hours of running
or 10000 kilometers.
 Product Quality
3. Usability. A product should be easily
usable. The customer should be able
to use the product easily without the
help of experts.
4. Maintainability. Refers to the ease with
which a product can be maintained
in the original condition. For instance,
when we use a walkman we may
need to change the batteries
periodically.
 Product Quality
5. Efficiency. This is applicable to most of
products. It is the ratio of output to
input
6. Portability. This is more important in the
context of software. It is defined as a
set of attributes that bear on the
ability of software to be transferred
from one environment to another.
 Introduction
 Why Quality?
 Reasons why quality is a
cardinal priority for most
organizations.
 Competition
 Changing customer-the new customer is
not only commanding priority based on
volume but is more demanding about
the “quality system”
 Changing product mix – the shift from
low volume high price to high volume,
low price resulted in a need to reduce
the internal cost of poor quality.
 Introduction
 Product complexity- as systems
have become more complex the
reliability requirements for
suppliers of components have
bome more stringent

 Higher level of customer

satisfaction- higher customer
expectations are getting
spawned by increasing
competition.
 2nd Dimension

SERVICE QUALITY
 Service quality
• Unlike products, every service is made to
order. Therefore, the service quality has
additional features. In availing a service, the
customer interacts more with the service
provider.
• Service delivery is another feature of service
quality. Thus, the additional features of
service quality are:
– Quality of customer service
– Quality of service design
– Quality of service delivery
 Quality of Customer Service
Customer service is important in every
business. In a service industry, meeting
customers and finding out their implied
requirements is more challenging. Therefore,
ability to satisfy customers depends on the
quality of customer service. This includes but is
not limited to:
•How well the customer is received?
•How well the implied requirements are
elucidated?
•How well the customer is treated / handled/
satisfied?
 Quality of Service
Design
• It is important that the
service is designed as per
the requirements of
specific customer.
 Quality of Delivery

• It is important in any sector,

but more crucial in case of
services.
• Defects on delivery should
be zero to satisfy the
customers
Additional attributes of quality, which are
applicable to both products and services:

• Timeliness-no customer likes waiting

• Aestheics- A product or service should not
only perform well but also appear attractive.
• Regulatory Requirements. As stipulated by
the local and federal governments should
be fulfilled by the products or service.
• Requirements of Society
• Conformance to Standards
 History of quality management
…To know the future, know the past!

• Before Industrial Revolution, skilled

craftsmen served both as manufacturers
and inspectors, building quality into their
products through their considerable pride
in their workmanship.
• Industrial Revolution changed this basic
concept to interchangeable parts. Likes
of ;
– F. W. Taylor (“scientific management”
fame) emphasized on the use of scientific
standards equitably to managers as well as
workers.
 History of quality management
…To know the future, know the past!

– Adam Smith who advocated dividing the

labor required to make a product into
simple, repetitive tasks in order to develop
workers’ skills, save time and use
specialized tools
– Frank and Lilian Gilbreth’s Time and Motion
economy, they believed that a way a task
is performed is as important as the time it
takes to do it.
 History of quality management
• Statistical approaches to quality control
started at Western Electric with the
separation of inspection division. Pioneers
like Dr. Walter Shewhart, Deming
W.Edwards and Joseph M. Juran were all
employees of Western Electric.
– Dr. Walter Shewart (1891-1967) developed the
Plan, Do, Check, Act (PDCA) cycle for
continuous improvement which is in use even
today
• After World War II, under General
MacArthur's Japan rebuilding plan,
Deming and Juran went to Japan.

33
Deming W, Edwards
(1900-1993)
• He modified PDCA cycle of
Shewart to the Plan, Do,
Study and Act (PDSA). He
also advocated the extensive
used of statistical quality
control theory to Japanese
industry along with Juran.
 History of quality management

• Deming stressed the importance of

suppliers and customers for the business
development and improvement.
– He believed that people do their best
and it is the system that must change to
improve quality.
– His 14 Points for Management formed the
basis for his advise to top Japanese
management.
 History of quality management
• Joseph M. Juran (1904), developed the
Statistical Quality Handbook for Western
Electric Company. He identified Fitness of
quality and popularized the same
• Juran travelled to Japan to teach is own
theories- that hands-on management was
necessary at all levels of corporation to
ensure quality control and that problems
are opportunities to make improvements.
– His approach is still known today as the
Juran Trilogy; quality planning, quality
control and quality improvement
 History of quality management
 In Japan the following individual took seed
from this training and went on to developed
their own major contributions to what is now
Total Quality Management:
 Kaoru Ishikawa (1915-1989), strongly
advocated the use of cause and effect
diagram to provide a true representation
of the organizational impact and
procedures. He developed Fishbone or
Ishikawa diagram for cause and effect
analyis.
 Taichi Ohno, known as the father of just-in
Time production. He is also the co-creator
of Toyota Production System (TPS)
History of quality management

