Total Quality Management

Practices and Principles

 INTRODUCTION TO TQM

What is TQM?

TQM is the integration of all functions and

processes within an organization in order to
achieve continuous improvement of the quality of
goods and services. The goal is customer
satisfaction.

“ No doubt , humans are always deficient”

(Al-Quran)
 Total quality Management (TQM)
• Is an enhancement of traditional way of doing
business.
• It is a proven technique to guarantee survival
in world-class competition.
• It is for the most part of common-sense
• It is defined as a set of philosophy and a set of
guiding principles that represents the
foundation of a continuously improving
organization
 Total quality Management (TQM)
• It is the art of managing the whole to achieve
excellence
• It is the application of quantitative methods
and human resources to improve the overall
process in the organization and exceed
customer expectations in the near future.
 TQM
• Total = made up of the whole
• Quality = Degree of excellence of a product or
service
• Management = act or manner of handling,
controlling and directing, etc..
 Approach
TQM requires six basic concepts:
• A committed and involved top management
to provide long-term top to bottom
organizational support
• An unwaivering focus on the customer both
internally and externally
• Effective involvement and utilization of the
entire workforce
 Approach
TQM requires six basic concepts:
• Continuous improvement of the business and
production process
• Treating suppliers as partners
• Establish performance measures for the
process
 New and Old Culture
Quality Element Previous State TQM
Definition Product oriented Customer Oriented
Priorities Second to Service and Cost First among equals of
Service and Cost
Decision Short-term Long-term
Emphasis Detection Prevention
Errors Operations System
Responsibility Quality Control Everyone
Problem Solving Managers Teams
Procurement Price Life-Cycle Cost and
Partnership
Managers Role Plan, Assign, Control and Delegate, Coach, facilitate
Enforce and mentor
 Defining Quality
• When we talk about quality we think of a n
excellent product or service that fulfills or
exceeds our expectations
• Quality can be quantified as follows:

Q= P/E
Where: Q=Quality
P = Performance
E = Expectations
 Defining Quality
• If quality is greater than 1 then the customer
has a good feeling about the product or
service
• The determination of P and E will most likely
be based on perception with the organization
determining performance and the customer
determining expectations
 Dimensions of Quality
• Performance
• Features
• Conformance
• Reliability
• Durability
• Service
• Response
• Aesthetics
• Reputation
 Performance

• It is the primary product characteristics

• It is the main aspect of the product that
convinced the buyer to purchase it
• An example of this would be the brightness of
the picture of you bought a TV set
 Features
• It is known as the secondary product
characteristic
• An example would be the remote control
included to the package if you’re going to buy
a tv set
• Aside from that under the mobile industry
other features would be the wifi, bluetooth,
TV out and others
 Conformance
• It pertains to the compliance or meeting the
specifications of the standards of the industry
or workmanship
• For some companies before they sell their
product in the market it should pass the ISO
standards also known as International
Organization for Standardization
 Reliability
• It is the consistency of performance over time
• It also pertains to the average time before the
unit fails or stop working
• A good example of this one would be the
machineries being used in factories they have
a specific number of years until they fail
 Durability
• It refers to the useful life of the machine
including the repairs
• When its useful life is longer then it is more
durable
• Another measure of this aspect would be the
known brands of different product
 Service
• It is the resolution of problems and complaints
• It includes the service centers of the products
which allows the customers to easily bring the
defective product or malfunctioned service
 Response
• It is all about the human to human interface
• It also includes the courtesy of the service
provider
• Knowing how to interact with your customer is
the key aspect under this area
• Follow the golden rule: Do unto others what
you want others do unto you
 Aesthetics
• It refers to the sensory characteristics of the
product
• It includes the color, texture and smell of the
product that the company is selling
 Reputation
• It is about the past performance of the
company which is a basis used by the
customer in purchasing the product or service
• Customers or buyers purchases items that is
being offered by known companies rather
than buying unknown brands.
 TOTAL QUALITY MANAGEMENT

“MUST KNOW” CONCEPTS FOR Managers

 The Three Quality Gurus

• Deming: the best known of the “early” pioneers, is

credited with popularizing quality control in Japan in early
1950s.Today, he is regarded as a national hero in that
country and is the father of the world famous Deming prize
for quality.
 JURAN
• Juran, like Deming was invited to Japan in
1954 by the union of Japanese Scientists and
engineers.

