HANDOUTS BY TOTAL QUALITY MANAGEMENT Dexter Ermin P. Duma, MPRM Total Quality Management - Meaning and Important Concepts To understand the meaning of “Total quality management”, let us first know what does Quality mean Total otal Quality Quality Managemen Managementt is a managemen managementt approach approach that originated originated in the !"#$s and has steadily %ecome more popular since the early !"&$s' Total Quality is a description of the culture, attitude attitude and organi(at organi(ation ion of a company company that stri)es stri)es to pro)ide pro)ide customers customers with products products and ser)ices that satisfy their needs' The culture requires quality in all aspects of the company*s operations, with processes %eing done right the first time and defects and waste eradicated from operations' Total Quality Management, TQM, is a method %y which management and employees can %ecome in)o in)ol) l)ed ed in the the cont contin inuo uous us impr impro) o)em emen entt of the the prod produc ucti tion on of good goods s and and ser) ser)ic ices es'' It is a com%ination of quality and management tools aimed at increasing %usiness and reducing losses due to wasteful practices' +ome +ome of the compa companie nies s who ha)e ha)e implem implement ented ed TQM includ include e ord ord Mot Motor or Compan Company y, hilli hillips ps ! +emiconductor, +./ Car%on, Motorola and Toyota Motor Company'
TQM 0efined TQM is a management philosophy that seeks to integrate all organi(ational functions 1marketing, financ finance, e, design design,, engine engineeri ering, ng, and and produc productio tion, n, custom customer er ser)ic ser)ice, e, etc'2 etc'2 to foc focus us on meetin meeting g customer needs and organi(ational o%3ecti)es' TQM )iews an organi(ation as a collection of processes' It maintains that organi(ations must stri)e to continuously impro)e these processes %y incorporating the knowledge and e4periences of workers' The simple o%3ecti)e of TQM is “0o the right things, right the first time, e)ery time'” TQM is infinitely )aria%le and adapta%le' 5lthough originally applied to manufacturing operations, and for a num%er of years only used in that area, TQM is now %ecoming recogni(ed as a generic managemen managementt tool, 3ust as applica%l applica%le e in ser)ice ser)ice and pu%lic sector sector organi(ati organi(ations' ons' There are a num%er num%er of e)olution e)olutionary ary strands, strands, with different different sectors sectors creating their own )ersions )ersions from the common ancestor' TQM is the foundation for acti)ities, which include6 • • • • • • • • • • • • •
Commitment %y senior management and all employees Meeting customer requirements 7educing de)elopment cycle times 8ust in time9demand flow manufacturing Impro)ement teams 7educing product and ser)ice costs +ystems to facilitate impro)ement /ine management ownership :mployee in)ol)ement and empowerment 7ecognition and cele%ration Challenging quantified goals and %enchmarking ocus on processes 9 impro)ement plans +pecific incorporation in strategic planning
rinciples of TQM The key principles of TQM are as following6 ; Management !mmitment
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• • • •
lan 1dri)e, direct2 0o 1deploy, support, participate2 Check 1re)iew2 5ct 1recogni(e, communicate, re)ise2 Em"#!$ee Em"!%erment
• • • •
Training +uggestion scheme Measurement and recognition :4cellence teams &a't Ba(e) De'i(i!n Ma*ing
• • • •
+C 1statistical process control2 0<:, M:5 The = statistical tools T<+ 1ord &0 > team-oriented pro%lem sol)ing2 !ntinu!u( Im"r!+ement
• • • •
+ystematic measurement measurement and focus on C
• • • •
+upplier partnership +er)ice relationship with internal customers ?e)er compromise quality Customer dri)en standards The Concept of Continuous Impro)ement %y TQM TQM is mainly concerned with continuous impro)ement in all work, from high le)el strategic planning and decision-making, to detailed e4ecution of work elements on the shop floor' It stems from from the the %eli %elief ef that that mist mistak akes es can can %e a)oi a)oide ded d and and defe defect cts s can can %e pre) pre)en ente ted' d' It lead leads s to continuou continuously sly impro)ing impro)ing results, results, in all aspects of work, work, as a result result of continuou continuously sly impro)ing capa%ilities, people, processes, technology and machine capa%ilities' Continuous impro)ement must deal not only with impro)ing results, %ut more importantly with impro)ing capa%ilities to produce %etter results in the future' The fi)e ma3or areas of focus for capa%ility impro)ement are demand generation, supply generation, technology, operations and people capa%ility' capa%ility' 5 central principle of TQM is that mistakes may %e made %y people, %ut most of them are caused, or at least permitted, %y faulty systems and processes' This means that the root cause of such mistakes mistakes can %e identified identified and eliminated eliminated,, and repetition repetition can %e pre)ented pre)ented %y changing changing the ! process' There are three ma3or mechanisms of pre)ention6
!' @'
re) re)en enti ting ng mist mistak akes es 1def 1defec ects ts22 fro from m occ occur urri ring ng 1mi 1mist stak akee-pr proo oofi fing ng or or pok pokaa-y yoke2 oke2'' Aher Ahere e mist mistak akes es can* can*tt %e a%s a%sol olut utel ely y pre pre)e )ent nted ed,, dete detect ctin ing g them them ear early ly to to pre pre)e )ent nt the them m %ein %eing g passed down the )alue-added chain 1inspection at source or %y the ne4t operation2' ;' Aher Ahere e mist mistak akes es rec recur ur,, sto stopp ppin ing g prod produc ucti tion on unt until il the the pro proce cess ss can can %e %e corr correc ecte ted, d, to to pre) pre)en entt the production of more defects' 1stop in time2'
Qua#it$ reer( t! a "arameter %-i'- )e'i)e( t-e (u"eri!rit$ !r ineri!rit$ ! a "r!)u't !r (er+i'e' (er+i'e' Quality can %e defined as an attri%ute which differentiates a product or ser)ice from its
