Total Quality Management
Content
TOTAL QUALITY
MANAGEMENT
By Dr. P.N.Mukherjee
MANAGEMENT
DEFINITION: Management is the process of designing and maintaining an environment conducive for performance for a group of people working together for attainment of a common objective in time
‘Operation Management’ is the effective and efficient management of a Process. A ‘Process’ has an input and value added output and the objective of a process is to add value by conversion from input to output .
MANAGEMENT
FINANCE TECHNOLOGY
RAW MATERIAL VALUE ADDITION BY CONVERSION
PRODUCTS & SERVICES
MARKET
MEN
MACHINE
ENVIRONMENT
MANUFACTURING INDUSTRY
OUTPUT INPUT RAW MATERIAL VALUE ADITION BY CONVERSION VALUE ADDED PRODUCT & SERVICES.
SERVICE INDUSTRY
OUTPUT INPUT CUSTOMER VALUE ADITION BY CONVERSION VALUE ADDED CUSTOMER
Goods Vs Services
Goods Tangible Can be inventoried
No interaction between customer and process
Services Intangible Cannot be inventoried Direct interaction between customer and process
Most „products‟ are a „bundle‟ of Goods & Services
Input Transformation Output Relationships for typical systems
System Inputs (Primary)
Travelers
Resources
Transformation (Primary)
Move to destination
Typical Desired Output
On-time, Safe & comfortable delivery to destination
Airline
Airplanes, Crew, Ticketing scheduling systems Doctors, Nurses, Technicians, Medicines, Equipments etc. Labs, Classrooms
Hospital
Patients
Physiological Health Satisfied, care Healthy individual Educated individuals Satisfied customers
University HSC - Pass Teachers, Books, Imparting
Outs Knowledge & Skills
Restauran t
Hungry Customers
Food, Chef, Staff, Good Food, WellEnvironment served. Agreeable environment
QUALITY
FITNESS FOR USE FITNESS FOR PURPOSE CONFORMANCE TO REQUIREMENTS TOTALITY OF FEATURES AND CHARECTERISTICS SATISFY STATED AND IMPLIED NEEDS CUSTOMER SATISFACTION
QUALITY IS USER AS WELL AS PRODUCT SPECIFIC . THE SAME PRODUCT IS OF GOOD QUALITY TO CERTAIN USER SEGMENT CAN BE OF BAD QUALITY TO ANOTHER USER SEGMENT.
OPERATION MANAGEMENT is the ‘effective and efficient management of
a Process’.
TQM IS ORIENTATION TOWARDS PROCESS & COMPANY WIDE PERFORMANCE EXCELLENCE IN ALL FUNCTIONS INVOLVING EVERYBODY. OBJECTIVES OF A WORLD CLASS ORGANIZATION
THREE CRITICAL FACTORS FOR SURVIVAL & PERFORMANCE EXCELLENCE OF AN INDUSTRY:
A. COMPETITIVE ADVANTAGE. B. CUSTOMER SATISFACTION. C. INCREASE RETURN ON INVESTMENT (ROI).
COMPETITIVE ADVANTAGES
COMPETITIVE ADVANTAGES
CUSTOMER Needs seeking benefits at acceptable prices
Va lu e.
COMPETITOR. Assets & Utilization
COMPANY. Assets & utilization.
e lu Va
Cost diff.
WORLD CLASS PERFORMANCE & LEADERSHIP
RESULTS DELIGHTED CUSTOMERS EMPOWERED EMPLOYEES INCREASED REVENUES REDUCTION IN COPQ
QUALITY IMPROVEMENT
TOTAL QUALITY MANAGEMENT PROCESS
QUALITY CONTROL QUALITY PLANNING QUALITY MANAGEMENT SYSTEM—ISO 9000 SUPPLY CHAIN MANAGMENT TOTAL ORGANISATION INVOLVEMENT CONTINUOUS IMPROVEMENT STRATEGIC QUALITY PLANNING
INFRASTRUCTURE
FOUNDATION
CUSTOMER FOCUS
CUSTOMER SATISFACTION :
Customer Satisfaction is attained if the customer‟s stated , implied and latent needs are fulfilled. The evidence of customer‟s satisfaction is his continued patronage of the same brand & product, his feedback , reduction in customer complaint & increase in sales and market share. Maximization of Services decides the market leadership as product “quality” becomes a mandatory requirement.
The Customer Satisfaction is attained by providing the Goods & Services of Right Quality & Right Quantity at the Right Time, Right Place and Right Price.
CUSTOMER SATISFACTION : VALUE FOR MONEY.
Unless the Product or Service we offer can be distinguished in some way from the competitors, there is a likely hood that the Market place will view it as a “Commodity” and so the sale will tend to go to the cheapest supplier. Hence the importance of seeking to add additional values to our offering to mark it out from the competition. Adding value through differentiation of the Products or Services creates value segments which is a powerful means of achieving a defensible advantage in the market. MAXIMIZATION OF RETURN ON INVESTMENT A. INCREASE PROFIT MARGIN BY a. Price Increase. b. Reduce Cost of Production. B. INCREASE THROUGHPUT OR WORKING CAPITAL TURNOVER .
ROI = Net Income / Investment. = (Net Income/Revenue) X (Revenue/Investment) = Return on Revenue X Investment Turnover.
BALANCE SCORE CARD.
FINANCIAL PERSPECTIVE 1. ROI. 2. CASH FLOW. 3. PROFIT. CUSTOMER PERSPECTION
1. CUSTOMER SATISFACTION. 2.COMPETITIVE ADVANTAGE. 3.MARKET SHARE. 4. BRAND IMAGE.
INTERNAL BUSINESS PERSPECTIVE 1. EMPLOYEE SATISFACTION. 2. EMPLOYEE TURNOVER. 3. INVENTORY TURNOVER. 4. SAFETY RECORD. 5. PROJECT PERFORMANCE.
INNOVATION & LEARNING PERSPECTIVE
1.NO. OF IMPROVEMENTS P.A 2.NO. OF NEW PRODUCTS P.A. 3.NO. OF NEW MARKET SEGEM -ENT ADDED P.A. 4.NO. OF NEW CUSTOMERS P.A
NATURE OF MANAGEMENT
As managers ,people carry out the managerial functions following P-D-CA cycle. Management applies to any kind of organisation. It applies to managers at all organisational levels to both manufacturing & service Industries. The aim of all managers is the same, to create a surplus. Managing is concerned with productivity ,this implies effectiveness and efficiency.
DEFINATION OF PRODUCTIVITY
Successful companies create a surplus through productive operations. Productivity is defined as output input ratio within a time period with due consideration for quality.
Productivity = outputs (within a time period inputs quality considered)
Peter F Drucker one of the most prolific writers in management observed, “ The
greatest opportunity is surely to be found in the knowledge work itself ,and especially in management.
Effectiveness is the nearness to the achievement of the end objective. Efficiency is the maximization of output or value addition with the least amount of resources. Managers can not know whether they are productive unless they first know their goals and those of the organization
Current Managerial Function Deming‟s (Shewarts‟s) P-D-C-A Cycle
Act
Plan
Co nu nt i ou s
Check
Do
p Im ro
m ve
en
t
Quality Management System (ISO 9000)
PLANNING
DEFINITION: Planning is the decision making process of choosing the best alternative consuming least amount of input resources and giving the maximum output for attaining the desired objective in time.
DO – Execute or Implement the Plan as per schedule with effectiveness and efficiency. CHECK – is to ascertain the „Deviation‟ between what was planned what has happened and what is the „Root Cause‟ for the same. ACT – After analyzing the root cause take the Corrective and Preventive actions so that a mistake once occurred leading top a deviation is never ever repeated again. Since it is a cycle, incorporate these corrective & preventive actions in the next plan so that the organization is in a path of „Continuous Improvement‟ by continual elimination of mistakes or solving the problems.
To ensure that once an improvement has been done, it is permanently part of the system & it never retracts, a ‘Quality Management System’ – ISO 9001:2000 is implemented.