• Juran defines quality as fitness for use in terms

of design, conformance, availability, safety and
field use. He focuses on top-down
management and technical methods rather than
worker pride and satisfaction.
 Philip Crosby: author of popular book Quality is
Free. His absolutes of quality are:
• Quality is defined as conformance to
requirements, not “goodness”
• The system for achieving quality is
prevention, not appraisal.
• The performance standard is zero defects, not
“that’s close enough”
• The measurement of quality is the price of
non-conformance, not indexes.
 Commonality of Themes of Quality Gurus

• Inspection is never the answer to quality improvement, nor

is “policing”.

• Involvement of leadership and top management is

essential to the necessary culture of commitment to
quality.

• A program for quality requires organization-wide efforts

and long term commitment, accompanied by the necessary
investment in training.

• Quality is first and schedules are second.

 DIFINITION OF QUALITY
• The concept and vocabulary of quality are elusive. Different people
interpret quality differently. Few can define quality in measurable
terms that can be proved operationalized. When asked what
differentiates their product or service;

The banker will answer” service”

The healthcare worker will answer “quality health care”

The hotel employee will answer “customer satisfaction”

The manufacturer will simply answer “quality product”

 Five Approaches of Defining Quality

• Harvard professor David Garvin, in his book

Managing Quality summarized five principal
approaches to define quality.

• Transcendent
• Product based
• User based
• Manufacturing based
• Value based
 Transcendental view

• Those who hold the transcendental view would say “I can’t

define it, but I know it when I see it”
• Advertisers are fond of promoting products in these terms.
“ Where shopping is a pleasure” (supermarket). “We love to
fly and it shows" (airline).
Television and print media are awash with such indefinable
claims and therein lies the problem:
• Quality is difficult to define or to operationalize. It thus
becomes elusive when using the approach as basis for
competitive advantage. Moreover, the functions of design,
production and service may find it difficult to use the
definition as a basis for quality management.
 PRODUCT BASED

• Quality is viewed as a quantifiable or measurable

characteristic or attribute. For example durability or
reliability can be measured and the engineer can design to
that benchmark.
• Quality is determined objectively.
• Although this approach has many benefits, it has limitation
as well. Where quality is based on individual taste or
preference, the benchmark for measurement may be
misleading.
 USER BASED
It is based on idea that quality is an individual matter
and products that best satisfy their preferences are
those with the highest quality. This is rational
approach but leads to two problems;

 Consumer preference vary widely and it is

difficult to aggregate these preferences into
products with wide appeal. This leads to the
choice between a niche strategy or a market
aggregation approach which tries to identify those
product attributes that meet the needs of the largest
number of consumers.
 System
MANAGEMENT OF
PROCESS QUALITY

CUSTOMER
FOCUS
Driver HUMAN RESOURCE AND
DEVELOPMENT AND SATISFACTION
MANAGEMENT
SENIOR
EXECUTIVE
LEADERSHIP
STRATEGIC QUALITY
PLANNING QUALITY
AND
OPERATIONAL
RESULTS
INFORMATION
AND ANALYSIS

System Approach for TQM

 MANUFACTURING BASED
• Manufacturing-based definitions are
concerned primarily with engineering and
manufacturing practices and use the
universal definition of “conformance to
requirements”.

• Requirements or specifications are

established by design and any deviation
implies a reduction in quality.
 MANUFACTURING BASED
• The concept applies to services as well as
product. Excellence in quality is not
necessarily in the eye of the beholder but
rather in the standards set by the
organization.
• This approach has the serious weakness.
The consumer’s perception of quality is
equated with conformance and hence is
internally focused.
 Value Based
• It is defined in term of costs and prices as well
as number of other attributes. Thus, the
consumer’s purchased decision is based on
quality at an acceptable price. This approach is
reflected in the popular Consumer Reports
magazine which ranks products and services
based on two criteria: Quality and Value.