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compet competito itors' rs' Qualit Quality y plays plays an essent essential ial role role in e)ery e)ery %usine %usiness' ss' Busine Business ss marke marketer ters s need need to emphasi(e on quality of their %rands o)er quantity to sur)i)e the cut throat competition' Ahy would a customer come to you if your competitor is also offering the same product The difference has to %e there in quality' our our %rand needs to %e superior for it to stand apart from the rest' Total Quality Management T!ta# Qua#it$ management i( )eine) a( a '!ntinu!u( e!rt $ t-e management a( %e## a( em"#!$ee( ! a "arti'u#ar !rgani/ati!n t! en(ure #!ng term 'u(t!mer #!$a#t$ an) 'u(t!mer (ati(a'ti!n' (ati(a'ti!n' 7emem%er, 7emem%er, one happy and satisfied customer %rings ten new customers along with him whereas one disappointed indi)idual will spread %ad word of mouth and spoil se)eral of your e4isting as well as potential customers' ou need to gi)e something e4tra to your customers to e4pect loyalty in return' Quality can %e measured in terms of dura%ility, relia%ility, usage and so on' Total quality management is a structured effort %y employees to continuously impro)e the quality of their products and ser)ices through proper feed%acks and research' :nsuring superior quality of a product or ser)ice is not the responsi%ility of a single mem%er' :)ery indi)idual who recei)es his9her paycheck from the organi(ation has to contri%ute equally to design design foo foolpr lproof oof proces processes ses and system systems s which which would would e)entu e)entuall ally y ensur ensure e superi superior or qualit quality y of products and ser)ices' Total Quality management is indeed a 3oint effort of management, staff mem%ers, workforce, suppliers in order to meet and e4ceed customer satisfaction le)el' ou can*t 3ust %lame one person for not adhering to quality measures' The responsi%ility lies on the shoulder of e)eryone who is e)en remotely associated with the organi(ation' A' :dwards 0eming, 8oseph M' 8uran, and 5rmand D' eigen%aum 3ointly de)eloped the concept of total quality management' Total Quality management originated in the manufacturing sector, %ut can %e applied to almost all organi(ations' T!ta# 0ua#it$ management en(ure( t-at e+er$ (ing#e em"#!$ee i( %!r*ing t!%ar)( t-e im"r!+ement ! %!r* 'u#ture, "r!'e((e(, (er+i'e(, ($(tem( an) (! !n t! en(ure #!ng term (u''e((' (u''e((' Total Total Quality management can %e di)ided into four categories6
lan
0o
Check
5ct
5lso referred to as 0C5 cycle' P#anning P-a(e lanning is the most crucial phase of total quality management' In this phase employees ha)e to come up with their pro%lems and queries which need to %e addressed' They need to come up with the )arious challenges they face in their day to day operations and also analy(e the pro%lem*s root cause' :mployees are required to do necessary research and collect rele)ant data which would help them find solutions to all the pro%lems' D!ing P-a(e In the doing phase, employees de)elop a solution for the pro%lems defined in planning phase' +trategies are de)ised and implemented to o)ercome the challenges faced %y employees' The effecti)eness of solutions and strategies is also measured in this stage'
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-e'*ing P-a(e Checking phase is the stage where people actually do a comparison analysis of %efore and after data to confirm the effecti)eness of the processes and measure the results' A'ting P-a(e In this this phase phase employ employees ees docume document nt their their result results s and prepa prepare re themse themsel)e l)es s to addres address s other other pro%lems' Importance of Quality Management 1Qua#it$ 1Qua#it$ management management2 2 en(ure( en(ure( (u"eri!r (u"eri!r 0ua#it$ 0ua#it$ "r!)u't( "r!)u't( an) (er+i'e( (er+i'e('' Qual Qualit ity y of a product can %e measured in terms of performance, relia%ility and dura%ility' Quality is a crucial parameter which differentiates an organi(ation from its competitors' Quality management tools ensure changes in the systems and processes which e)entually result in superior quality products and ser)ices' Quality management methods such as Total Quality management or +i4 +igma ha)e a common goal - to deli)er a high quality product' Quality management is essential to create superior quality products which not only meet %ut also e4ceed customer satisfaction' Customers need need to %e satisf satisfied ied with with your your %ran %rand' d' Busine Business ss market marketers ers are are succe successf ssful ul only only when when they they emphasi(e on quality rather than quantity' Quality products ensure that you sur)i)e the cut throat competition with a smile' Qua#it$ management i( e((entia# !r 'u(t!mer (ati(a'ti!n %-i'- e+entua##$ #ea)( t! 'u(t!mer 'u(t!mer #!$a#t$ #!$a#t$' Eo Eow w do you you thin think k %usi %usine ness sses es run run 0o %usi %usine ness sses es thri thri)e )e only only on new new customers It is important for e)ery %usiness to ha)e some loyal customers' ou need to ha)e some customers who would come %ack to your organi(ation no matter what' Aould you %uy a ?okia mo%ile again if the pre)ious handset was defecti)e The answer is ?<' Customers would return to your organi(ation only if they are satisfied with your products and ser)ices' Make sure the end-user is happy with your product' 7emem%er, a customer would %e happy happy and and satisf satisfied ied only only when when your your produc productt meets meets his e4pect e4pectat ation ions s and fulfil fulfills ls his needs' needs' Fnderstand what the customer e4pects from you ind out what actually his need is Collect rele)ant data which would gi)e you more insight into customer*s needs and demands' Customer feed%acks should %e collected on a regular %asis and carefully monitored' Quality management ensures high quality products and ser)ices %y eliminating defects and incorporating continuous changes and impro)ements in the system' Eigh quality products in turn lead to loyal and satisfied customers who %ring ten new customers along with them' 0o not forget that you might sa)e some money %y ignoring quality management processes %ut ultimately lose out on your ma3or customers, thus incurring huge losses' Quality management ensures that you deli)er products as per promises made to the customers through )arious modes of promotions' Qua#it$ management t!!