Principles & Philosophies of Quality management QM 0011

Q1. Explain Total Quality Management. What are the Costs involved with respect to
‘Quality’?
Ans: Total Quality Management is defined as management approach of an organization,
centred on quality, based on the participation of all its members & aiming at long term
success through customer satisfaction and benefits to all members of the organisation and
to the society. It is based on the premise that quality of any product or any process is
responsibility of everyone who is responsible for creating the product or rendering the
services. Total Quality Management (TQM) can be applied to any type of organisation. It is
based on quality management from customer’s point of view. TQM is based on concepts of
Customer focus, Continuous improvement.

The main feature of TQM is the company’s focus on its customers. The main asset of an
organisation is the customer. The success of an organization depends on its customers.TQM
implies an organizational obsession with meeting or exceeding customers expectations so
that customers are delighted.

TQM is mainly concerned with continuous improvement in all work, from high level strategic
planning and decision-making, to detailed execution of work elements on the shop floor. It
stems from the belief that mistakes can be avoided and defects can be prevented. It leads to
continuously improving results, in all aspects of work, as a result of continuously improving
capabilities, people, processes, and technology and machine capabilities.

Advantages of TQM are:

(i) To build quality into products & customer satisfaction.

(ii) To create a cheerful workplace & show respect for humanity through QC circles
with all member participation.
(iii) To improve corporate health & character to upgrade quality & to increase
profits.

Cost of quality:

It is important that the effectiveness of a quality system be measured in financial terms. The
impact of an effective quality system upon the organization’s profit & loss statement can be
highly significant, particularly by improvement of operations, resulting in reduced losses due
to error and by making a contribution to customer stratification. Such measurement and
reporting can provide a means for identifying inefficient activities and initiating internal
improvement activities. Cost of quality can be divided into two categories mainly quality
control cost & quality failure cost.

Quality control cost: It is the cost necessary for achieving high quality. There are two type :

Kanchan M. Ghatnekar Roll No.571118549

 Principles & Philosophies of Quality management QM 0011

a) Prevention cost: All cost incurred in the process of preventing poor quality from
occurring. It includes quality planning, quality system, training, improvement
projects, new product review, design verification & validation.
b) Appraisal cost: All cost incurred in the process of uncovering defects. It includes
testing, inspection and examination, calibration, evaluation of stocks, material and
services consumed in testing.

Quality Failure cost: It is the cost of consequences of poor quality. They are:

a) Internal Failure: It is the cost resulting from a product failing to meet the quality
requirements prior to delivery. It includes re performing a service, reprocessing,
rework, retest, scrap.
b) External Failure: It is the cost resulting from a product failing to meet the quality
requirements after delivery. These costs can be particularly damaging because
customer faith and loyalty can be difficult to regain. External failure can sometimes
put a company out of business. External failure costs tend to be particularly high for
service organizations. The reason is that with a service the customer spends much
time in the service delivery system and there are fewer opportunities to correct
defects than there are in manufacturing. It includes product maintenance and repair,
warranties and returns, direct costs and allowances, product recall costs, liability
costs etc.

Q2 Discuss Deming’s work on “Quality Management”.

Ans: Deming was an American statistician, professor, author, lecturer and consultant.
Deming made a significant contribution to Japan’s late reputation for innovative high
quality products and its economic power. In the year 1940 Deming began to introduce
statistical quality control into industrial operations. In 1941 he and two other experts
began teaching statistical quality control to inspectors & engineers.

In the year 1946 he started private practice and for more than 40 years his firm served
its clientele, manufacturers, telephone companies, railways, trucking companies,
hospitals, governments & research organizations. Dr Deming affected a quality
revolution of gargantuan significance on American manufacturers & consumers through
his ideas quality of products improved and also customer satisfaction. After World War II
Dr Deming went to Japan where he directed the Japanese for producing innovative
quality products. In Japan he instructed top executives & engineers in quality
management which proved to be a driving force behind the nation’s economic rise. His
contribution directly affected Japan’s phenomenal export-led growth & its current
technological leadership in automobiles, shipbuilding & electronics.

Dr Deming placed great importance & responsibility on management, at the individual &
company level, believing management to be responsible for 94 % of quality problems.

Kanchan M. Ghatnekar Roll No.571118549

 Principles & Philosophies of Quality management QM 0011

His fourteen point plan is a complete philosophy of management that can be applied to
small or large organizations in the public, private or service sector. These are:

 Constancy of purpose
 The new philosophy
 Cease dependence on mass inspection
 End lowest tender contracts
 Improve every process
 Institute training on the job
 Institute leadership
 Drive out fear
 Break down barrier
 Eliminate exhortations
 Eliminate arbitrary numerical targets
 Permit pride of workmanship
 Encourage education
 Top management commitment & action.

Dr Deming taught that by adopting appropriate principle of management, organizations can

increase quality & simultaneously reduce costs. One of Deming’s essential theories in his
System of Profound Knowledge. His knowledge system consists for four interrelated parts:
(i) Theory of Optimization (ii) Theory of Variation (iii) Theory of knowledge (iv) Theory of
Psychology. Deming also encouraged a systematic approach to problem solving & promoted
the widely known Plan Do Check Act (PDCA) cycle. The PDCA cycle is also known as the
deming cycle.

