tqm

Definitions

Quality terms

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Introduction

• What is TQM?A comprehensive, organization-wide effort to improve the

quality of products and services; applicable to all organizations.

• What is quality?Dictionary has many definitions: “Essential characteristic,”

“Superior,” etc.Some definitions that have gained wide acceptance in various

organizations: “Quality is customer satisfaction,” “Quality is Fitness for Use.”

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Introduction

• The American National Standards Institute (ANSI) and the American Society for Quality (ASQ) define quality as:

“The totality of features and characteristics of a product or service that bears on its ability to satisfy given needs.”

Introduction

• Definition from the ISO 9000: 2008 standards

The degree to which a set of inherent characteristics fulfill requirements.

Degree means that quality can be used with an adjectives such as poor, good and excellent.

Characteristics can be qualitative or quantitative.

Requirement is a need or expectation that is stated, generally implied by the organization, its customers, and other stakeholders; or it may be obligatory.

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Introduction

• What is a customer?Anyone who is impacted by the product or process delivered by

an organization. External customer: The end user as well as intermediate

processors. Other external customers may not be purchasers but may have some connection with the product.

Internal customer: Other divisions of the company that receive the processed product.

• What is a product?The output of the process carried out by the organization. It may

be goods (e.g. automobiles, missile), software (e.g. a computer code, a report) or service (e.g. banking, insurance)

Discussion question

• Students in an educational institute –

Are they internal customers or external customers?

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Introduction

• How is customer satisfaction achieved?Two basic dimensions: Product features and Freedom from

deficiencies.One additional component: Performance• Product features – Refers to quality of design.Examples in manufacturing industry: Performance, Reliability,

Durability, Ease of use, Esthetics etc.Examples in service industry: Accuracy, Timeliness, Friendliness

and courtesy, Knowledge of server etc.Quality of design studies begins with consumer research, service

call analysis, sales call analysis and leads to determination of a product concept that meets customers needs.

Introduction

• Freedom from deficiencies – Refers to quality of conformance.Quality of conformance is the extent to which a firm and its

suppliers can produce products with a predictable degree of uniformity and dependability.

Once the nominal value and specification limits are determined via a quality of design study, the organization must continuously strive to not only meet but surpass those specifications.

Higher conformance means fewer complaints and increased customer satisfaction.

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Introduction

• Higher performance – Refers to quality of performance.

Quality of performance focus on determining how the quality characteristics indentified in the quality of design studies and improved and innovated in quality of conformance studies, are performing in the marketplace.

Major tools of quality of performance studies are consumer research, sales call analysis, maintenance, reliability and logistics support and to determine why consumers do not purchase the company’s products.

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Introduction

Relationship between quality and cost

• Consumers can be grouped into market segments once the product characteristics (features) they desire are known and defined.

• Features and price determine whether a consumer will initially enter a market segment – hence features and prices determine the market size.

• After the initial purchase, consumer’s decisions to extol a product or purchase it again are based on their experience with the product – that is, product’s uniformity and dependability.

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Introduction

Relationship between quality and cost

• Uniformity and dependability, thus, determine a product’s success, and so, its market share, within the market segment.

• So features, dependability and uniformity and price are the most important parameters on which customer judges the organization.

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Why Quality?

Reasons for quality becoming a cardinal priority for most organizations:

• Competition – Today’s market demand high quality products at low cost. Having `high quality’ reputation is not enough! Internal cost of maintaining the reputation should be less.

• Changing customer – The new customer is not only commanding priority based on volume but is more demanding about the “quality system.”

• Changing product mix – The shift from low volume, high price to high volume, low price have resulted in a need to reduce the internal cost of poor quality.

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Why Quality?

• Product complexity – As systems have become more complex, the reliability requirements for suppliers of components have become more stringent.

• Higher levels of customer satisfaction – Higher customers expectations are getting spawned by increasing competition.

• Quality improves productivity – If we want to increase profit, why not raise productivity?

