Total Quality Management MBA Notes
Introduction
Leadership
Customer Satisfaction

Introduction to Quality and Total Quality Management (TQM)

Quality is a very subjective thing. Sometimes it is easily visible, sometimes you require an expert to tell the difference.

This chapter contains following topics:

Definitions & Dimensions

Planning

Quality Costs

TQM History

Barriers to TQM Implementation

There are various definitions of quality given by various authorities organizations. Every definition gives a unique perspective about quality.

ISO 9000: "Degree to which a set of inherent characteristics fulfills requirements." The standard defines requirement as need or expectation”.

Six Sigma: "Number of defects per million opportunities."

Philip B. Crosby: "Conformance to requirements." The requirements may not fully represent customer expectations; Crosby treats this as a separate problem.

These definitions talk about quality meeting pre-set criteria. It is all about conforming to known requirements.

Following definitions talk about consumer’s perspective. And a consumer’s top priority is always to get some functionality from the product.

Joseph M. Juran: "Fitness for use." Fitness is defined by the customer. Noriaki Kano and others, present a two-dimensional model of quality: "must-be quality" and "attract Definitions

Robert Pirsig: "The result of care."

Genichi Taguchi:

a. "Uniformity around a target value."

b. "The loss a product imposes on society after it is shipped."

Taguchi talks about lack of variations against set parameters. As attaining 100% perfection is impossible in real life situations, so Taguchi talks about getting as closer to perfection as possible. Moreover, Taguchi harps on the issue of cost to the society in the long run if there is bad quality in a product or service.

Let us take an example of a spurious quality electric iron. The iron may lead to spoiling the cloth, higher electricity bill, and even electric shock.

American Society for Quality: "A subjective term for which each person has his or her own definition. In technical usage, quality can have two meanings:

a. The characteristics of a product or service that bear on its ability to satisfy stated or implied needs;

b. A product or service free of deficiencies."

The definition by American Society talks about subjectivity of quality. For a rural person traveling in a rickety bus can mean comfort, while for the jet-set people an AC taxi will give the bare minimum comfort. Quality of a product or service refers to the perception of the degree to which the product or service meets the customer's expectations. Quality has no specific meaning unless related to a specific function and/or object. Quality is a perceptual, conditional and somewhat subjective attribute. In totality quality means conformance to pre-set criteria as well as ability to satisfy the end user. If a pen is unable to write then the diamond studded on it is of no use.

Dimensions of Quality Performance:

  • Basic Functional Aspect
  • Features: Can’t give core benefit
  • Aesthetics: Look, finish, etc.
  • Reliability: Lineage
  • Durability: Optimum life span
  • Serviceability: Ease of getting serviced
  • Safety: Air Bags
  • User-friendliness: Windows Vs Linux Customizability: Lens attachment Nikon
  • Environmental-friendliness: Less pollution from CFC free refrigerators.
  • The top most dimension of quality is the functionality of a product. For example a mixer grinder should be able to grind the hard turmeric, otherwise three speed gear box is of no use to the end user. Features are like add on benefits, like fancy attachments provided with the mixer grinder. A pleasant look will always add value to the product. If the mixer is from USHA or PHILIPS then it will help the customer in buying decision. Take the example of Maruti service centre advt which talks about the possibility of finding one in the remotest corner of India. This is about reliability and serviceability. The product should be safe and can be handled with kid’s gloves. Popularity of Windows over other operating systems is a good example of user friendliness winning over customers. Apple i-Pod has options of changing skin which is ideal for the target group shows the power of customizability in winning over customers.

    Quality Planning

    1. Set quality objectives and targets

    2. Take into account customer’s wants

    3. Plan about marketability of the products.

    4. Carry out pre-production process capability or quality deliverability studies.

    5. Establish the relative importance of the quality characteristics and specifications.

    6. Communicate to the production line people and vendors supplying the raw materials.

    7. Establish statistical control techniques, charts and sampling plans.

    8. Establish training programmes.

    Planning for quality starts with setting quantifiable and measurable targets. While doing this the organization needs to keep customer’s wants in mind. Once the quality objective is decided it is important to think about the market feasibility of the product. TATA Nano can prove if Ratan Tata was wrong or right when he planned for the people’s car of India. Once everything is planned the organization needs to asses its capability to deliver the target quality. If there is gap in capability then the organization needs to fill that gap by upgrading to the required technology and skill sets.

    Before planning for Chandrayan ISRO must have thought about its capabilities to build and deliver such a spacecraft. A ranking chart should be developed to finalize the most important aspect of quality planning and more focus should be given to that aspect. Communicating the target and plan to frontline people is important because they are the people who will implement everything in the real life situation. They should be properly convinced before starting the new course. Plan to monitor the progress of quality programme is important. This can be done by devising ways and means to monitor progress and finding and correcting deviations.

    Costs of Quality: “Maintaining the quality at least possible cost.” The ultimate goal of an organization is to earn profits. So keeping the cost at minimum possible level is important. Otherwise the higher input cost may not permit the ultimate aim of the organization.