Q3. Describe the outstanding contributions of Dr. Kaoru Ishikawa towards improvement of
the human aspects of quality. How did Dr. Ishikawa develop a specific Japanese quality
strategy?
Ans: Kaoru Ishikawa is regarded as the leading Japanese Contributor to quality
management. He was involved with quality movement in its earliest beginning. According to
Ishikawa participation of workers from top to bottom of an organization & from the start to
finish of the product life cycle is important. There should be a management philosophy that
respects the humanity. He introduced the concept of quality circles in Japan. The quality
circle concept represents the bottom up approach. His contributions are extensive but
perhaps the most noteworthy are his development of the total quality viewpoint, his work
on statistical quality control, his emphasis on the human side of quality & his inventions of
Ishikawa diagram & the use of the “7 tools”. He is regarded as the father of quality circles.
He insisted that “total quality” implies participation by everyone in the organization.
It is achieved through everyone participating in teams rather than as individuals.
Ishikawa’s most important contribution has been his key role in the development of a
specifically Japanese quality strategy.

Kanchan M. Ghatnekar Roll No.571118549

 Principles & Philosophies of Quality management QM 0011

 The hall mark of the Japanese approach is involvement in quality not only top to
bottom within the organization but also start to finish in the product life cycle.
 The bottom up approach is best exemplified by the quality circle.
 He was always aware about the top management support in Japan’s all
encompassing quality strategy.
 The famous tool i.e the cause and effect diagram also known as the Ishikawa diagram
can be used easily to solve & analyze problems.
 He developed the rigorous audit system that determines whether companies qualify
for the Deming Prize.
 He was also involved in the development of a quality control system for new product
development.
 He was also involved in efforts to promote the quality ideas throughout Japan both
in industry & among customers.
 He believed in the need for standards & according to his view effective standards
must be built on quality analysis of customer needs.
 He believed that quality improvement initiatives must be organization wide in order
to be successful & sustainable over the long term.

Q5. State the purposes of Malcolm Baldrige Quality Award

Ans: MBQA is an annual award presented by the president of US to US organization in
recognition of their performance excellence in quality. MBQA was created by public law &
signed into law on August 20, 1987. The award program led to the creation of a new public
private partnership. MBQA has been considered as an important step forward in promoting
the cause of quality in the US. It focuses attention on those operational factors that must be
improved upon to achieve excellence.
The Malcolm Baldrige quality award serves the following purpose:
 To identify Baldrige Award recipients that will serve as role models for other
organizations
 To help American companies to attain excellence in quality & productivity.
 To help organizations assess their improvement efforts, diagnose their overall
performance management system, and identify their strengths and opportunities for
improvement.
 To help organization focus on the market & offer ever improving values to
customers.
 To encourage & empower people to work in teams.
 To make organizations to believe in continuous improvement
 To promote a transparent leadership process for achieving excellence.
 To promote personal & organizational learning.
 To gather information from the winners about the quality improvement actions &
results etc. & provide them as rewarding guidelines to other organizations.

Q6. What are quality circles? Discuss the concept and philosophies of quality circles. Explain
the significant characteristics of quality circles.
Ans: Quality Circle is a small group of employees within the same work area or doing a
similar type of work who voluntarily meet regularly to identify analyse & resolve work

Kanchan M. Ghatnekar Roll No.571118549

 Principles & Philosophies of Quality management QM 0011

related problems leading to an improvement in their total performance & enrichment of

their work life. Quality circles are integral part of total quality management where in the
internal forces of employee involvement & the continuous improvements drives the
company towards better quality.
Most organizations are engaged in the production of products or services intend to satisfy
customer needs by solving all the problems. Quality circles takes up to solve generally two
types of problems:
(i) Problems concerning functional aspects.
(ii) Problems concerning behavioural aspects.
Quality circles are not normally paid a share of the cost benefit of any improvements but
usually a proportion of the savings made is spent on improvements to the work
environment. The circle is empowered to promote and bring quality improvements through
to fruition. Though quality circles are not the silver bullet solution for quality improvement,
with the right top end management commitment, resources, and organization, they can
support continuous quality improvement at shop floor level.
Concept behind Quality circles is :
(i) It has a social focus hence they not only improve the performance or an
organization, but also motivate and enrich the work lives of fellow employees.
(ii) It is a problem solving technique i.e analyzing the context of a problems and its
situation then defining exactly what the problem is and the relationship between its
component parts. And creating a solution for the same.
(iii) It deals with product quality & aims at improving the quality of life.
(iv) It contributes to improvement & development of the company.

Significant characteristics / features of QC are:

 Quality circles are formed by small number of people. If number of people willing to
participate is large then more quality circles are formed who do similar work.
 Source of members of quality circles is from the same work area or doing similar
work so that the problem they select will be familiar to all of them.
 Membership of the QC is voluntary
 Members meet regularly for about an hour each week to identify, analyze & resolve
to work on related problems for improvements in their total performance.
 The group selects the problems which are to be solved also many times the
management may steer them especially on sensitive issues
 Leaders are trained in the entire process of quality control.
 Team members are trained in communication & problem solving skills
 Team members need to have support from senior management.
 Solutions are recommended to management & whatever possible the group is given
the authority to implement the solutions proposed.
 QC enriches the work life of employees.

Kanchan M. Ghatnekar Roll No.571118549