#( -e#" an !rgani/ati!n t! )e(ign an) 'reate a "r!)u't %-i't-e 'u(t!mer a'tua##$ %ant( an) )e(ire(' )e(ire( ' Qua#it Qua#it$ $ Manage Managemen mentt en(ure en(ure( ( in'rea in'rea(e) (e) re+enu re+enue( e( an) -ig-er -ig-er "r!)u "r!)u'ti 'ti+it +it$ $ !r t-e !rgani/ati!n' !rgani/ati!n' 7emem%er, if an organi(ation is earning, employees are also earning' :mployees are frustrated only when their salaries or other payments are not released on time' es, es, money is a strong moti)ating factor' Aould you feel like working if your organi(ation does not gi)e you salary on time 5sk yourself' +alaries are released on time only when there is free cash flow' Implementin Implementing g Quality Quality managemen managementt tools ensure high customer customer loyalty loyalty,, thus %etter %etter %usiness, %usiness, increased increased cash flow, flow, satisfied satisfied employees employees,, healthy healthy workplace workplace and so on' Quality Quality managemen managementt processes make the organi(ation a %etter place to work' 7emo)e unnecessary processes which merely waste employee*s time and do not contri%ute much to the organi(ation*s producti)ity' Quality management ena%les employees to deli)er more work in less time' Qua#it$ Qua#it$ management management -e#"( !rgani/ati! !rgani/ati!n( n( t! re)u'e re)u'e %a(te an) in+ent!r$ in+ent!r$'' It ena% ena%le les s employees to work closely with suppliers and incorporate “8ust in Time” hilosophy' Qualit Quality y manage managemen mentt ensure ensures s clo close se coord coordina inatio tion n %etwee %etween n employ employees ees of an organi organi(at (ation ion'' It inculcates a strong feeling of team work in the employees' Total Quality Management Models
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Total Quality Quality Manage Managemen mentt is a com%in com%ined ed effort effort of %oth %oth top le)el le)el manage managemen mentt as well well as employees of an organi(ation to formulate effecti)e strategies and policies to deli)er high quality products which not only meet %ut also e4ceed customer satisfaction' Total Total Quality management ena%les employees to focus on quality than quantity and stri)e hard to e4cel e4cel in whate)er whate)er they do' 5ccording 5ccording to total quality management, management, customer customer feed%acks feed%acks and e4pectations are most essential when it comes to formulating and implementing new strategies to deli)er superior products than competitors and e)entually yield higher re)enues and profits for the organi(ation' Credits for the process of total quality management go to many philosophers and their teachings' 0rucker, 8uran, 0eming, Ishikawa, Cros%y, eigen%aum and many other indi)iduals who ha)e in due course of time studied organi(ational management management ha)e contri%uted effecti)ely to the process of total quality management' There are many models of total quality management and it is really not necessary that e)ery organi(ation should select and implement the same model' &!##!%ing are t-e +ari!u( m!)e#( ! t!ta# 0ua#it$ management3
0eming 5pplication ri(e
Malcolm Baldrige Criteria for erformance erformance :4cellence
:uropean oundation for Quality Management, and
I+< quality management standards
Customers and their feed%acks are the foundation of e)ery Total Quality Management model' In simpler words, Total Quality Management %egins with understanding customers, their needs and what what they they e4pect e4pect from from the organ organi(a i(atio tion' n' 0esign 0esign foo foolpr lproof oof proces processes ses and system systems s to col collec lectt customer data, information to further study, analy(e and act accordingly' +uch acti)ities not only help you understand your target customers %ut also predict customer %eha)iour' %eha)iour' 5s a %usine %usiness ss marke marketer ter,, you need need to know know the age group group of your your target target custom customers ers,, their their prefer preferenc ences es and needs' needs' :mploy :mployees ees need need to know know how their their produc products ts or ser)ic ser)ices es can can fulfil fulfil customer needs and demands' Total Quality Management model requires meticulous planning and research' :)ery total quality manag manageme ement nt model model integr integrat ates es custom customer er feed%a feed%acks cks with with rele)a rele)ant nt inform informati ation on and plans plans accordingly to design effecti)e strategies to achie)e high quality products' +trategies formulated to yield %etter quality products need to %e e)aluated and re)iewed from time to time' 7emem%er, customers are satisfied only when products meet their e4pectations, fulfil their needs and are )alue for money' Their o)erall e4perience with the organi(ation needs to %e pleasant for them to %e happy and return to the organi(ation e)en the ne4t time' Continuou Continuous s impro)em impro)ements ents,, changes changes and modificati modifications ons in the e4isting e4isting processes processes according according to customer e4pectations are necessary to yield higher profits' rocesses can*t %e same always' If a customer complaints a%out a particular product of yours, find out the root cause of pro%lem' Fnderstand and implement necessary total quality management models to rectify the pro%lem, remo)e the defect for a high quality product' T-e (u''e((u# (u''e((u# im"#ementati! im"#ementati!n n ! T!ta# 0ua#it$ Management Management m!)e# nee)( nee)( exten(i+e exten(i+e "#anning an) m!(t im"!rtant#$ "arti'i"ati!n ! e+er$ (ing#e memer %-! i( eneitte) !ut ! t-e !rgani/ati!n4Management, (u""#ier(, '#ient( an) e+en 'u(t!mer(5 ' Aithout the parti particip cipati ation on of each each and and e)ery e)ery employ employee, ee, total total qualit quality y manag manageme ement nt model model would would %e a complete failure' Total Total Quality Management model %egins with research and collecting information a%out end-users followed %y planning and full participation of employees for successful implementation' Top le)el Mana Ma nage geme ment nt need needs s to make make othe otherr team team mem% mem%er ers s awar aware e of the the %ene %enefit fits s of tota totall qual qualit ity y manag manageme ement nt proces process, s, import importanc ance e of qualit quality y to sur)i sur)i)e )e in the long long run and how they can can implement )arious TQM models %y prioriti(ing their customers and their feed%acks' Quality Management Tools
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Quality Management tools help organi(ation collect and analy(e data for employees to easily understand and interpret information' Quality Management models require e4tensi)e planning and collecting rele)ant information a%out end-users' Customer feed%acks and e4pectations need to %e carefully monitored and e)aluated to deli)er superior quality products' Qua#it$ Management t!!#( -e#" em"#!$ee( i)enti$ t-e '!mm!n "r!#em( %-i'- are !''urring re"eate)#$ an) a#(! t-eir r!!t 'au(e(' 'au(e( ' Quality Management tools play a crucial role in impro)ing the quality of products and ser)ices' Aith the help of Quality Management tools employees can easily collect the data as well as organi(e the collected data which would further help in analy(ing the same and e)entually come to concrete solutions for %etter quality products' Quality Management tools make the data easy to understand and ena%le employees to identify processes to rectify defects and find solutions to specific pro%lems' &!##!%ing are t-e 0ua#it$ management t!!#(3