    Cost of quality involves following aspects:

  • 1. Cost of Appraisal
  • 2. Cost of Prevention
  • 3. Cost of Failure
  • Costs of Appraisal: Inspection, Testing, Monitoring Control This is about assessing the current situation. This will involve man-hour and resources.

    Costs of Prevention: Prevention requires man-hour as personnel need to be deployed to inspect the raw material and finished goods. As per an old saying prevention is always better than cure, so the organization should strive to prevent bad quality product from going down the supply chain.

    Costs of Failure: Cost of failure needs to be planned out in advance as no matter how much precautions are taken failures are part of life.

    Analysis of Costs of Quality

    Category to category comparison: Comparing the relative amounts spent on each of the above mentioned cost categories.

    Time to time comparison: Comparing one quarter’s operations with the previous quarter’s operations. The comparative analysis of cost of quality can give an idea about where to focus more to improve further.

    Total Quality Management Objective:

  • 1. Total customer satisfaction
  • 2. Totality of functions
  • 3. Total range of products and services
  • 4. Addressing all aspects of dimensions of quality
  • 5. Addressing the quality aspect in everything – products, services, processes, people, resources and interactions.
  • 6. Satisfying all customers – internal as well as external
  • 7. Addressing the total organizational issue of retaining customers and
  • 8. Improving profits, as well as generating new business for the future.
  • 9. Involving everyone in the organization in the attainment of the said objective.
  • 10. Demanding total commitment from all in the organization towards the achievement of the objective.
  • Total means 100%, so TQM is about managing all aspects of quality and ultimate goal should be the ‘Total Customer Satisfaction’. Every functional area should stick to the quality plan of the organization and strive to attain the planned quality target. Each offering from the organization should be of optimum quality. Because, “one rotten apple can spoil the whole basket.”

    TQM is about addressing all aspects of dimensions of quality. If there is a good product in bad packaging it is not going to give the desired returns to the organization. A good car with a bad bumper will tarnish the image of the company. An ill tempered receptionist can turn away potential customers from a nice 5-star hotel. So people and process should match the quality of the product being offered by the organization. A satisfied employee will always bring a satisfied customer, so internal customers are also important. All hygiene factors and motivation factors should be maintained to satisfy the needs of the internal customer. Retaining internal customer is important for better knowledge management and continuity of the process. Retaining external customer is important to get repeat sales. It is always easier to get repeat sales from existing customers than to get sales from a new customer. Everybody, right from the shop-floor employee to the top management, should have total commitment to the predetermined quality goals.

    History of TQM

    Effect of Industrialisation on workmanship

  • W.A. Shewart (1924) Statistical charts for Bell Tele
  • H. F. Dodge & H.G. Roming: Acceptance sampling as a substitute for 100% inspection in Bell.
  • 1946 American Society for Quality Control formed later changed to American Society for Quality
  • 1960s Japanese management started quality control circles.
  • Think about quality concept which a road side trinket seller may be having. Think about the quality concept your neighbourhood barber may be having. Let us assume there are two haircut salons. One is a roadside one which uses the nearby tree to hang the mirror and gets its own set of customer. Another is a swanky air-conditioned one, which charges premium on every service. Both kinds have their own niches but having a big difference in quality. Think about the quality concept which the nearby Domino’s may be having. One can get every bit of history of quality in a wonderful country like India.

    Barriers to TQM Implementation
  • 1. Lack of Management Commitment
  • 2. Inability to Change Culture
  • 3. Improper Planning
  • 4. Lack of Continuous Training
  • 5. Incompatible Organizational Structure
  • 6. Isolated Individuals and departments
  • 7. Ineffective Measurement Techniques
  • 8. Lack of Access to Data
  • 9. Inadequate Attention to External & Internal Customers
  • 10. Inadequate Empowerment and Teamwork
  • 11. Failure to Continually Improve
  • If the top management takes quality as a form of window dressing then the organization is not going to attain the desired goal. Companies which maintain quality only during the time of inspection by ISO personnel can’t achieve quality goals. It is difficult but important to change the culture of the organization. Paradigm change is needed to force people to strive for the new quality goal. The way Jack Welch managed change in GE is a very good example of people involvement in change management. As quality is a continuous and never ending process, so is the training. Even the whole lifetime is not enough for complete learning. So training should go on forever. This is important because customer’s preferences keep on changing. SONY can be a good example of an organization keeping pace with customer’s preference change. SONY tape-recorder made the gramophone an obsolete product. Later on WALKMAN changed the way for portable music. At present even WALKMAN is an obsolete product and SONY sells MP3 players by the same brand name. People should not live in silos. They should come out to facilitate better interactions to share knowledge. People should be empowered to sort out issues. This will reduce the throughput time. Obviously accountability is important along with empowerment. If a frontline personnel is empowered to sort out customer’s problems then it will save precious time of the top management.

    SUMMARY: Quality is having different meanings for different people. In spite of this any organization aiming for sustainable competitive advantage needs to assess customer’s needs to fix a quality objective. Immaculate planning is required to attain the pre decided quality goals. Proper monitoring and people’s involvement can ultimately enable an organization to achieve the desired results. In the long run the good quality always wins the customer’s heart.

     
     
       
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