SKILLS & MANAGEMENT LEVELS
Top Management
Concept ual & Design Human Skill Skill Technical Skills
Middle Management
Supervisors
DEPARTMENTAL FUNCTION
• VERTICAL CHIMNEYS
Purchase Dept.Á
Production „Dept. „‟B
Finance „Dept. Ç
Marketing Dept. D
CONVENSIONAL ORGANISATION ( - 1+ 1 = 0 )
HORIZONTAL QUALITY THINKING
• WORLD CLASS ORGANISATION(1&1=11)
HR
Production
Finance
Marketing
Customer Satisfaction
THE VALUE CHAIN CONCEPT
New Product Development
Marketing Materials ProductionDistribution Service & Sales
Finance, Technology, IT, Human resource & Management
DEPARTMENTAL FUNCTIONS
Concept of Internal Customer
Maintenance Dept. Machines of right quality, Quantity, cost & at right time And place Finance Dept. Finance of right Quality, quantity, Cost ,at right time And place HR Department Human Resource of Right quality, quantity At right cost ,time & place
Materials Department - R.M. of Right Quality, Quantity, Price at right Time and Place
Production Value addition by Conversion
Marketing Creation of Esteem Value
Customer
THE FUNDAMENTALS OF CUSTOMER SATISFACTION
UNDERSTAND & BELIEVE IN THE IMPORTANCE OF SATISFYING CUSTOMERS. TRUST YOUR CUSTOMERS. BUILD CUSTOMER RESPECT IN THE VALUE SYSTEM OF THE EMPLOYEES. ESTABLISH „LISTENING POSTS‟ FOR EMPLOYEES AT ALL LEVEL. LET YOUR CUSTOMERS INTERACT WITH YOUR EMPLOYEES. INCORPORATE CUSTOMER SATISFACTION OBJECTIVES IN THE „KRAs‟. EMPOWER EMPLOYEES TO DELIVER HIGH LEVEL OF CUSTOMER SATISFACTION.
TQM – TOTAL QUALITY MANAGEMENT
IS AN ORGANISED SCIENTIFIC APPROACH TOWARDS CONTINUOUS IMPROVEMENT OF QUALITY INVOLVING EVERYONE IN THE ORGANISATION COVERING EVERY FUNCTIONS AIMED TOWARDS TOTAL CUSTOMER SATISFACTION
THREE PILLARS OF TQM :
CUSTOMER SATISFACTION. CONTINUOUS IMPROVEMENT TOTAL EMPLOYEE INVOLVEMENT.
Competitive Benefits of TQM
Higher prices or Increased market share
Exhibit
3-4
Continual Quality Improvement
Improved competitive position
Market-Route Benefits
Increased revenue Increased profits
Increased defect-free output
Reduced cost of operations
Cost-Route Benefits
3-7
WORLD COMPETITION IN QUALITY
THE WEST (COMPANY X)
JA
N PA
YY AN P OM (C
)
1950
1960
1970
1980
1990
JOURNEY TO TOTAL QUALITY LONG ENDURING JOURNEY OF INDETERMINATE LENGTH.
IN THE BOTTOM-UP APPROACH FOCUS AT THE OPERATIONAL LEVEL. • Move the Ideas to each employees at their speed. • Do not force strategy but aim to change people‟s mindset. • Never under-estimate people power. • Develop ways of Horizontal Quality Thinking. • Challenges “Business-As-Usual” Attitudes
ATTAINMENT OF DESIRED QUALITY REQUIRED COMMITMENT AND PARTICIPATION OF ALL MEMBERS IN AN ORGANISATION WHEREAS RESPONSIBILITY OF QUALITY MANAGEMENT BELONGS TO THE TOP MANAGEMENT.
Eight Characteristics of A World Class Organisation
(Thomas Peters & Robert Watermann)
Were Action oriented. Were customer oriented (Learned about needs of their customer). Promoted managerial autonomy and empowerment. Achieved productivity by employee orientation.
Led by sound value of their leader (A role model). Focused on business they knew best (Core competence). Simple and lean organisation. Flexible orientation – Centralised as well as De-Centralised.
INSPECTION
POST PRODUCTION EXERCISES. GRADING, SALVAGE. CORRECTIONS.
QUALITY ASSURANCE
PROCESS COMPLIANCE IN MANUFACTURING. STATISTICAL PROCESS CONTROL. CORRECTIVE ACTIONS. ISO 9000: 1994.
TQC – TOTAL QUALITY CONTROL
EXTENSIVE USE OF QUALITY IMPROVEMENT TOOLS. COMPANY WIDE QUALITY ASSURANCE – CWQA. CORRECTIVE & PREVENTIVE ACTIONS. TOTAL QUALITY MANAGEMENT - TQM CONTINUAL IMPROVEMENT CUSTOMER ORIENTATION TEI-TOTAL EMPLOYEE INVOLVEMENT ATTAINMENT OF DESIRED QUALITY REQUIRED COMMITMENT AND PARTICIPATION OF ALL MEMBERS IN AN ORGANISATION WHEREAS RESPONSIBILITY OF QUALITY MANAGEMENT BELONGS TO THE TOP MANAGEMENT.
QUALITY POLICY
THE OVERALL QUALITY INTENSIONS AND DIRECTIONS OF AN ORGANISATION AS REGARDS “QUALITYÄS FORMALLY EXPRESSED BY THE TOP MANAGEMENT.
QUALITY MANAGEMENT
THE ASPECT OF OVERALL MANAGEMENT FUNCTION THAT DETERMINES AND IMPLEMENTS THE QUALITY POLICY.
QUALITY SYSTEM
THE ORGANISATIONAL STRUCTURE, RESPONSIBILITIES, PROCEDURES, PROCESSES AND RESOURCES FOR
IMPLEMENTATION OF THE QUALITY SYSTEM.
QUALITY CONTROL (Control over process)
The operational techniques and activities that are used to fulfill the requirements of quality aimed both at monitoring a Process and at eliminating causes for unsatisfactory performance.
QUALITY ASSURANCE.
ALL THOSE PLANNED AND SYSTAMATIC ACTIONS NECESSARY TO PROVIDE ADEQUATE COFIDENCE THAT A PRODUCT AND SERVICE WILL SATISFY GIVEN REQUIREMENT.
Relationship of Concepts
Quality Management Aspects(Policy)
Eight Building Blocks of OM/TQM:
Act always in line With Customer Needs
Develop an Internal Customer – Supplier Relationship
Satisfy All Parties at the Same time
Measure “value added”
Involve all participants In the enterprise
Do it Right the First Time
Focus on Prevention
Work under the “7 ZERO” Banner
LEAN MANAGEMENT SYSTEM : ELIMINATION OF WASTAGES / MUDAS. PROCESS IMPROVEMENTS BY ELIMINATION OF NON VALUE ADDED ACTIVIIES “SEVEN ZERO (mudas)”: ZERO DISDAIN FOR OTHERS. ZERO STOCK. ZERO DELAY ZERO PAPER. ZERO DOWNTIME. ZERO DEFECT. ZERO ACCIDENT. TWO MORE MUDAS : LOST OF OPPORTUNITY. INADEQUATE UTILIZATION OF ANY RESOURCES OR ANY RESOURCE LYING IDLE.
ACTIVITIES IN A PROCESS :
OPERATION. TRANSPORTATION. INSPECTION STORAGE DELAY
MAXIMIZE VALUE ADDING ACTIVITIES THAT IS „OPERATION’. MINIMIZE NON VALUE ADDED ACTIVITIES THAT IS „TRANSPORT’, ‘DELAY’, ‘INSPECTION’ AND ‘STORAGE’.