• The highest quality is not usually the best

value. That designation is assigned to the
“best- buy” product or service.
 Characteristics of TQM Leader

• Visible, Committed and Knowledgeable

• A Missionary Zeal
• Aggressive Targets
• Strong Drivers
• Communication of Values
• Organization
• Customers Contact
 Total Quality Organizations HRM

Five Principles are:

• Quality Work the First Time
• Focus on the Customer
• Strategic Holistic Approach to Improvement
• CI as a Way of Life
• Mutual Respect and Teamwork
 Customer Satisfaction
Three Part System

Customer Expectations

Company Operations Customer Satisfaction

(Processes)
 Indicators for Customer Satisfaction

• Frontline empowerment
• Excellent hiring, training, attitude and morale for front line
employees
• Proactive customer service system
• Proactive management of relationship with customers
• Use of all listening posts
• Quality requirements of market segment
• Commitment to customers
• Understanding customer requirements
• Service standards meeting customers requirements
 Cost of Quality
Three Views of quality Costs
Higher quality means higher cost.
• Quality attributes such as performance and features
cost more in terms of labor, material, design and other
costly resources.
• The additional benefits from improved quality do not
compensate for additional expense.
The cost of improving quality is less than the
resulting savings.
• The saving result from less rework, scrap and other
direct expenses related defects.
• This is said to account for the focus on continuous
improvement of processes in Japanese firms.
 Three Views of quality Costs

Quality costs are those incurred in excess of those

that would have been incurred if the product were
built or the service performed exactly right the first
time.
 This view is held by adherents of TQM philosophy.
Costs include not only those that are direct, but also
those resulting from lost customers, lost market share
and the many hidden costs and foregone opportunities
not identified by modern cost accounting systems.
 Quality Costs

COST OF QUALITY IS THE COST OF

NON QUALITY

1: 10:100 Rule
“A stitch in time saves nine”
 Benefits of TQM

• Greater customer loyalty

• Market share improvement
• Higher stock prices
• Reduced service calls
• Higher prices
• Greater productivity
 Conclusion

Remember the earth revolves around the

CUSTOMER. Quality begets customers and
customers beget quality. Let us all have action
plans to support quality, this will make the
world happy and earn us the blessing of God
Almighty.

“Actions are direct reflection of one’s

intentions” (Al-Quran)
 Who is Dr. Edward Deming
• He is a protégé of Dr. Walter Shewhart who
pioneered Statistical Process Control (SPC) at
Bell Laboratories
• He taught Statistical Quality Control as a part
of the wartime production efforts SPC
concepts and the importance of quality to the
leading CEOs of Japanese industry
 Deming’s 14 point theory
• Create and Publish the aims of the organization
• Learn the new philosophy
• Understand the purpose of inspection
• Stop awarding the business based on price alone
• Improve constantly and forever the system
• Institute training
• Teach and institute leadership
• Drive out fear, create trust and create a climate
for innovation
 Deming’s 14 point theory
• Optimize the efforts of teams, groups and staff
areas
• Eliminate exhortations for the work force
• Eliminate numerical quotas for the workforce
• Eliminate management by objective
• Remove barriers that rob people of pride of
workmanship
• Encourage education and self-improvement for
everyone
• Take action to accomplish the transformation
 Obstacles to TQM
accdg. To Robert J. Masters
• Lack of Management Commitment
• Improper Planning
• Inability to Change Organizational
Culture
• Lack of Continuous Training and
Education
 Obstacles to TQM
accdg. To Robert J. Masters
• Incompatible Organizational Structure and
Isolated Individuals and Departments
• Ineffective Measurement Techniques and
Lack of Access to data and Results
• Paying Inadequate attention to internal and
external customers
• Inadequate use of empowerment and
teamwork