-e'* Li(t 6 Check 6 Check lists are useful in collecting data and information easily 'Check list also helps employees employees to identify identify pro%lems pro%lems which pre)ent pre)ent an organi(at organi(ation ion to deli)er deli)er quality quality products which would meet and e4ceed customer e4pectations' Check lists are nothing %ut a long list of identified pro%lems which need to %e addressed'
Gra"-( 6 .raphs 6 .raphs are the simplest and most commonly used quality management tools' .raphs help to identify whether processes and systems are as per the e4pected le)el or not and if not also record the le)el of de)iation from the standard specifications'
+i4 +igma and Quality Management +i4 +igma is a %usiness management strategy which aims at impro)ing the quality of processes %y minimi(ing and e)entually remo)ing the errors and )ariations' The concept of +i4 +igma was introduced %y Motorola in !"&H, %ut was populari(ed %y 8ack Aelch who incorporated the strategy in his %usiness processes at .eneral :lectric' The concept of +i4 +igma came into e4istence when one of Motorola*s senior e4ecuti)es complained of Motorola*s %ad quality' Bill +mith e)entually formulated the methodology in !"&H' Qualit Quality y plays plays an import important ant role role in the succes success s and failur failure e of an organ organi(a i(atio tion' n' ?eglec ?eglectin ting g an import important ant aspect aspect like like qualit quality y, will will not let you you sur)i) sur)i)e e in the long long run' run' Six Sigma en(ure( en(ure(
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(u"eri!r 0ua#it$ ! "r!)u't( $ rem!+ing t-e )ee't( in t-e "r!'e((e( an) ($(tem( ' +i4 sigma is a process which helps in impro)ing the o)erall processes and systems %y identifying and e)entu e)entuall ally y remo) remo)ing ing the hurdle hurdles s which which might might sto stop p the organi organi(at (ation ion to reach reach the le)els le)els of perfection' 5ccording to sigma, any sort of challenge which comes across in an organi(ation*s processes is considered to %e a defect and needs to %e eliminated'
0M5IC
0M50D
0M5IC focuses on impro)ing e4isting %usiness practices' 0M50D, on the other hand focuses on creating new strategies and policies' 0M5IC has i)e hases D 6 Deine t-e Pr!#em' Pr!#em' In the first phase, )arious pro%lems which need to %e addressed to are clearly defined' eed%acks are taken from customers as to what they feel a%out a particular product or ser)ice' eed%acks are carefully monitored to understand pro%lem areas and their root causes' M 6 Mea(ure an) in) !ut t-e *e$ "!int( ! t-e 'urrent "r!'e(( '
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“Gai(en” refers to a 8apanese word which means “impro)ement” or “change for the %etter”' 8ai/en i( )eine) a( a '!ntinu!u( e!rt $ ea'- an) e+er$ em"#!$ee 4r!m t-e EO t! ie#) (ta5 t! en(ure im"r!+ement ! a## "r!'e((e( an) ($(tem( ! a "arti'u#ar !rgani/ati!n' !rgani/ati!n' Aork for a 8apanese company and you would soon reali(e how much importance they gi)e to the process of Gai(en' The process of Gai(en helps 8apanese companies to outshine all other competitors %y adhering to certain set policies and rules to eliminate defects and ensure long term superior quality and e)entually customer satisfaction' satisfaction' Gai(en works on the following %asic principle' “Change “Change is for good ”' ”' 8ai/en mean( 1'!ntinu!u( im"r!+ement ! "r!'e((e( an) un'ti!n( ! an !rgani/ati!n t-r!ug- '-ange2' '-ange2 ' In a layman*s language, Gai(en %rings continuous small impro)ements in the o)erall processes and e)entually aims towards organi(ation*s success' 8apanese feel that many small small continuou continuous s changes changes in the systems and policies policies %ring effecti)e effecti)e results than few ma3or changes' 8ai/en "r!'e(( aim( at '!ntinu!u( im"r!+ement ! "r!'e((e( n!t !n#$ in manua'turing (e't!r ut a## !t-er )e"artment( a( %e##' %e## ' Implementing Gai(en tools is not the responsi%ility of a single indi)idual %ut in)ol)es e)ery mem%er who is directly associated with the organi(ation' :)ery indi)idual, irrespecti)e of his9her designation or le)el in the hierarchy needs to contri%ute %y incorporating small impro)ements and changes in the system'
ollowing are the main elements of +i4 +igma6
Teamwork
ersonal 0iscipline
Impro)ed Morale
Quality Circles
+uggestions for Impro)ement
i)e + of Gai(en “i)e +” of Gai(en is a systematic approach which leads to foolproof systems, standard policies, rules and regulations to gi)e rise to a healthy work culture at the organi(ation' ou would hardly find an indi)idual representing a 8apanese company unhappy or dissatisfied' 8apanese employees ne)er speak ill a%out their organi(ation' es, the process of Gai(en plays an important role in empl employ oyee ee sati satisf sfac acti tion on and and cust custom omer er sati satisf sfac acti tion on thro throug ugh h smal smalll cont contin inuo uous us chan change ges s and and eliminating defects' Gai(en tools gi)e rise to a well organi(ed workplace which results in %etter produc producti) ti)ity ity and yield yield %etter %etter result results' s' It also also leads leads to employ employees ees who who strong strongly ly feel feel attach attached ed towards the organi(ation' /et us understand the fi)e + in 0etail6 !' SEIRI 6 6 +:I7I stands for +ort
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needed at the moment' Items which are critical and most important should %e kept at a safe place' @' SEITION 6 +eition 6 +eition means to
