Total Quality Management

Einstein & Athalia

Structure

I. Introduction II. Reasons to learn about TQMIII. Cost of qualityIV. Total quality management principles V. Tools of TQMVI. Quality process component

Structure (Cont’d)

VII. Barriers to TQMVIII.Benefits of TQM IX. Summary

Introduction:Total Quality Management (TQM) is a

management approach that aims for long-term success by focusing on customer satisfaction. TQM is based on the participation of all members of an organization in improving processes, products, services, and the culture in which they work.

II. Reasons To Learn About TQM (Cont’d)A. Managers need to use their technical

expertise and the quality process to improve product quality and their firm’s productivity

B. Managers need to use their interpersonal skills as a change agent and contest for power in an organization

C. Managers need to understand that Quality is a part of production - it is not apart from production

II. Reasons To Learn About TQM (Cont’d)D. Engineers/Mangers need to be creative in

improving the engineering process, and recognize that “quality” is not features; that is, a Ford-built Lincoln has more features than a Ford-built Taurus, but it does not necessarily have higher quality

E. Engineers/Managers need to think beyond issues of technology, and learn the means whereby people, processes and technology come together

III. Cost of QualityA. Contractors pay a significant price for poor

quality resulting from accidents, waste, rework, inefficiencies, poor subcontractor performance and poor communication - these costs are estimated to be between 5% and 30% of the construction cost of a facility

B. Cost of nonconformance - includes both direct and indirect costs of not doing things right the first time

III. Cost of Quality1. Factors

a) Accidentsb) Omissionsc) Errorsd) Poor workmanshipe) Being late

2.Resultsa) Reworkb) Recallsc) Expediting

III. Cost of Quality (Cont’d)

d) Removal of punch list itemse) Time extensionsf) Litigation costs and damagesg) Penalties and liquidated

damagesh) Increased insurance costs

III. Cost of Quality (Cont’d)C. Cost of Conformance - includes

preventive measures1. Inspection of direct hire work2. Inspection of subcontractor work3. Inspection at vendor source of supply4. Inspection of shipments5. Review of shop drawings

III. Cost of Quality (Cont’d)6. All training costs, including safety7. Facilitator costs8. Salary of quality coordinator9. Meetings of the steering committee

and quality improvement teams10. Administration of the quality

management program11. Reward system

IV. Total Quality Management PrinciplesProvide understanding of and guidance on

the application of TQMA.Customer-Driven Organization

1. Organizations depend on their customers and

therefore should understand current and future

customer needs, meet customer requirements,

and strive to exceed customer expectations

IV. Total Quality Management Principles (Cont’d)

2. It requires 10 times as much money to attract a new customer than it requires to keep a customer you already have......keep the present customer happy

B. Leadership1. Leaders establish unity of purpose, direction, and the

internal environment of organization; they fully involve people in achieving the organization’s objectives

IV. Total Quality Management Principles (Cont’d)

2. The difference between an average and an outstanding company is the leadership they have

C. Involvement of People1. People are the essence of an organization and

their full involvement enables their knowledge and experiences to be used for the organization’s benefit

2. Employees are a company’s greatest asset

IV. Total Quality Management Principles (Cont’d)

3. An individual without information can not take responsibility; an individual with information can and will take responsibility

D. Process Approach - A desired result is achieved more effectively

when related resources and activities are managed as a process

IV. Total Quality Management Principles (Cont’d)

E. System Approach to Management

- Identifying, understanding, and managing a system of interrelated processes for a given objective will contribute to the effectiveness and efficiency of the organization

IV. Total Quality Management Principles (Cont’d)F. Continual Improvement

1. Continual improvement is a permanent objective of the organization

2. In the race for quality, there is no finish line3. Quality comes from within; it comes from the

hearts and the minds of the people

IV. Total Quality Management Principles (Cont’d)G. Factual Approach to Decision Making - Effective

decisions and actions are based on the analysis of data and information

H. Mutually Beneficial Supplier Relationships1. Mutually beneficial relationships are established to

enhance the ability of both organizations to create value

2. Relates to Partnering - Lecture 33

V. Tools of TQM

A. Check Sheet -

1.Tabulates frequency of occurrence2.Easy to use and understand3.Data gathered here can be used in

other tools

V. Tools of TQM (Cont’d)B. Graph

1.Visual display of data2.Major types

a) Line graphb) Bar chartc) Circle diagram (pie chart)

V. Tools of TQM (Cont’d)

C. Histogram -1.Portrays frequency of occurrence2.Shows various measures of central

tendencyD. Pareto Chart -

1.Visually portrays problems and causes in order of severity or frequency

V. Tools of TQM (Cont’d)

2.Helps determine which problems or cause to tackle first

E. Cause-and-effect diagram

1.Portrays possible causes of a process problem

2.Helps determine root cause

V. Tools of TQM (Cont’d)

F. Scatter diagram1.Indicates the relationship between two

variables2.Displays the strength of that relationship

G. Control Chart -

1.Monitors a process to determine magnitude of variation

V. Tools of TQM (Cont’d)2.Estimates the parameters of a process3.Reduces the variability of a process

H. Flowchart

1. Portrays all the steps in a process2. Helps understand the process

VI. Quality Process Component

A. Motivation - based on recognition, commendation,

recommendation, repeat business, rewardB. Communication

- must be team-wide, involving all partners, as well as thorough, honest, and complete

C. Commitment - to the project, to the process, to all the partners,

and to the promised result

VI. Quality Process Component (Cont’d)

D. Expectations - realistic, reasonable, communicated, understood,

and acceptedE. Ability - adequate, understood, and consistentF. Involvement - total, all-party, and consistentG. Feedback

- thorough, understandable, and complete Follow-up - complete and consistent, as well as long

term

VII. Barriers to TQM

A. Lack of trained workers/poorly installed equipment/poor workmanship

B. Competitive marketsC. Poor plans and scheduling

specifications/poorly defined work scopeD. Bad attitudesE. Lack of competent field managers

VIII. Benefits of TQM

A. Better defined project scope and objectives

B. Greater communication of objectivesC. TeamworkD. Effective planning and schedulingE. Appropriate Training

VIII. Benefits of TQM (Cont’d)

F. Improved quality of materials, equipment, and workmanship

Case Studies – Refer to Douglas Electrical Case

IX. Summary

TQM principles Tools of TQM Barriers to TQM Benefits of TQM