Relatively simpler approaches to quality viz. product inspection for quality control and incorporation of internal cost of poor quality into the selling price, might not work for today’s complex market environment.

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Quality perspectives

Everyone defines Quality based on their own perspective of it. Typical responses about the definition of quality would include:

1. Perfection2. Consistency3. Eliminating waste4. Speed of delivery5. Compliance with policies and procedures6. Doing it right the first time7. Delighting or pleasing customers8. Total customer satisfaction and service

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Judgmental perspective• “goodness of a product.”• Shewhart’s transcendental definition of quality – “absolute

and universally recognizable, a mark of uncompromising standards and high achievement.”

• Examples of products attributing to this image: Rolex watches, Lexus cars.

Product-based perspective• “function of a specific, measurable variable and that

differences in quality reflect differences in quantity of some product attributes.”

• Example: Quality and price perceived relationship.

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User-based perspective• “fitness for intended use.”• Individuals have different needs and wants, and hence

different quality standards.• Example – Nissan offering ‘dud’ models in US markets under

the brand name Datson which the US customer didn’t prefer.Value-based perspective• “quality product is the one that is as useful as competing

products and is sold at a lesser price.”• US auto market – Incentives offered by the Big Three are

perceived to be compensation for lower quality.

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Manufacturing-based perspective

• “the desirable outcome of a engineering and manufacturing practice, or conformance to specification.”

• Engineering specifications are the key!

• Example: Coca-cola – “quality is about manufacturing a product that people can depend on every time they reach for it.”

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In-class exercise

Look at the handouts on various consumer advertisements and comment.

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Quality levels

At organizational level, we need to ask following questions:• Which products and services meet your expectations?• Which products and services you need that you are not

currently receiving?

At process level, we need to ask:• What products and services are most important to the

customer?• What processes produce those products and services?• What are the key inputs to those processes?• Which processes have most significant effects on the

organization’s performance standards?

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Quality levels

At the individual job level, we should ask:

• What is required by the customer?

• How can the requirements be measured?

• What is the specific standard for each measure?

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Designing for Quality

• Quality is a virtue of design.

• Consumer satisfaction results from –

1. Quality in design.

2. Quality of conformance to design.

• Quality design begins with minimizing loss.

• Taguchi defines quality as the loss imparted to society once a product is delivered.

• The aim of good design is to minimize loss once the customer takes delivery of the product.

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Quality theft according to Taguchi:“Manufacturers sometime try and maintain price levels by

surreptitiously reducing the product specifications. If the thief steals 10,000 yen, the victim losses 10,000 yen so

there is neither gain nor loss to the whole society. But when, say, the mid value is reduced, the manufacturer

imparts a larger loss, say a 20,000 yen loss to a customer in order to make a 10,000 yen profit.”

Example – Reducing the thickness of the armor plating on a battleship by 0.01 mm may save the manufacturer thousands of rupees; for the cost of the lives of crew, and the ship itself?

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Attributes of a good design

• A good design reflects an optimal trade-off between cost and performance. A good design is the one which is:

1. Cheap;2. Operates well over a large range;3. Is compatible with related products.

• Simplification makes the product cheap because then the product requires fewer suppliers, less administration and fewer supplier-related problems. It reduces production time and increases robustness.

• Robust products are easier to manufacture.

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• Signal-to-noise ratio – quality of design may be measured as the S/N ratio.

Signal is what the product or a sub-component is intended to deliver. Noise is what impairs delivery.

Robustness is defined as a product feature of high S/N ratio.

• Speeding up the design process – understand that some processes can be speeded whereas some simply can’t.

Design process has two phase – Concept design and R&D (for new material, processes etc.)

Which of the phases can be speeded up?

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• Typically, R&D time can be reduced by concurrent planning (product and process specifications can be developed simultaneously).

• Aim for `loose tolerances tightly enforced,’ rather than `tight tolerances loosely enforced.’

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