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7emem%er, a manager is always a strong source of inspiration for other employees' ou need to pract practice ice total total qualit quality y manage managemen mentt yourse yourself lf %efore %efore e4pect e4pecting ing others others to %elie) %elie)e e in the same' same' Customer feed%acks should %e carefully monitored and taken into consideration consideration while formulating company* company*s s ma3or strategies' strategies' ro)ide frequent frequent reports reports to staff staff mem%ers mem%ers highlighti highlighting ng scope of impro)ement' 7ole of Customers in Total Quality Management Total Total Quality management refers to a continuous effort of management along with the employees of a particular organi(ation to impro)e the quality of products and ser)ices' Businesses need to emphasi(e on quality of their products rather than quantity to sur)i)e the fierce competition' 7emem%er in today*s scenario, there is no dearth of competitors in the market' Ahy would a customer return to your organi(ation if you do not deli)er what you had promised him initially ou can fool someone once %ut not twice' Quality is an important parameter for e)ery %usiness and should not %e ignored at any cost' Total Quality management works on a )ery simple principle6 The responsi%ility of deli)ering quality products and ser)ices to customers lies on the shoulders of e)ery single indi)idual who is e)en remotely associated with the organi(ation' It is not only the management %ut also employees irrespecti)e of their designation, suppliers, clients, customers who need to come up with impro)ement ideas to make foolproof systems and processes to deli)er quality products which meet and e4ceed the e4pectations of end- users' u(t!mer( "#a$ an im"!rtant r!#e in t!ta# 0ua#it$ management' management' Before we proceed further, let me ask you a )ery simple question' Ahat is the %asic difference %etween a successful and an unsuccessful %usiness 5 %usiness is successful only when its products and ser)ices ha)e enough %uyers in the market' es there are se)eral other parameters also %ut customers play a crucial role in deciding the success and failure of an organi(ation' Business marketers need to focus on their end-users and what e4actly they e4pect from their organi(ation' u(t!mer ee)a'*( (-!u#) e regu#ar#$ an) 'areu##$ m!nit!re) e!re !rmu#ating an$ ma9!r u(ine(( (trateg$ ' Eow can you ignore ignore your your custo customer mers s who pay for your your produc products ts which which e)ent e)entua ually lly %ring %ring re)enu re)enues es to your your organi(ation and yield higher profits Fnderstand the needs and demands of the customers T!ta# 0ua#it$ management en(ure( t-at em"#!$ee( un)er(tan) t-eir target 'u(t!mer( %e## %efore %efore makin making g any any change changes s in the proces processes ses and system systems s to deli)e deli)err superi superior or qualit quality y prod produc ucts ts for for %ett %etter er cust custom omer er sati satisf sfac acti tion on'' Infa Infact ct,, orga organi ni(a (ati tion ons s intr introd oduc uce e tota totall qual qualit ity y managemen managementt or any other quality quality managemen managementt process process to increase increase their customer customer %ase and le)els of customer satisfaction' Total Total Quality management increases an organi(ation*s data%ase of loyal customers who would not go anywhere, no matter what' Belie)e me, without customers a %usiness can*t e)en e4ist' Quality of a product is not defined only in terms of its dura%ility, packaging, relia%ility, timely deli)ery and so on %ut also a customer*s o)erall e4perience with the organi(ation' 7emem%er customer dissatisfaction leads to loss of %usiness' In ser)ice industry, employees need to interact with the customers sensi%ly and with utmost care and professionalism to e4pect happy and loyal customers' 0esign )arious feed%ack forms for the customers for them to share what they feel a%out your products and ser)ices' The feed%acks may %e in fa)our of your organi(ation, may not %e in fa)our of your %usiness' ?egati)e comments or feed%acks of the customers should not %e ignored' 5s a part of total quality management, employees should sit on a common platform, %rainstorm ideas and come to concrete solutions which would impro)e the systems and processes to e)entually deli)ery what the customer e4pects' ?o amount of total quality management would help if you ignore your customers' In case of physical products, customers are satisfied when the products are6
10
0ura%le
7elia%le
:asy to Fse
5dapta%le
5ppropriate
In case of ser)ice industry customers are satisfied only when6
:mployees are friendly and polite
:mployees are honest and do not make fake promises
:mployees are easy approacha%le
:mployees are willing to listen and address customer grie)ances
Comparison of +i4 +igma and Total Quality Management Both +i4 +igma and Total Quality Management are effecti)e tools for quality management %ut a thin line of difference does e4ist %etween them' 5lthough the methodologies and procedures in)ol)ed in %oth the two appear quite similar %ut there are certain ma3or differences' Six6Sigma i( a re#ati+e#$ ne%er '!n'e"t t-an T!ta# Qua#it$ Management ut n!t exa't#$ it( re"#a'ement' re"#a'ement' The %asic difference %etween Total Quality Management and +i4 +igma is that TQM deli)ers superior quality manufactured goods whereas si4 sigma on the other hand results in %etter results' Total Quality management refers to continuous effort %y employees to ensure high quality products' The process of +i4 +igma incorporates many small changes in the systems to ensure effecti)e results and %etter customer satisfaction' Total Quality Management in)ol)es designing and de)eloping new systems and processes and ensures effecti)e coordination among )arious departments' ?ew rocesses are de)eloped %ased on )arious customer feed%acks and researches' T-e main !'u( ! T!ta# 0ua#it$ management i( t! maintain exi(ting 0ua#it$ (tan)ar)( %-er %-erea ea( ( Six Six Sigm Sigma a "rim "rimar ari#$ i#$ !'u !'u(e (e( ( !n ma*i ma*ing ng (ma# (ma### ne'e ne'e(( ((ar ar$ $ '-an '-ange ge( ( in t-e t-e "r!'e((e( an) ($(tem( t! en(ure -ig- 0ua#it$' 0ua#it$ ' The process of Total Total quality management does reach to a saturation le)el after a certain period of time' 5fter reaching the saturation stage, no further impro)ements in quality can %e made' +i4 +igma on the other hand seldom reaches the saturation stage %y initiating a ne4t le)el quality process' The proces process s of Total qualit quality y manage managemen mentt in)ol) in)ol)es es impro) impro)eme ement nt in e4isti e4isting ng polici policies es and procedures to ensure high quality' Six6Sigma !'u(e( !n im"r!+ing 0ua#it$ $ minimi/ing an) an) e+en e+entu tua## a##$ $ e#im e#imin inat atin ing g )ee )ee't 't( ( r!m r!m t-e t-e ($(t ($(tem em'' The The proc proces ess s of tota totall Qual Qualit ity y managemen managementt ensures ensures that e)ery e)ery single single mem%er mem%er ass associat ociated ed with the organi(at organi(ation ion is working working towards the impro)ement of e4isting processes, systems, ser)ices and work culture for long term quality products9ser)ices' +i4 +igma, on the other hand focuses on first identifying and e)entually remo)ing )arious defects and o%stacles which might come in the way of organi(ation*s success' success' In a layman*s language total quality management emphasi(es on impro)ing the e4isting policies and making making necessary necessary changes changes in the systems to ensure ensure superior superior quality products and ser)ices ser)ices''