 Shigeo Shingo worked with Ohno on the TPS

process and developed some of its popular
concepts including poka-yoke (which means
“mistake-proof in Japanese and refers to
taking human judgement out of some types
of production, thereby minimizing human
errors)
 History of quality management
• Next 20 odd years, when top managers in
USA focused on marketing, production
quantity and financial performance,
Japanese managers improved quality at an
unprecedented rate.
• Market started preferring Japanese
products and American companies
suffered immensely.
• America woke up to the quality revolution in
early 1980s. Ford Motor Company consulted
Dr. Deming to help transform its operations.
(By then, 80-year-old Deming was virtually
unknown in USA. Whereas Japanese
government had instituted The Deming Prize
for Quality in 1950.)
 History of quality management
• Managers started to realize that “quality of
management” is more important than
“management of quality.” Birth of the term
Total Quality Management (TQM).
– TQM – Integration of quality principles into
organization’s management systems.
• Early 1990s: Quality management principles
started finding their way in service industry.
FedEx, The Ritz-Carton Hotel Company were
the quality leaders.
• TQM recognized worldwide: Countries like
Korea, India, Spain and Brazil are mounting
efforts to increase quality awareness.
 Historical evolution of TQM
• The historical evolution of Total Quality
Management has taken place in four
stages. The can be categorized as
follows:
1. Quality inspection
2. Quality control
3. Quality assurance
4. Total Quality Management
Characteristics of the different stages in
TQM
 The Deming 14 Point Philosophy

 The Deming Philosophy

Definition of quality, “A product or a service possesses quality if it helps
somebody and enjoys a good and sustainable market.”

Decrease cost because

Improve quality of less rework, fewer Productivity improves
mistakes.

Long-term Capture the market

Stay in with better quality
competitive business
strength and reduced cost.
 Deming’s 14 Point Management

1. Create and publish to all employees a

statement of the aims and purposes of the
company. The management must
demonstrate their commitment to this
statement.
2. Learn the new philosophy.
3. Understand the purpose of inspection – to
reduce the cost and improve the processes.
4. End the practice of awarding business on the
basis of price tag alone.
5. Improve constantly and forever the system
of production and service.
6. Institute training
7. Teach and institute leadership.
8. Drive out fear. Create an environment of
innovation.
9. Optimize the team efforts towards the aims and
purposes of the company.
10. Eliminate exhortations for the workforce.
11. Eliminate numerical quotas for production.
12. Remove the barriers that rob pride of workmanship.
13. Encourage learning and self-improvement.
14. Take action to accomplish the transformation.
 Juran’s Quality Trilogy
Quality Trilogy –
1. Quality planning: Process of preparing to
meet quality goals. Involves understanding
customer needs and developing product
features.
2. Quality control: Process of meeting quality
goals during operations. Control
parameters. Measuring the deviation and
taking action.
3. Quality improvement: Process for breaking
through to unprecedented levels of
performance. Identify areas of
improvement and get the right people to
bring about the change.
 Major Quality Concepts
1. Balance Scorecard – Robert Kaplan and David
Norton, suggest that a business’s executive
team measure progress in four areas that are
equally important
• knowledge
• financial performance
• Internal business process and
• Learning/growth
Using the knowledge to focus the entire organization and its
various programs on “balancing” the scorecard
 Major Quality Concepts
2. ISO Standards - The International Standardization
Organization (ISO).
- headquartered in Switzerland
- more than 100 nations are “members”, that
define and agree on, and abide by a wide
rang of product and process safety and quality
standards
- the idea behind ISO certification is that
products made in different nations be
compatible for use in others.
- this allows manufacturers to buy parts from
suppliers in other countries.
 Major Quality Concepts
- The Quality Management Systems (QMS)
standards are know as “ISO 9000” family of
standards; (ISO 9000-2000, ISO 9001-2000, ISO
9004-2000); the environmental management
system are ISO 14000 and so on.

3. Just-in-Time – a manufacturing theory of

producing just enough product to fill current
orders as they are due. “just –in time for them to
be used”
 Major Quality Concepts

4. Kaizen – a Japanese term fro “unending

improvement”
-Kaizen represents a system in which management
encourages and implements small, incremental
improvements, involving employees as team
members and creating a culture of workers who all
striving to do better
- it focuses on simplifying complex process and
training employees to measurable improve them.
 Major Quality Concepts
5. Quality Circles – based on a Japanese method of
grouping people together in “Quality Control” (QC),
meetings where they shared their expertise and
worked to solved a problem or improve process.

6. Six Sigma – created by Motorola in 1980s. The name

refers to a scientific way of describing quality based
on variations that occur in any process-plus or minus
three “sigmas.” Sigma is the Greek letter that
signifies the standard deviations in a mathematical
formula.
-the “sigma level” quantifies defects per million opportunities
(DPMO)
 Major Quality Concepts

7. TOTAL QUALITY MANAGEMENT – a comprehensive,

organization-wide effort to improve the quality of
products and services, applicable to all
organizations.

- TQM quality is managed by the total effort of an

organization, and that each department or phase
of production is responsible for making its part of
the product or services as flawless as possible before
passing it on the next user or phase.
 Major Quality Concepts

7. TOTAL QUALITY MANAGEMENT – a management

philosophy, a paradigm, a continuous improvement
approach to doing business through a new
management model
 References
Juran, et al. Juran’s Quality Control Handbook, 3rd
Edition McGraw-Hill Book Company, New York
1979.
Subburaj R. ISO 9000 Path to TQM, Allied Publishers,
New Delhi, 1997.
Deming, Out of the Crisis, Cambridge University Press,
Cambridge, 1986
Crosby, Philip B. Quality without Tears, McGraw-Hill
Book Company Singapore, 1986
Feigenbaum, Armand V. Total Quality Control, 3rd
Edition, McGraw-Hill Book Company, Singapore,
1986
 End of Chapter 1
Prepared by:

VINCENT C. CORTIÑAS
Instructor I
CvSU-Tanza