This is the way to improve the ‘Process Efficiency’. ELEVEN TQM STEPS to be an WORLD CLASS ORGANISATION TQM overview. Set MISSION. Identify CUSTOMERS. Identify Customer‟s Needs. Define CRITICAL PROCESS & MEASURES. Set Organizational VISION. Develop Strategic Plan (10-20 yrs) Develop Annual Plan for Breakthrough Revise Roles and Responsibilities Form Steering Committee to set change strategy. Annual Review
PRE-REQUISITES for SUCCESS for “TQM”
COMMITTMENT AT THE TOP ORGANISATION for QUALITY STRATEGIC DIRECTION CUSTOMER ORIENTATION NEED-BASED EDUCATION & TRAINING TOTAL INVOLVEMENT of EMPLOYEES SUPPORTIVE CULTURE
TEAMWORK PREVENTION BASED SYSTEMS RECOGNITION &REWARD SYSTEM
COST OF QUALITY
• THE QUALITY SYSTEM MUST INCLUDE METHODS AND PROCEDURES TO DETERMINE AND EVELUATE THE IMPACT THE COST OF QUALITY HAS ON THE PROFITABILITY OF THE COMPANY. • THE PURPOSE OF THE COST OF QUALITY REPORTING SYSTEM IS TO PROVIDE MANAGEMENT WITH A TOOL TO MEASURE EFFECTIVENESS AND IDENTIFY IMPORVEMENT AREAS.
OPTIMUM COST OF QUALITY.
Total Cost Direct Cost
Indirect Cost
Quality Level
DISTRIBUTION OF QUALITY COSTS
Total Quality Cost
External failure Internal failure Appraisal
Prevention Time Maturity of Quality System
DISTRIBUTION OF QUALITY COSTS
Total Quality Cost
External failure Internal failure Appraisal
Prevention Time Maturity of Quality System
Quality Costs
Internal Failure Costs
Scrap Rework
External Failure Costs
Warranty cost Product liability
Appraisal Costs
Inspection costs
Prevention Costs
Process improvement Product simplification Training costs
3-8a
DIRECT OPERATING QUALITY COST CURVE
Total Cost Failure Cost Prevention and Appraisal Cost Quality Level
Quality Costs
Scrap Rework
External Failure Costs
Continual Improvement
Internal Failure Costs
Decline
Little or no defective work
Decline
No dissatisfied customers
Warranty cost Product liability
Appraisal Costs
Decline
Very little inspection
Inspection costs
Prevention Costs
Increase
An ounce of prevention is worth a pound of cure
3-8
Process improvement Product simplification Training costs
ISO 9000
IT IS A QUALITY MANGEMENT SYSTEM IT TAKES THE MYSTERY OUT OF QUALITY. IT DEFINES QUALITY CHAPTER BY CHAPTER & VERSE BY VERSE.
DEFINITION OF ISO 9000
The ISO9000 standard defines the formal quality management system necessary to assure that the Technical, Administrative and Human
factors affecting the Quality of an Organisation‟s Products or Services are under control. Further this formal system must be implemented such that its effectiveness can be demonstrated to the organisation‟s Management, to the Customer‟s of the organisation and to an independent third party for the purpose of varification.
IMPORTANCE OF ISO 9000
INTERNAL : Vehicle To hold Quality Improvement Gains. Provides good platform for continuous Quality Improvement. Provides method for involving non-manufacturing areas in Quality & quality Improvement. Keeps high Employees‟ Moral & ensures their total Involvement.
ISO 9000 SERIES DETAILS
ISO 9000 : 2000 – Vocabulary & Definations ISO 9001:2000 – Certification Standard for implementation, audit & certification of the Q.M.S. with Process orientation aimed towards Customer Satisfaction and Continuous Improvement. ISO9004 :2000 – Guidelines for proceeding further on journey to TQM.
ISO 9000 EXPECTATIONS
Is the Organisation‟s Quality System adequate. Does the organisation follow its Quality system. Is there a Process orientation in the organisational activities. Is there a platform for holding the Gain and for Continuous Improvement.
Q.M.S. Continual Improvement Management Responsibility.
Resource Management
Measurement, Analysis & Improvement.
Customer Requirement
PRODUCT REALIZATION Input Out put Product
Customer Satisfaction
Role of QMS in Organizational Effectiveness.
IMPORTANCE OF ISO 9000.
EXTERNAL : Ensures Customer Satisfaction. Generates Customer Confidence thro‘ World class Products & Services. Ensures confidence with all stake holders in the organisation including
Suppliers, Investors,Share holders etc.
Fulfills commitments to Society & Country as a whole.
Does the Organisation audit itself. is there a evidence of documented Quality System Audits with evidence of resulting corrective action. Are Management reviews of the Quality System conducted and acted
upon?
TQM PIONEERS
WALTER SHEWART
FOUNDER OF P-D-C-A CYCLE.
ORIGINATOR OF STATISTICAL PROCSS CONTROL at A & T Bells Lab in 1930. W. EDWARD DEMING:
LED QUALITY REVOLUTION IN JAPAN POST WORLD WAR II. QUALITY IS A KEY COMPETITIVE ADVANTAGE DEMING QUALITY AWARD BY JAPAN IS THE MOST PRESTIGIOUS
QUALITY AWARD DEMING‘S FOURTEEN POINTS FOR EXCELLENCE. DEMING‘S SEVEN DEADLY DISEASES DEMING‘S CHAIN REACTION. DEMING‘S TRIANGLE. DEMING‘S CYCLE OR ACTION PLAN – P-D-C-A .
JOSEPH M. JURAN:
LED QUALITY REVOLUTION IN JAPAN POST WORLD WAR II HE DEFINED QUALITY AS FITNESS FOR USE BY CUSTOMER. JURAN‘s TRIOLOGY OF QUALITY PLANNING, QUALITY CONTROL &
QUALITY IMPROVEMENT. STARTED JURAN‘S INSTITUTE IN USA. INTRODUCED COST OF POOR QUALITY.
DEVELOPING A QUALITY HABIT. THE UNIVERSAL BREAKTHROUGH SEQUENCE.
PHILIP B. CROSBY :
STARTED CROSBY QUALITY COLLEGE. CREATED THE CONCEPT OF ―Zero defect‖. DEFINED QUALITY AS CONFORMANCE
TO REQUIRMENT. CROSBY‘S SIX ‗C‘s. CROSBY‘S FOUR ABSOLUTES OF QUALITY MANAGEMENT. CROSBY‘S QUALITY VACCINE. CROSBY‘S 14 STEPS FOR QUALITY IMPROVEMENT.
A.V. Feigenbaum ORIGINATOR OF „TQM‟ CONCEPT. HIS THEORY OF THREE STEPS TO QUALITY: QUALITY LEADERSHIP, MODERN QUALITY TECHNOLOGY & ORGANIZATIONAL COMMITMENT. VIEWED QUALITY AS A STRATEGIC BUSINESS TOOL. GENICHI TAGUCHI : QUALITY LOSS FUNCTION.
KAORU ISHIKAWA :
ORIGINATOR OF FISH BONE OR THE CAUSE AND EFFECT
DIAGRAM. Quality begins with Education & ends with Education. First step of Quality is to know the customer‟s Requirements. Ideal State of Quality Control occurs when Inspection is ni longer necessary. ORIGINATOR OF CONCEPT OF „CWQC‟.
RESPONSIBLE FOR INITIAL DEPLOYMENT OF QUALITY CIRCLES. REMOVE THE ROOT CAUSE & NOT THE SYSPTOMS.
MASAAKI IMAI : POPULARIZED THE KAIZAN CONCEPT OF CONTINUOUS IMPROVEMENT.
E. GOLDRAT THEORY OF CONSTRAINTS. TAIICHI OHNO : FORMULATED THE FLEXIBLE MANUFACTURING SYSTEM(FMS). FATHER OF THE JUST-IN-TIME & KANBAN SYSTEM OF MANUFACTURING. FATHER OF “TPS” OR TOYOTA PRODUCTION SYSTEM.
SHEIGO SHINGO : ORIGINATOR OF „SINGLE MINUTE EXCHANGE OF DIES‟- „SMED. INTRODUCING THE CONCEPT OF MODULAR MANUFACTURING. INTRODUCING THE CONCEPT OF „Poka-Yoke‟ or fool Proofing.