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Belts” or “Black Belts” depending on their le)el of proficiency' +i4-+igma requires participation of only certified professionals whereas total quality management can %e referred to a part time acti)ity which does not require any special training' +i4-+igma can %e implemented %y dedicated and well trained professionals' Six6Sigma i( *n!%n t! )e#i+er etter an) ee'ti+e re(u#t( a( '!m"are) t! t!ta# 0ua#it$ management' management' The process of +i4 +igma is %ased on customer feed%acks and is more accurate and result oriented' Customer feed%acks play an important role in +i4 +igma' :4perts predict that si4 sigma will outshine total quality management in due course of time' +imilarit +imilarities ies and 0ifference 0ifferences s in Implementa Implementation tion of Quality Quality ramewo rameworks rks in Manufactu Manufacturing ring and +er)ice +ector Introduction 5 production defect in a company like .: 1.eneral :lectric2 might result in that specific product or the part %eing remo)ed from the assem%ly line and not sent out as finished product' Eowe)er, in the ser)ice sector, a process error might pro)e to %e costly as in the case of the 8MC or Citigroup 1%anking or financial ser)ices company that ha)e adopted +i4 +igma2 where the “le)erage” for each transaction is more and hence an error in a process can %e magnified se)eral times' 5 literature re)iew of the differences %etween adopting +i4 +igma for manufacturing and ser)ices yields the finding that there are four things to consider %efore ser)ice organi(ations adopt +i4 +igma as a way of life in their organi(ations' Gey +imilarities and 0ifferences %etween Manufacturing and +er)ice +ectors !' irst, irst, managers managers in the ser)ice sector sector must reali(e reali(e that unlike unlike in the manufactur manufacturing ing sector sector, there are a num%er of processes in the %anking and financial ser)ices companies 1ser)ice sector2 that are of )arying comple4ity and different le)els of customi(ation' or instance, an assem%ly line in a manufacturing industry is an e4ample of a highly standard process that can adopt a quality framework' Eowe)er, in the %anking sector, there are some processes that are highly comple4 and do not not lend lend them themse sel) l)es es to stan standa dard rdi( i(at atio ion n in the the same same way way that that a proc proces ess s in the the manufacturing sector does' Eence, the challenge for the ser)ice sector is to consider which process can %e mass-customi(ed meaning that the process is the same for all customers and in all conditions and then apply the quality frameworks to achie)e process e4cellence' An example of a mass customized process in the banking industry or for that matter any service sector company would be the payroll and the credit card accounting processes that lend themselves themselves to standard standardizati ization on'' +imilarly, in a fast food chain, the processes lend them themse sel) l)es es to a high high degr degree ee of stan standa dard rdi( i(at atio ion n and and henc hence e thes these e can can sele select cted ed for for application of the quality frameworks' frameworks' @' The second second point to %e consider considered ed is one of the cardinal cardinal principles principles of quality quality control control66 T! )eine %-at i( a )ee't an) -!% i( !ne g!ing t! mea(ure it In manufacturing industries it is often easier to spot defects as )isual inspection or e)en ad)anced quality contro controll proces processes ses can often often spot spot defect defects s as they relate relate to the quality quality of the product product manufactured' Eowe)er, in ser)ice companies, defining a defect is a challenge as the conflict %etween quality as demanded %y the customer and the quality of the ser)ice as offered %y the ser)ice pro)ider are two different things'
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“feed%ack loop” that feeds into the system pre)alent in the ser)ice industry and self corrects 1in the ideal case2 or is prodded to do so' ;' The third point relates to the way in which quality quality slippages are analy(ed analy(ed within the ser)ice sector sector compan company y' Contin Continuin uing g the same same point point made made in the prece precedin ding g parag paragra raph, ph, it is important to find out the “root cause” %ehind the defect or the deficiency in ser)ice and then act accordingly' It might %e the case that comple4 processes with numerous rules go)erning each step of the process 1that is the hallmark of %anking and financial ser)ice companies2 might need to %e analy(ed minutely for possi%le root causes for the defect' /eadership ractices The leadership leadership and managemen managementt practices practices that ha)e %een found to ha)e contri%uted contri%uted to the successful implementation of the quality frameworks would %e analy(ed in this section' 5s the case study pertaining to the 0ow Chemical implementation of +i4 +igma framework shows, there needs to %e sustained focus on the goals and o%3ecti)es that ha)e %een set for the +i4 +igma implementation' The analysis analysis of the Case Case +tudy +tudy of 0ow Chemical Chemical shows shows how the leader leadershi ship p implem implement ented ed a “+taircase of Change /eadership” model that has the ten attri%utes progressing from each step starting with the enunciation of “)ision” and culminating in the success step of the staircase that represents the pinnacle of achie)ement for 0ow' Case +tudy of 0ow Chemical The 0ow +taircase of Change /eadership consists of the following steps6 Dision, Dalues, 5ttitude, /anguage, Beha)iours, Best ractices, 5rticulated +trategy, Implementation, Culture Change and +uccess' The emphasis at each step of the model is to ha)e a coherent strategy to implement +i4 +igma and ensure that it is dri)en from the top as well as em%raced %y the %ottom' In short a com%ination of top dri)en and %ottom-up strategies that enunciate a clear )ision to %e the leader in achie)ing +i4 +igma compliance is the focus of the model