Title: Total Quality Management
1Total Quality Management
2What is Quality?
- A degree or level of excellence.
- Difficult to define
- Various attributes
- Quality is determined by what
- Customers want is willing
- to pay for.
3What is Quality?
- Different needs of consumersDifferent Quality
ExpectationsFitness for UseHow well the product
or servicedoes what the consumer thinks It is
supposed to do
4Customers PerspectiveManufactured
products-Quality
- Performance Basic operating characteristics.
- How well a car handles or its gas mileage?
- Reliability Product Operating properly within
an - expected time frame.
- Durability Life span of product before
replacement. - Serviceability Ease of getting repairs, speed
of repairs. - Aesthetics How a product looks, sound , feels,
smells. - Safety
5Customers PerspectiveService Quality
- Time and timeliness Customer waiting time.
- Completeness Is everything provided?
- Courtesy How customers are treated?
- Consistency Same level of service each time.
- Accessibility and convenience Easy to obtain
- Service.
- Accuracy Is the service performed right every
time?
6Quality Two Perspectives
7Quality Evolution
Quality Control focus is to stop poor quality
products going to customers Inspection after
the fact.
8TQM (Total Quality Management)
The management of quality throughout the
organization at all levels and across all areas.
9TQM (Management Principles)
- The customer defines quality, and customers
needs - are top priority.
- Top management must provide the leadership
- for quality.
- Quality is a strategic issue.
- Quality is the responsibility of all employees.
- Focus on continuous quality improvement.
- Quality problems are solved through cooperation.
- Use of statistical quality control methods.
- Training education of all employees.
10How TQM Companies Work?
- Traditional Companies
- Company / Product
- driven.
- The customer can have any
- Color car as long as its black.
- Henry Ford
- Short term profitability
- TQM Companies
- Customer driven
- What is our business?
- Is not determined by the
- Producer but by the
- Consumer.
- Peter Drucker
- Long term commitment
11How TQM Companies Work?
- TQM Companies
- Continuous improvement
- Quality at the source
- High employee
- Participation
- Cross functional teams
- Elimination of waste
- Traditional Companies
- High production cost
- waste
- Inspection after the fact
- Top-down approach
- Fortressed departments
- High scrap rework
12TQM Tools
- The Plan- Do- Check- Act cycle
- Quality Circles
- Benchmarking
- Statistical quantitative tools
13The PDCA Cycle
14Quality Circles
15Benchmarking
Continuously evaluating the practices of
best-in-class and adapting company processes to
incorporate the best of these practices.
Benchmarking is the search for industry best
practices that lead to superior performance
16Benchmarking Types
- Internal Benchmarking
- Competitive Benchmarking
- Industry Benchmarking
- World-Class Benchmarking
17Benchmarking Advantages
- Prevents "reinventing the wheel.
- Leads to adaptation of proven practices.
- Leads to adaptation of best practices.
- Results in a better understanding of
- internal strengths and weaknesses.
- Make companies more competitive.
- Improves customer satisfaction.
18Benchmarking Process
1. Select and prioritize benchmarking projects.
2. Organize benchmarking teams.
3. Through investigation and documentation of
the companys internal processes and development
of performance indicators.
4. Researching and identifying the best in class.
5. Identifying performance gaps and understanding
the reasons they exist.
6. Implementing and managing the approved
changes.
19Statistical and Quantitative Techniques
Pareto diagrams
Control charts
Cause-and-effect diagrams
20Pareto Diagram
21Pareto Diagram
22Control Charts
Production Line A
? 2? ??? ? ? ???- ? ? - 2?
Defect Rate
Days
23Cause-and-effect Diagrams
24Cause-and-effect Diagrams
Methods and Design Factors
Human Factors
Flawed part design Incorrect manufacturing sequenc
e
Inadequate supervision Poor training New operator
Inadequate tools Incorrect speed Poor maintenance
Multiple suppliers Incorrect specification Variati
on in purchased components
Machine-related Factors
Materials and Components Factors
25Costs of Quality
Cost of achieving good quality
Prevention costs
Appraisal costs
Cost of poor quality
Internal failure costs
External failure costs
26Prevention costs
Costs of trying to prevent poor quality
products from reaching the customer.
- Quality planning costs
- Quality training costs
- Product design costs
- Process design costs
27Appraisal or Inspection costs
Costs incurred to identify defective
products before they are shipped to customers.
- Testing and inspection costs
- Raw material, goods in process, finished
goods. - Test equipment costs
- Operator costs
28Internal failure costs
Costs incurred when poor quality products
are discovered during appraisal process.
- Scrap costs
- Rework costs
- Re-inspection of reworked products
- Downtime costs
29External failure costs
Costs incurred after the customer has
received poor quality product.
- Customer complaint costs
- Product return costs
- Warranty claims costs
- Lost sales costs
30Costs of Quality
Costs
Internal External failure
Total Cost
Total
Prevention Appraisal
Percentage of output without defects
31Quality Cost Report
32Nonfinancial Measures
Nonfinancial measures of customer satisfaction
- Number of customer complaints
- Defective units as a percentage of total units
- shipped to customers
- Percentage of products that experience early
- or excessive failure
33Nonfinancial Measures
Nonfinancial measures of internal performance
- Number of defects for each product line
- Process yield
- (ratio of good output to total output)
- Employee turnover
- (ratio of the number of employees who left
- the company to the total number of employees)
34Evaluating Quality Performance
Financial measures are helpful to
evaluate trade-offs among prevention
costs, appraisal costs, and failure costs.
Nonfinancial measures help focus attention on the
precise problem areas that need improvement and
also serve as indicators of future long-run
performance.