TQM PIONEERS
ALL OF THEM ADVOCATED “INVOLVEMENT 0F TOP MANAGEMENT”
DR. DEMING‟S FOURTEEN POINTS
1.ACHIEVE CONSTANCY OF PURPOSE. 2. LEARN A NEW PHILOSOPHY.
3.DO NOT DEPEND ON MASS INSPECTION. 4.REDUCE THE NO. OF VENDORS. 5.RECOGNISE TWO SOURCES OF FAULTS : -MANAGEMENT & PRODUCTION SYSTEMS. - PRODUCTION WORKER. 6. IMPROVE ON THE JOB TRAINING.
7. IMPROVE SUPERVISION. 8. DRIVE OUT FEAR. 9. IMPROVE COMMUNICATION. 10. ELIMINATE FEAR. 11. CONSIDER WORK STANDARDS CAREFULLY. 12. TEACH STATISTICAL METHODS. 13. ENCOURAGE NEW SKILLS. 14. USE STATISTICAL KNOWLEDGE.
Deming‟s Triangle :
Management Commitment to Improvement ( Points 1,2,14)
Improve Interrelationships (Points 4,7,8,9,10,11,12)
Apply Statistical Methodology. (Points 3,5,6, 13).
Deming‟s Seven deadly Diseases:
Lack of Constancy of Purpose. Emphasis on Short Term Profits. Over reliance on Performance Appraisals. Job hopping of Managers. Emphasis on Visual Controls. Excessive Medical Costs for Employee Health care. Excessive warranty & Legal costs.
Crosby‟s 6 C‟s :
Comprehension Commitment Competence Correction Communication Continuance
CROSBY‟S Four „Absolutes of Quality :
Quality is defined as conformance to requirement, not ―goodness‖. The system for achieving quality is prevention, not appraisal. The performance standard is zero defects, not ―that is‖ close enough..
The measurement of quality is the price of non-conformances, not indexes.
Five symptoms of Crosby‟s diagnosis of trouble company :
The company has an extensive field service for reworking and corrective
actions. The outgoing product normally deviates from the customer‘s requirements. Management does not provide a clear performances standard, so that employees develop their own. Management denies that it is the cause of problem. Managers tend to blame the workers in order to hide their inability the system. Management does not recognize the price of the non-conformance.
Crosby‟s 14 Steps for Quality Improvement :
Management commitment Quality improvement team Quality measurement Cost of quality Quality awareness
Corrective action
Zero defect planning Supervisor training Zero defects day Goal setting Error cause removal Recognition Quality councils
Do it all over again.
Major Components of Crosby‟s Quality Vaccine (or Crosby Triangle)
Integrity, policies
Communication
System, operations
Taguchi‟s Quality Loss Function
L = Cd² = C(X – T )²= Total Loss. Where, C= a Cost Constant, X= Actual average Value of Quality Characteristics. T = Target Value of Quality Characteristics.
Loss or cost function Loss (Rs) Customer Tolerance Band
Lower Specification limit
d
Target Value (T) Value (T)
d
Upper Specification limit
Process performances characteristics (x) (or quality characteristics)
3 M PRACTICE.
MURI – Unreasonableness. MURA – Unevenness. MUDA – Wastage. NINE WASTAGES(MUDA) :
Wastages due to disdain, jealousy, politics among team members and within an organization. Wastages due to excess “inventory” of raw material, W-I-P, finished goods, consumables etc. Wastages due to “Delay” in processing of queries, transportation, communication etc.. Wastages due to unwarranted “Paper Work”. Wastages due to loss of Production on account of ―machine Downtime”. Wastages due to ―Product/Service Defects, reworks” etc. Wastages due to ―Accidents”. Wastages due to faulty ―Process Design & Control”. Wastages due to ―Untapped & Misused Resources”.
5 S of HOUSEKEEPING. SEIRI – ORDERLINESS. SEISO – CLARITY. SEITON – TIDINESS. SEIKETSU – CLEANLINESS.
SHITSUKE – Practice all the four together.
Quality Awards And Certifications
The Malcolm Baldrige Award The Deming Prize Industry, regional, and company awards
–Institute of Industrial Engineers –NASA –European Quality Award
Malcolm Baldrige Award Criteria - 1996
Exhibit
3-11
Category
(1.0) (2.0) (3.0) (4.0) Leadership Information and Analysis Strategic Planning Human Resource Development and Management (5.0) Process Management (6.0) Business Results (7.0) Customer Focus and Satisfaction
Maximum Points 90 75 55 140 140 250 250 1000
3-15
TOTAL POINTS
THE CORE VALUES OF THE MALCOLM BALDRIGE NATIONAL QUALITY AWARDS (MBNQA)
• • • • • • • • • • • CUSTOMER DRIVEN QUALITY. LEADERSHIP. CONTINUOUS IMPROVEMENT & LEARNING. VALUING EMPLOYEES. FAST RESPONSE. DESIGN QUALITY & PREVENTION. LONG RANGE OUTLOOK OF THE QUALITY PLAN. MANAGEMENT BY FACT. PARTNERSHIP DEVELOPMENT. CORPORATE RESPONSIBILITY & CITIZENSHIP. RESULT FOCUS.
THE MALCOLM BRIDGE CRITERIA FOR PERFORMANCE EXCELLENCE FRAMEWORK- A SYSTEM PROSPECTIVE
CUSTOMERS & MARKET FOCUSED STRATEGY & ACTION PLAN
2. STRATEGIC PLANNING
5. HUMAN RESOURCE FOCUS
1. LEADERSHIP
7. BUSINESS RESULTS
3. CUSTOMER & MARKET FOCUS
6. PROCESS MANAGEMENT
4. INFORMATION & ANALYSIS
FIGURE NO 33
THE MALCOLM BALDRIGE NATIONAL QUALITY AWARD ( MBNQA) CRITERIA
» CATEGORIES/ ITEMS • LEADERSHIP – ORGANISATIONAL LEADERSHIP ---85 – PUBLIC RESPONSIBILITY & CITIZENSHIP--40 STRATEGIC PLANNING – STRATEGY DEVELOPMENT—40 – STRATEGY DEPLOYMENT--- 45 CUSTOMER & MARKET FOCUS – CUSTOMER & MARKET KNOWLEDGE —40 – CUSTOMER SATISFACTION & RELATIONSHIP--45 INFORMATION & ANALYSIS – MEASUREMENT OF ORGANISATIONAL PERFORMANCE—40 – ANALYSIS OF ORGANISATIONAL PERFORMANCE ----45 HUMAN RESOURCE FOCUS – WORK SYSTEM -- 35 – EMPLOYEE EDUCATION, TRAINING & DEVELOPMENT—25 – EMPLOYEE WELLBEING & SATISFACTION ---25
– POINT VALUES
– 125
•
– 85
•
– 85
•
– 85
•
– 85
•
PROCESS MANAGEMENT
– PRODUCT & SERVICE PROCESSES --55 – SUPPORT PROCESSES --15 – SUPPLIES & PARTNERING PROCESSES --15 – CUSTOMER FOCUSED RESULTS- 115 – FINANCIAL & MARKET RESULTS —115 – HUMAN RESOURCE RESULTS --- 80 – SUPPLIES & PARTNER RESULTS --- 25 – ORGANISATIONAL EFFECTIVENESS RESULTS--115
– TOTAL POINTS
• 85
•
BUSINESS RESULTS
• 450
• 1000
EUROPEAN QUALITY AWARDS: SCORING PROCESS
L E A D E R S H I P
PEOPLE MANAGEMENT 90
POLICY & STRATEGY 80
P R O C E S S E S
PEOPLE SATISFACTION 90
B U S I N E S S U T I L I T I E S 1 5 0
CUSTOMER SATISFACTION 200
1 0 0
RESOURCES 90
1 4 0
IMPACT ON SOCIETY 60
ENABLERS 500 FIGURE NO. 32
RESULTS 500
MANAGEMENT
By Dr. P.N.Mukherjee
MANAGEMENT
DEFINITION: Management is the process of designing and maintaining an environment conducive for performance for a group of people working together for attainment of a common objective in time
‘Operation Management’ is the effective and efficient management of a Process. A ‘Process’ has an input and value added output and the objective of a process is to add value by conversion from input to output .