as followed %y 0ow Chemicals' The key points points a%out this model model are the emphas emphasis is on “termi “terminol nology ogy”” that that is unique unique to the framewo framework rk and its implement implementation ation 1the language language step2, the necessar necessary y “%eha)iou “%eha)iours” rs” that are needed to %e followed %y each employee and which were communicated as part of “road shows” and the adoption of %est practices from across the industry and customi(ing them to the specific case of 0ow Chemicals' Case +tudy of 0oosan Company The other case study that is %eing analy(ed for /eadership practices is the one that has %een followed %y the 0oosan Company in +outh Gorea' Fnder the si4-sigma framework adopted %y 0oosan, there are fi)e elements in the model that are aligned with each other in pursuit of the o%3ecti)e of quality e4cellence' The fi)e elements that 0oosan incorporates in its model are !' top-le top-le)e )ell managem management ent commit commitmen ment, t, @' stake stakehol holder der in)ol) in)ol)eme ement, nt, ;' trai traini ning ng sche scheme mes, s, ' pro3ec pro3ectt team team acti)i acti)itie ties, s, and and #' meas measur urem emen entt sys syste tem m 5n analy analysis sis of the elements elements re)eal re)eals s the fact fact that that each each of them them canno cannott functi function on withou withoutt the cooperation and colla%oration of the other and a coordinated and synchronous approach towards pursuing the +i4 +igma framework is what gi)es 0oosan the edge o)er its competitors'
13
:lements of Total Quality Management Quality is an essential parameter which helps organi(ations outshine their competitors and sur)i)e the fierce competition' The success of total quality management depends on following eight elements which are further classified into following four groups'
oundation
Building Bricks
Binding Mortar
7oof
oundation oundation further includes :thics, Integrity and Trust The entire process of Total Quality Management is %uilt on a strong foundation of :thics, Integrity and and Trust' ust' Total Qualit Quality y Manage Managemen mentt in)ol) in)ol)es es e)ery e)ery single single employ employee ee irresp irrespect ecti)e i)e of his designation and le)el in the hierarchy' Et-i'(3 :thics Et-i'(3 :thics is an indi)idual*s understanding of what is good and %ad at the workplace' 5 thin line of difference does e4ist %etween good and %ad, which is for you to decide' :thics teach an indi)idual to follow code of conduct of organi(ation and adhere to rules and regulations' Integrit$3 Integrity Integrit$3 Integrity refers to honesty, honesty, )alues and an indi)idual*s sincerity at workplace' ou need to respect your organi(ation*s policies' 5)oid spreading unnecessary rumours a%out your fellow workers' Total Quality Management does not work in an en)ironment where employees critici(e and %acksta% each other' Tru(t3 Trust Tru(t3 Trust is one of the most important factors necessary for implementation of total quality management' :mployees need to trust each other to ensure participation of each and e)ery indi)idual' Trust impro)es relationship among employees and e)entually helps in %etter decision making which further helps in implementing total quality management successfully' Bricks Bricks are placed on a strong foundation to reach the roof of recognition' The foundation needs to %e strong enough to hold the %ricks and support the roof' Training3 :mployees Training3 :mployees need to %e trained on Total Quality Management' Managers need to make their fellow workers aware of the %enefits of total quality management and how would it make a difference in their product quality and e)entually yield profits for their organi(ation' :mployees need to %e trained on interpersonal skills, the a%ility to work as a team mem%er, technical knowhow, decision making skills, pro%lem sol)ing skills and so on' Training ena%les employees to implement TQM effecti)ely within their departments and also make them indispensa%le resources' Team%!r*3 Team Team%!r*3 Team work is a crucial element of total quality management' 7ather than working indi)idually, employees need to work in teams' Ahen indi)iduals work in unison, they are in a position to %rainstorm ideas and come up with )arious solutions which would impro)e e4isting processes and systems' Team mem%ers ought to help each other to find a solution and put into place' Lea)er(-i"3 /eadership Lea)er(-i"3 /eadership pro)ides a direction to the entire process of Total Quality Management' Total Quality Management needs to ha)e a super)isor who acts as a strong source of inspiration for other mem%ers and can assist them in decision making' 5 leader himself needs to %elie)e in the entire process of TQM for others to %elie)e in the same' roper downloads, %riefs a%out TQM must %e gi)en from to time to employees to help them in its successful implementation' implementation'
14
Binding Mortar Binding Mortar %inds all the elements together' !mmuni'at !mmuni'ati!n i!n 6 Comm Commun unic icat atio ion n %ind %inds s empl employ oyee ees s and and e4tr e4trac acts ts the the %est %est out out of them them'' Information needs to %e passed on from the sender to the recipient in its desired form' +mall misunderstandings in the %eginning lead to ma3or pro%lems later on' :mployees need to interact with each other to come up with pro%lems e4isting in the system and find their solutions as well' Three types of Communication takes place %etween employees6 D!%n%ar) !mmuni'ati!n3 low low of inform informati ation on takes takes place place from from the manage managemen mentt to the employees U"%ar) !mmuni'ati!n3 low !mmuni'ati!n3 low of informati information on takes place from the employees employees to the top le)el management Si)e%a$( !mmuni'ati!n3 Communication !mmuni'ati!n3 Communication also takes place %etween )arious departments' 7oof Re'!gniti!n3 7ecognition Re'!gniti!n3 7ecognition is the final element of Total Quality Management' 7ecognition is the most important factor which acts as a catalyst and dri)es employees to work hard as a team and deli)er their le)er %est' :)ery indi)idual is hungry for appreciation and recognition' :mployees who come up with impro)ement ideas and perform e4ceptionally well must %e appreciated in front of all' They should %e suita%ly rewarded to e4pect a %rilliant performance from them e)en the ne4t time' Generi' Strateg$ M!)e# !r Im"#ementing TQM S$(tem( !' Top managem management ent learns learns a%out a%out and decides decides to commit to TQM' TQM' TQM is identified identified as one of the organi(ation*s organi(ation*s strategies' @' The The orga organi ni(a (ati tion on asse assess sses es management systems'