MANAGEMENT
FINANCE TECHNOLOGY
RAW MATERIAL VALUE ADDITION BY CONVERSION
PRODUCTS & SERVICES
MARKET
MEN
MACHINE
ENVIRONMENT
MANUFACTURING INDUSTRY
OUTPUT INPUT RAW MATERIAL VALUE ADITION BY CONVERSION VALUE ADDED PRODUCT & SERVICES.
SERVICE INDUSTRY
OUTPUT INPUT CUSTOMER VALUE ADITION BY CONVERSION VALUE ADDED CUSTOMER
Goods Vs Services
Goods Tangible Can be inventoried
No interaction between customer and process
Services Intangible Cannot be inventoried Direct interaction between customer and process
Most „products‟ are a „bundle‟ of Goods & Services
Input Transformation Output Relationships for typical systems
System Inputs (Primary)
Travelers
Resources
Transformation (Primary)
Move to destination
Typical Desired Output
On-time, Safe & comfortable delivery to destination
Airline
Airplanes, Crew, Ticketing scheduling systems Doctors, Nurses, Technicians, Medicines, Equipments etc. Labs, Classrooms
Hospital
Patients
Physiological Health Satisfied, care Healthy individual Educated individuals Satisfied customers
University HSC - Pass Teachers, Books, Imparting
Outs Knowledge & Skills
Restauran t
Hungry Customers
Food, Chef, Staff, Good Food, WellEnvironment served. Agreeable environment
QUALITY
FITNESS FOR USE FITNESS FOR PURPOSE CONFORMANCE TO REQUIREMENTS TOTALITY OF FEATURES AND CHARECTERISTICS SATISFY STATED AND IMPLIED NEEDS CUSTOMER SATISFACTION
QUALITY IS USER AS WELL AS PRODUCT SPECIFIC . THE SAME PRODUCT IS OF GOOD QUALITY TO CERTAIN USER SEGMENT CAN BE OF BAD QUALITY TO ANOTHER USER SEGMENT.
OPERATION MANAGEMENT is the ‘effective and efficient management of
a Process’.
TQM IS ORIENTATION TOWARDS PROCESS & COMPANY WIDE PERFORMANCE EXCELLENCE IN ALL FUNCTIONS INVOLVING EVERYBODY. OBJECTIVES OF A WORLD CLASS ORGANIZATION
THREE CRITICAL FACTORS FOR SURVIVAL & PERFORMANCE EXCELLENCE OF AN INDUSTRY:
A. COMPETITIVE ADVANTAGE. B. CUSTOMER SATISFACTION. C. INCREASE RETURN ON INVESTMENT (ROI).
COMPETITIVE ADVANTAGES
COMPETITIVE ADVANTAGES
CUSTOMER Needs seeking benefits at acceptable prices
Va lu e.
COMPETITOR. Assets & Utilization
COMPANY. Assets & utilization.
e lu Va
Cost diff.
WORLD CLASS PERFORMANCE & LEADERSHIP
RESULTS DELIGHTED CUSTOMERS EMPOWERED EMPLOYEES INCREASED REVENUES REDUCTION IN COPQ
QUALITY IMPROVEMENT
TOTAL QUALITY MANAGEMENT PROCESS
QUALITY CONTROL QUALITY PLANNING QUALITY MANAGEMENT SYSTEM—ISO 9000 SUPPLY CHAIN MANAGMENT TOTAL ORGANISATION INVOLVEMENT CONTINUOUS IMPROVEMENT STRATEGIC QUALITY PLANNING
INFRASTRUCTURE
FOUNDATION
CUSTOMER FOCUS
CUSTOMER SATISFACTION :
Customer Satisfaction is attained if the customer‟s stated , implied and latent needs are fulfilled. The evidence of customer‟s satisfaction is his continued patronage of the same brand & product, his feedback , reduction in customer complaint & increase in sales and market share. Maximization of Services decides the market leadership as product “quality” becomes a mandatory requirement.
The Customer Satisfaction is attained by providing the Goods & Services of Right Quality & Right Quantity at the Right Time, Right Place and Right Price.
CUSTOMER SATISFACTION : VALUE FOR MONEY.
Unless the Product or Service we offer can be distinguished in some way from the competitors, there is a likely hood that the Market place will view it as a “Commodity” and so the sale will tend to go to the cheapest supplier. Hence the importance of seeking to add additional values to our offering to mark it out from the competition. Adding value through differentiation of the Products or Services creates value segments which is a powerful means of achieving a defensible advantage in the market. MAXIMIZATION OF RETURN ON INVESTMENT A. INCREASE PROFIT MARGIN BY a. Price Increase. b. Reduce Cost of Production. B. INCREASE THROUGHPUT OR WORKING CAPITAL TURNOVER .
ROI = Net Income / Investment. = (Net Income/Revenue) X (Revenue/Investment) = Return on Revenue X Investment Turnover.
BALANCE SCORE CARD.
FINANCIAL PERSPECTIVE 1. ROI. 2. CASH FLOW. 3. PROFIT. CUSTOMER PERSPECTION
1. CUSTOMER SATISFACTION. 2.COMPETITIVE ADVANTAGE. 3.MARKET SHARE. 4. BRAND IMAGE.
INTERNAL BUSINESS PERSPECTIVE 1. EMPLOYEE SATISFACTION. 2. EMPLOYEE TURNOVER. 3. INVENTORY TURNOVER. 4. SAFETY RECORD. 5. PROJECT PERFORMANCE.
INNOVATION & LEARNING PERSPECTIVE
1.NO. OF IMPROVEMENTS P.A 2.NO. OF NEW PRODUCTS P.A. 3.NO. OF NEW MARKET SEGEM -ENT ADDED P.A. 4.NO. OF NEW CUSTOMERS P.A
NATURE OF MANAGEMENT
As managers ,people carry out the managerial functions following P-D-CA cycle. Management applies to any kind of organisation. It applies to managers at all organisational levels to both manufacturing & service Industries. The aim of all managers is the same, to create a surplus. Managing is concerned with productivity ,this implies effectiveness and efficiency.
DEFINATION OF PRODUCTIVITY
Successful companies create a surplus through productive operations. Productivity is defined as output input ratio within a time period with due consideration for quality.
Productivity = outputs (within a time period inputs quality considered)
Peter F Drucker one of the most prolific writers in management observed, “ The
greatest opportunity is surely to be found in the knowledge work itself ,and especially in management.
Effectiveness is the nearness to the achievement of the end objective. Efficiency is the maximization of output or value addition with the least amount of resources. Managers can not know whether they are productive unless they first know their goals and those of the organization
Current Managerial Function Deming‟s (Shewarts‟s) P-D-C-A Cycle
Act
Plan
Co nu nt i ou s
Check
Do
p Im ro
m ve
en
t
Quality Management System (ISO 9000)
PLANNING
DEFINITION: Planning is the decision making process of choosing the best alternative consuming least amount of input resources and giving the maximum output for attaining the desired objective in time.
DO – Execute or Implement the Plan as per schedule with effectiveness and efficiency. CHECK – is to ascertain the „Deviation‟ between what was planned what has happened and what is the „Root Cause‟ for the same. ACT – After analyzing the root cause take the Corrective and Preventive actions so that a mistake once occurred leading top a deviation is never ever repeated again. Since it is a cycle, incorporate these corrective & preventive actions in the next plan so that the organization is in a path of „Continuous Improvement‟ by continual elimination of mistakes or solving the problems.
To ensure that once an improvement has been done, it is permanently part of the system & it never retracts, a ‘Quality Management System’ – ISO 9001:2000 is implemented.