curr curren entt
cult cultur ure, e,
cust custom omer er
sati satisf sfac acti tion on,,
and and
qual qualit ity y
;' Top managem management ent identifi identifies es core core )alue )alues s and principl principles es to %e used, used, and communi communica cates tes them' ' 5 TQM master master plan plan is de)elo de)eloped ped on the the %asis %asis of steps steps !, @, and and ;' #' The organi(a organi(atio tion n identi identifie fies s and prioriti prioriti(es (es customer customer demands demands and aligns aligns produc products ts and ser)ices to meet those demands' H' Mana Manage geme ment nt maps maps the the crit critic ical al proc proces esse ses s thro throug ugh h whic which h the the orga organi ni(a (ati tion on meet meets s its its customers* needs' =' Managemen Managementt o)ersees o)ersees the formation formation of teams for process process impro)em impro)ement ent efforts' efforts' &' The momentum momentum of of the TQM effort effort is managed managed %y %y the steering steering committe committee' e' "' Mana Manage gers rs cont contri ri%u %ute te indi indi)i )idu dual ally ly to the the effo effort rt thro throug ugh h hosh hoshin in plan planni ning ng,, trai traini ning ng,, coaching, or other methods' !$' 0aily process management management and standardi(ation take place' place' !!' rogress is e)aluated e)aluated and the plan is re)ised as needed' !@' !@' Cons Consta tant nt empl emplo oyee awarenes eness s and feed feed%a %ac ck reward9recognition reward9recognition process is esta%lished'
on
stat status us
are
pro) ro)ided ided
and and
a
Exam"#e( ! T!ta# Qua#it$ Management S$(tem Strategie( Strateg$ :3 T-e TQM e#ement a""r!a'The TQM element approach takes key %usiness processes and9or organi(ational units and uses the tools too ls of TQM to fos foster ter impro)e impro)emen ments' ts' This method method was widely widely used in the early !"&$s as companies tried to implement parts of TQM as they learned them'
15
:4amples of this approach include quality circles, statistical process control, Taguchi Taguchi methods, and quality function deployment' Strateg$ ;3 T-e guru a""r!a'The guru approach uses the teachings and writings of one or more of the leading quality thinkers as a guide guide agains againstt which which to determ determine ine where where the organi organi(at (ation ion has has defici deficienc encies ies'' Then, Then, the organi(ation makes appropriate changes to remedy those deficiencies' or e4ample, managers might study 0eming*s ! points or points or attend the Cros%y College' They would then work on implementing the t he approach learned' Strateg$ <3 T-e !rgani/ati!n m!)e# a""r!a'In this approach, indi)iduals or teams )isit organi(ations that ha)e taken a leadership role in TQM and determine their processes and reasons for success' They then integrate these ideas with their own ideas to de)elop an organi(ational model adapted for their specific organi(ation' This method was used widely in the late !"&$s and is e4emplified %y the initial recipients of the Malcolm Baldrige ?ational Quality Q uality 5ward' 5ward' Strateg$ =3 T-e >a"ane(e t!ta# 0ua#it$ a""r!a'winning companies and use this e4perience to de)elop a long-range master plan for in-house use' This approach was used %y lorida ower and /ightKamong othersKto implement TQM and to compete for and win the 0eming ri(e' Strateg$ ?3 T-e a%ar) 'riteria a""r!a'Ahen using this model, an organi(ation uses the criteria of a quality award, for e4ample, the 0eming ri(e, the :uropean Quality 5ward, or the Malcolm Baldrige ?ational Quality 5ward, 5ward , to identify areas for impro)ement' Fnder this approach, TQM implementation focuses on meeting specific award criteria' 5lthough some argue that this is not an appropriate use of award criteria, some organi(ations do use this approach and it can result in impro)ement'
TQM Six Basic Concepts Concepts 1. Leadersip 2. C!sto"er Satis#action 3. $"p%o&ee 'n(o%(e"ent 4. Contin!o!s )rocess '"pro(e"ent 5. S!pp%ier )artnersip 6. )er#or"ance Meas!res
Characteristics of Successful Leaders 1. *i(e attention to externa% and interna% c!sto"ers 2. $"po+er, not contro% s!-ordinates. )ro(ide reso!rces, trainin, and +or/ en(iron"ent to e%p te" do teir o-s 3. $"pasie i"pro(e"ent rater tan "aintenance 16
4. $"pasie pre(ention 5. $nco!rae co%%a-oration rater tan co"petition 6. Train and coac, not direct and s!per(ise 7. Learn #ro" pro-%e"s opport!nit& #or i"pro(e"ent 8. Contin!a%%& tr& to i"pro(e co""!nications co""!nications 9. Contin!a%%& de"onstrate co""it"ent to !a%it& 10. Coose s!pp%iers on te -asis o# !a%it&, not price 11. $sta-%is oraniationa% s&ste"s tat s!pports !a%it& eorts
Issues Issues for custo customer mer satisf satisfact action ion Check Checklis listt for both both intern internal al and ex exte terna rnall customers 1. o are "& c!sto"ers 2. at do te& need 3. at are teir "eas!res and expectations 4. oes "& prod!ctser(ice prod!ctser(ice exceed teir expectations 5. o+ do ' satis#& teir needs 6. at correcti(e action is necessar& C!sto"er :eed-ac/ ; isco(er c!sto"er dissatis#action dissatis#action ; isco(er priorities o# !a%it&, price, de%i(er& ; Co"pare per#or"ance +it co"petitors ; 'denti#& c!sto"er
Customer Feedback Tools/Method Tools/Method ; arrant& cardsQ!estionnaire ; Te%eponeMai% S!r(e&s ; :oc!s *ro!ps ; C!sto"er Co"p%aints ; C!sto"er Satis#action 'ndex
Employee Involvement ; )eop%e "ost i"portant reso!rceasset ; Q!a%it& co"es #ro" peop%e ; )roect tea"s Q!a%it& Contro% Circ%es =QCC>, Q'T ; $d!cation and trainin %i#e %on, contin!o!s -ot /no+%ede and s/i%%s ; S!estion sce"es? @aien, 5S tea"s ; Moti(ationa% prora"s, incenti(e sce"es ; Cond!ci(e +or/ c!%t!re, rit attit!de, co""it"ent
Continuous rocess Improvement ; Aie+ a%% +or/ as process prod!ction and -!siness 17
; )rocess p!rcasin, desin, in(oicin, etc. ; 'np!ts )C$SS o!tp!ts ; )rocess i"pro(e"ent increased c!sto"er satis#action ; '"pro '"pro(e" (e"ent ent 5 +a&s? +a&s? ed!ce ed!ce reso! reso!rc rces, es, ed!ce ed!ce erro errors rs,, Meet Meet expec expectat tation ions s o# do+nstrea" do+nstrea" c!sto"ers, Ma/e process sa#er, "a/e process "ore satis#&in to te person doin
roblem ! Solvin" Method 1. 'denti#& te opport!nit& =#or i"pro(e"ent> 2. Dna%&e te c!rrent process 3. e(e%op te opti"a% so%!tion=s> 4. '"p%e"ent canes 5. St!d& te res!%ts 6. Standardie te so%!tion 7. )%an #or te #!t!re
18