SKILLS & MANAGEMENT LEVELS
Top Management
Concept ual & Design Human Skill Skill Technical Skills
Middle Management
Supervisors
DEPARTMENTAL FUNCTION
• VERTICAL CHIMNEYS
Purchase Dept.Á
Production „Dept. „‟B
Finance „Dept. Ç
Marketing Dept. D
CONVENSIONAL ORGANISATION ( - 1+ 1 = 0 )
HORIZONTAL QUALITY THINKING
• WORLD CLASS ORGANISATION(1&1=11)
HR
Production
Finance
Marketing
Customer Satisfaction
THE VALUE CHAIN CONCEPT
New Product Development
Marketing Materials ProductionDistribution Service & Sales
Finance, Technology, IT, Human resource & Management
DEPARTMENTAL FUNCTIONS
Concept of Internal Customer
Maintenance Dept. Machines of right quality, Quantity, cost & at right time And place Finance Dept. Finance of right Quality, quantity, Cost ,at right time And place HR Department Human Resource of Right quality, quantity At right cost ,time & place
Materials Department - R.M. of Right Quality, Quantity, Price at right Time and Place
Production Value addition by Conversion
Marketing Creation of Esteem Value
Customer
THE FUNDAMENTALS OF CUSTOMER SATISFACTION
UNDERSTAND & BELIEVE IN THE IMPORTANCE OF SATISFYING CUSTOMERS. TRUST YOUR CUSTOMERS. BUILD CUSTOMER RESPECT IN THE VALUE SYSTEM OF THE EMPLOYEES. ESTABLISH „LISTENING POSTS‟ FOR EMPLOYEES AT ALL LEVEL. LET YOUR CUSTOMERS INTERACT WITH YOUR EMPLOYEES. INCORPORATE CUSTOMER SATISFACTION OBJECTIVES IN THE „KRAs‟. EMPOWER EMPLOYEES TO DELIVER HIGH LEVEL OF CUSTOMER SATISFACTION.
TQM – TOTAL QUALITY MANAGEMENT
IS AN ORGANISED SCIENTIFIC APPROACH TOWARDS CONTINUOUS IMPROVEMENT OF QUALITY INVOLVING EVERYONE IN THE ORGANISATION COVERING EVERY FUNCTIONS AIMED TOWARDS TOTAL CUSTOMER SATISFACTION
THREE PILLARS OF TQM :
CUSTOMER SATISFACTION. CONTINUOUS IMPROVEMENT TOTAL EMPLOYEE INVOLVEMENT.
Competitive Benefits of TQM
Higher prices or Increased market share
Exhibit
3-4
Continual Quality Improvement
Improved competitive position
Market-Route Benefits
Increased revenue Increased profits
Increased defect-free output
Reduced cost of operations
Cost-Route Benefits
3-7
WORLD COMPETITION IN QUALITY
THE WEST (COMPANY X)
JA
N PA
YY AN P OM (C
)
1950
1960
1970
1980
1990
JOURNEY TO TOTAL QUALITY LONG ENDURING JOURNEY OF INDETERMINATE LENGTH.
IN THE BOTTOM-UP APPROACH FOCUS AT THE OPERATIONAL LEVEL. • Move the Ideas to each employees at their speed. • Do not force strategy but aim to change people‟s mindset. • Never under-estimate people power. • Develop ways of Horizontal Quality Thinking. • Challenges “Business-As-Usual” Attitudes
ATTAINMENT OF DESIRED QUALITY REQUIRED COMMITMENT AND PARTICIPATION OF ALL MEMBERS IN AN ORGANISATION WHEREAS RESPONSIBILITY OF QUALITY MANAGEMENT BELONGS TO THE TOP MANAGEMENT.
Eight Characteristics of A World Class Organisation
(Thomas Peters & Robert Watermann)
Were Action oriented. Were customer oriented (Learned about needs of their customer). Promoted managerial autonomy and empowerment. Achieved productivity by employee orientation.
Led by sound value of their leader (A role model). Focused on business they knew best (Core competence). Simple and lean organisation. Flexible orientation – Centralised as well as De-Centralised.
INSPECTION
POST PRODUCTION EXERCISES. GRADING, SALVAGE. CORRECTIONS.
QUALITY ASSURANCE
PROCESS COMPLIANCE IN MANUFACTURING. STATISTICAL PROCESS CONTROL. CORRECTIVE ACTIONS. ISO 9000: 1994.
TQC – TOTAL QUALITY CONTROL
EXTENSIVE USE OF QUALITY IMPROVEMENT TOOLS. COMPANY WIDE QUALITY ASSURANCE – CWQA. CORRECTIVE & PREVENTIVE ACTIONS. TOTAL QUALITY MANAGEMENT - TQM CONTINUAL IMPROVEMENT CUSTOMER ORIENTATION TEI-TOTAL EMPLOYEE INVOLVEMENT ATTAINMENT OF DESIRED QUALITY REQUIRED COMMITMENT AND PARTICIPATION OF ALL MEMBERS IN AN ORGANISATION WHEREAS RESPONSIBILITY OF QUALITY MANAGEMENT BELONGS TO THE TOP MANAGEMENT.
QUALITY POLICY
THE OVERALL QUALITY INTENSIONS AND DIRECTIONS OF AN ORGANISATION AS REGARDS “QUALITYÄS FORMALLY EXPRESSED BY THE TOP MANAGEMENT.
QUALITY MANAGEMENT
THE ASPECT OF OVERALL MANAGEMENT FUNCTION THAT DETERMINES AND IMPLEMENTS THE QUALITY POLICY.
QUALITY SYSTEM
THE ORGANISATIONAL STRUCTURE, RESPONSIBILITIES, PROCEDURES, PROCESSES AND RESOURCES FOR
IMPLEMENTATION OF THE QUALITY SYSTEM.
QUALITY CONTROL (Control over process)
The operational techniques and activities that are used to fulfill the requirements of quality aimed both at monitoring a Process and at eliminating causes for unsatisfactory performance.
QUALITY ASSURANCE.
ALL THOSE PLANNED AND SYSTAMATIC ACTIONS NECESSARY TO PROVIDE ADEQUATE COFIDENCE THAT A PRODUCT AND SERVICE WILL SATISFY GIVEN REQUIREMENT.
Relationship of Concepts
Quality Management Aspects(Policy)
Eight Building Blocks of OM/TQM:
Act always in line With Customer Needs
Develop an Internal Customer – Supplier Relationship
Satisfy All Parties at the Same time
Measure “value added”
Involve all participants In the enterprise
Do it Right the First Time
Focus on Prevention
Work under the “7 ZERO” Banner
LEAN MANAGEMENT SYSTEM : ELIMINATION OF WASTAGES / MUDAS. PROCESS IMPROVEMENTS BY ELIMINATION OF NON VALUE ADDED ACTIVIIES “SEVEN ZERO (mudas)”: ZERO DISDAIN FOR OTHERS. ZERO STOCK. ZERO DELAY ZERO PAPER. ZERO DOWNTIME. ZERO DEFECT. ZERO ACCIDENT. TWO MORE MUDAS : LOST OF OPPORTUNITY. INADEQUATE UTILIZATION OF ANY RESOURCES OR ANY RESOURCE LYING IDLE.
ACTIVITIES IN A PROCESS :
OPERATION. TRANSPORTATION. INSPECTION STORAGE DELAY
MAXIMIZE VALUE ADDING ACTIVITIES THAT IS „OPERATION’. MINIMIZE NON VALUE ADDED ACTIVITIES THAT IS „TRANSPORT’, ‘DELAY’, ‘INSPECTION’ AND ‘STORAGE’.
This is the way to improve the ‘Process Efficiency’. ELEVEN TQM STEPS to be an WORLD CLASS ORGANISATION TQM overview. Set MISSION. Identify CUSTOMERS. Identify Customer‟s Needs. Define CRITICAL PROCESS & MEASURES. Set Organizational VISION. Develop Strategic Plan (10-20 yrs) Develop Annual Plan for Breakthrough Revise Roles and Responsibilities Form Steering Committee to set change strategy. Annual Review
PRE-REQUISITES for SUCCESS for “TQM”
COMMITTMENT AT THE TOP ORGANISATION for QUALITY STRATEGIC DIRECTION CUSTOMER ORIENTATION NEED-BASED EDUCATION & TRAINING TOTAL INVOLVEMENT of EMPLOYEES SUPPORTIVE CULTURE
TEAMWORK PREVENTION BASED SYSTEMS RECOGNITION &REWARD SYSTEM
COST OF QUALITY
• THE QUALITY SYSTEM MUST INCLUDE METHODS AND PROCEDURES TO DETERMINE AND EVELUATE THE IMPACT THE COST OF QUALITY HAS ON THE PROFITABILITY OF THE COMPANY. • THE PURPOSE OF THE COST OF QUALITY REPORTING SYSTEM IS TO PROVIDE MANAGEMENT WITH A TOOL TO MEASURE EFFECTIVENESS AND IDENTIFY IMPORVEMENT AREAS.
OPTIMUM COST OF QUALITY.
Total Cost Direct Cost
Indirect Cost
Quality Level
DISTRIBUTION OF QUALITY COSTS
Total Quality Cost
External failure Internal failure Appraisal
Prevention Time Maturity of Quality System
DISTRIBUTION OF QUALITY COSTS
Total Quality Cost
External failure Internal failure Appraisal
Prevention Time Maturity of Quality System
Quality Costs
Internal Failure Costs
Scrap Rework
External Failure Costs
Warranty cost Product liability
Appraisal Costs
Inspection costs
Prevention Costs
Process improvement Product simplification Training costs
3-8a
DIRECT OPERATING QUALITY COST CURVE
Total Cost Failure Cost Prevention and Appraisal Cost Quality Level
Quality Costs
Scrap Rework
External Failure Costs
Continual Improvement
Internal Failure Costs
Decline
Little or no defective work
Decline
No dissatisfied customers
Warranty cost Product liability
Appraisal Costs
Decline
Very little inspection
Inspection costs
Prevention Costs
Increase
An ounce of prevention is worth a pound of cure
3-8
Process improvement Product simplification Training costs
ISO 9000
IT IS A QUALITY MANGEMENT SYSTEM IT TAKES THE MYSTERY OUT OF QUALITY. IT DEFINES QUALITY CHAPTER BY CHAPTER & VERSE BY VERSE.
DEFINITION OF ISO 9000
The ISO9000 standard defines the formal quality management system necessary to assure that the Technical, Administrative and Human
factors affecting the Quality of an Organisation‟s Products or Services are under control. Further this formal system must be implemented such that its effectiveness can be demonstrated to the organisation‟s Management, to the Customer‟s of the organisation and to an independent third party for the purpose of varification.
IMPORTANCE OF ISO 9000
INTERNAL : Vehicle To hold Quality Improvement Gains. Provides good platform for continuous Quality Improvement. Provides method for involving non-manufacturing areas in Quality & quality Improvement. Keeps high Employees‟ Moral & ensures their total Involvement.
ISO 9000 SERIES DETAILS
ISO 9000 : 2000 – Vocabulary & Definations ISO 9001:2000 – Certification Standard for implementation, audit & certification of the Q.M.S. with Process orientation aimed towards Customer Satisfaction and Continuous Improvement. ISO9004 :2000 – Guidelines for proceeding further on journey to TQM.
ISO 9000 EXPECTATIONS
Is the Organisation‟s Quality System adequate. Does the organisation follow its Quality system. Is there a Process orientation in the organisational activities. Is there a platform for holding the Gain and for Continuous Improvement.
Q.M.S. Continual Improvement Management Responsibility.
Resource Management
Measurement, Analysis & Improvement.
Customer Requirement
PRODUCT REALIZATION Input Out put Product
Customer Satisfaction
Role of QMS in Organizational Effectiveness.
IMPORTANCE OF ISO 9000.
EXTERNAL : Ensures Customer Satisfaction. Generates Customer Confidence thro‘ World class Products & Services. Ensures confidence with all stake holders in the organisation including
Suppliers, Investors,Share holders etc.
Fulfills commitments to Society & Country as a whole.
Does the Organisation audit itself. is there a evidence of documented Quality System Audits with evidence of resulting corrective action. Are Management reviews of the Quality System conducted and acted
upon?
TQM PIONEERS
WALTER SHEWART
FOUNDER OF P-D-C-A CYCLE.
ORIGINATOR OF STATISTICAL PROCSS CONTROL at A & T Bells Lab in 1930. W. EDWARD DEMING:
LED QUALITY REVOLUTION IN JAPAN POST WORLD WAR II. QUALITY IS A KEY COMPETITIVE ADVANTAGE DEMING QUALITY AWARD BY JAPAN IS THE MOST PRESTIGIOUS
QUALITY AWARD DEMING‘S FOURTEEN POINTS FOR EXCELLENCE. DEMING‘S SEVEN DEADLY DISEASES DEMING‘S CHAIN REACTION. DEMING‘S TRIANGLE. DEMING‘S CYCLE OR ACTION PLAN – P-D-C-A .
JOSEPH M. JURAN:
LED QUALITY REVOLUTION IN JAPAN POST WORLD WAR II HE DEFINED QUALITY AS FITNESS FOR USE BY CUSTOMER. JURAN‘s TRIOLOGY OF QUALITY PLANNING, QUALITY CONTROL &
QUALITY IMPROVEMENT. STARTED JURAN‘S INSTITUTE IN USA. INTRODUCED COST OF POOR QUALITY.
DEVELOPING A QUALITY HABIT. THE UNIVERSAL BREAKTHROUGH SEQUENCE.
PHILIP B. CROSBY :
STARTED CROSBY QUALITY COLLEGE. CREATED THE CONCEPT OF ―Zero defect‖. DEFINED QUALITY AS CONFORMANCE
TO REQUIRMENT. CROSBY‘S SIX ‗C‘s. CROSBY‘S FOUR ABSOLUTES OF QUALITY MANAGEMENT. CROSBY‘S QUALITY VACCINE. CROSBY‘S 14 STEPS FOR QUALITY IMPROVEMENT.
A.V. Feigenbaum ORIGINATOR OF „TQM‟ CONCEPT. HIS THEORY OF THREE STEPS TO QUALITY: QUALITY LEADERSHIP, MODERN QUALITY TECHNOLOGY & ORGANIZATIONAL COMMITMENT. VIEWED QUALITY AS A STRATEGIC BUSINESS TOOL. GENICHI TAGUCHI : QUALITY LOSS FUNCTION.
KAORU ISHIKAWA :
ORIGINATOR OF FISH BONE OR THE CAUSE AND EFFECT
DIAGRAM. Quality begins with Education & ends with Education. First step of Quality is to know the customer‟s Requirements. Ideal State of Quality Control occurs when Inspection is ni longer necessary. ORIGINATOR OF CONCEPT OF „CWQC‟.
RESPONSIBLE FOR INITIAL DEPLOYMENT OF QUALITY CIRCLES. REMOVE THE ROOT CAUSE & NOT THE SYSPTOMS.
MASAAKI IMAI : POPULARIZED THE KAIZAN CONCEPT OF CONTINUOUS IMPROVEMENT.
E. GOLDRAT THEORY OF CONSTRAINTS. TAIICHI OHNO : FORMULATED THE FLEXIBLE MANUFACTURING SYSTEM(FMS). FATHER OF THE JUST-IN-TIME & KANBAN SYSTEM OF MANUFACTURING. FATHER OF “TPS” OR TOYOTA PRODUCTION SYSTEM.
SHEIGO SHINGO : ORIGINATOR OF „SINGLE MINUTE EXCHANGE OF DIES‟- „SMED. INTRODUCING THE CONCEPT OF MODULAR MANUFACTURING. INTRODUCING THE CONCEPT OF „Poka-Yoke‟ or fool Proofing.
TQM PIONEERS
ALL OF THEM ADVOCATED “INVOLVEMENT 0F TOP MANAGEMENT”
DR. DEMING‟S FOURTEEN POINTS
1.ACHIEVE CONSTANCY OF PURPOSE. 2. LEARN A NEW PHILOSOPHY.
3.DO NOT DEPEND ON MASS INSPECTION. 4.REDUCE THE NO. OF VENDORS. 5.RECOGNISE TWO SOURCES OF FAULTS : -MANAGEMENT & PRODUCTION SYSTEMS. - PRODUCTION WORKER. 6. IMPROVE ON THE JOB TRAINING.
7. IMPROVE SUPERVISION. 8. DRIVE OUT FEAR. 9. IMPROVE COMMUNICATION. 10. ELIMINATE FEAR. 11. CONSIDER WORK STANDARDS CAREFULLY. 12. TEACH STATISTICAL METHODS. 13. ENCOURAGE NEW SKILLS. 14. USE STATISTICAL KNOWLEDGE.
Deming‟s Triangle :
Management Commitment to Improvement ( Points 1,2,14)
Improve Interrelationships (Points 4,7,8,9,10,11,12)
Apply Statistical Methodology. (Points 3,5,6, 13).
Deming‟s Seven deadly Diseases:
Lack of Constancy of Purpose. Emphasis on Short Term Profits. Over reliance on Performance Appraisals. Job hopping of Managers. Emphasis on Visual Controls. Excessive Medical Costs for Employee Health care. Excessive warranty & Legal costs.
Crosby‟s 6 C‟s :
Comprehension Commitment Competence Correction Communication Continuance
CROSBY‟S Four „Absolutes of Quality :
Quality is defined as conformance to requirement, not ―goodness‖. The system for achieving quality is prevention, not appraisal. The performance standard is zero defects, not ―that is‖ close enough..
The measurement of quality is the price of non-conformances, not indexes.
Five symptoms of Crosby‟s diagnosis of trouble company :
The company has an extensive field service for reworking and corrective
actions. The outgoing product normally deviates from the customer‘s requirements. Management does not provide a clear performances standard, so that employees develop their own. Management denies that it is the cause of problem. Managers tend to blame the workers in order to hide their inability the system. Management does not recognize the price of the non-conformance.
Crosby‟s 14 Steps for Quality Improvement :
Management commitment Quality improvement team Quality measurement Cost of quality Quality awareness
Corrective action
Zero defect planning Supervisor training Zero defects day Goal setting Error cause removal Recognition Quality councils
Do it all over again.
Major Components of Crosby‟s Quality Vaccine (or Crosby Triangle)
Integrity, policies
Communication
System, operations
Taguchi‟s Quality Loss Function
L = Cd² = C(X – T )²= Total Loss. Where, C= a Cost Constant, X= Actual average Value of Quality Characteristics. T = Target Value of Quality Characteristics.
Loss or cost function Loss (Rs) Customer Tolerance Band
Lower Specification limit
d
Target Value (T) Value (T)
d
Upper Specification limit
Process performances characteristics (x) (or quality characteristics)
3 M PRACTICE.
MURI – Unreasonableness. MURA – Unevenness. MUDA – Wastage. NINE WASTAGES(MUDA) :
Wastages due to disdain, jealousy, politics among team members and within an organization. Wastages due to excess “inventory” of raw material, W-I-P, finished goods, consumables etc. Wastages due to “Delay” in processing of queries, transportation, communication etc.. Wastages due to unwarranted “Paper Work”. Wastages due to loss of Production on account of ―machine Downtime”. Wastages due to ―Product/Service Defects, reworks” etc. Wastages due to ―Accidents”. Wastages due to faulty ―Process Design & Control”. Wastages due to ―Untapped & Misused Resources”.
5 S of HOUSEKEEPING. SEIRI – ORDERLINESS. SEISO – CLARITY. SEITON – TIDINESS. SEIKETSU – CLEANLINESS.
SHITSUKE – Practice all the four together.
Quality Awards And Certifications
The Malcolm Baldrige Award The Deming Prize Industry, regional, and company awards
–Institute of Industrial Engineers –NASA –European Quality Award
Malcolm Baldrige Award Criteria - 1996
Exhibit
3-11
Category
(1.0) (2.0) (3.0) (4.0) Leadership Information and Analysis Strategic Planning Human Resource Development and Management (5.0) Process Management (6.0) Business Results (7.0) Customer Focus and Satisfaction
Maximum Points 90 75 55 140 140 250 250 1000
3-15
TOTAL POINTS
THE CORE VALUES OF THE MALCOLM BALDRIGE NATIONAL QUALITY AWARDS (MBNQA)
• • • • • • • • • • • CUSTOMER DRIVEN QUALITY. LEADERSHIP. CONTINUOUS IMPROVEMENT & LEARNING. VALUING EMPLOYEES. FAST RESPONSE. DESIGN QUALITY & PREVENTION. LONG RANGE OUTLOOK OF THE QUALITY PLAN. MANAGEMENT BY FACT. PARTNERSHIP DEVELOPMENT. CORPORATE RESPONSIBILITY & CITIZENSHIP. RESULT FOCUS.
THE MALCOLM BRIDGE CRITERIA FOR PERFORMANCE EXCELLENCE FRAMEWORK- A SYSTEM PROSPECTIVE
CUSTOMERS & MARKET FOCUSED STRATEGY & ACTION PLAN
2. STRATEGIC PLANNING
5. HUMAN RESOURCE FOCUS
1. LEADERSHIP
7. BUSINESS RESULTS
3. CUSTOMER & MARKET FOCUS
6. PROCESS MANAGEMENT
4. INFORMATION & ANALYSIS
FIGURE NO 33
THE MALCOLM BALDRIGE NATIONAL QUALITY AWARD ( MBNQA) CRITERIA
» CATEGORIES/ ITEMS • LEADERSHIP – ORGANISATIONAL LEADERSHIP ---85 – PUBLIC RESPONSIBILITY & CITIZENSHIP--40 STRATEGIC PLANNING – STRATEGY DEVELOPMENT—40 – STRATEGY DEPLOYMENT--- 45 CUSTOMER & MARKET FOCUS – CUSTOMER & MARKET KNOWLEDGE —40 – CUSTOMER SATISFACTION & RELATIONSHIP--45 INFORMATION & ANALYSIS – MEASUREMENT OF ORGANISATIONAL PERFORMANCE—40 – ANALYSIS OF ORGANISATIONAL PERFORMANCE ----45 HUMAN RESOURCE FOCUS – WORK SYSTEM -- 35 – EMPLOYEE EDUCATION, TRAINING & DEVELOPMENT—25 – EMPLOYEE WELLBEING & SATISFACTION ---25
– POINT VALUES
– 125
•
– 85
•
– 85
•
– 85
•
– 85
•
PROCESS MANAGEMENT
– PRODUCT & SERVICE PROCESSES --55 – SUPPORT PROCESSES --15 – SUPPLIES & PARTNERING PROCESSES --15 – CUSTOMER FOCUSED RESULTS- 115 – FINANCIAL & MARKET RESULTS —115 – HUMAN RESOURCE RESULTS --- 80 – SUPPLIES & PARTNER RESULTS --- 25 – ORGANISATIONAL EFFECTIVENESS RESULTS--115
– TOTAL POINTS
• 85
•
BUSINESS RESULTS
• 450
• 1000
EUROPEAN QUALITY AWARDS: SCORING PROCESS
L E A D E R S H I P
PEOPLE MANAGEMENT 90
POLICY & STRATEGY 80
P R O C E S S E S
PEOPLE SATISFACTION 90
B U S I N E S S U T I L I T I E S 1 5 0
CUSTOMER SATISFACTION 200
1 0 0
RESOURCES 90
1 4 0
IMPACT ON SOCIETY 60
ENABLERS 500 FIGURE NO. 32
RESULTS 500
