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ntrodu tion

efinitionTotal Quality Management TQM is an enhancement to the traditional way of doingbusiness. It is a proven technique to guarantee survival in world-class competition. Onlyby changing the actions of management will the culture and actions of an entire organization be transformed. TQM is for the most part common sense. Analyzing the threewords, we have

Total Made up of the whole.Quality Degree of excellence a product or service provides.Management Act art, or manner of handling, controlling, directing, etc.

Therefore, TQM is the art of managing the whole to achieve excellence. The GoldenRule is a simple but effective way to explain it: Do unto others as you would have themdo unto you.

TQM is defined as both a philosophy and a set of guiding principles that represent thefoundation of a continuously improving organization. It is the application of quantitative methods and human resources to improve all the processes within an organization

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asic pproachTQM requires six basic concepts:

1. A committed and involved management to provide long-term top-to-bottom or-ganizational support.2. An unwaveringQ:ocus on the customer, both internally and externally.3. Effective involvement and utilization of the entire work force.4. Continuous improvement of the business and production process.5. Treating suppliers as partners.6. Establish performance measures for the processes.

These concepts outline an excellent way to run an organization. A brief paragraphon each of them is given here. The next six chapters cover these concepts in greaterdetail.

1. Management must participate in the quality program. quality council must beestablished to develop a clear vision, set long-term ,oals,and direct the program. Quality goals are included in the business plan. An annual quality improvement program isestablished and involves input from the entire work force. Managers participate on quality improvement teams and also act as coaches to other teams. TQM is a continual activity that must be entrenched in the culture-it is not just a one-shot program. TQMmust be communicated to all people.

2. The key to an effective TQM program is its focus on the customer. An excellentplace to start is by satisfying internal customers. We must listen to the voice of the customer and emphasize design quality and defect prevention. Do it right the first time andevery time, for customer satisfaction is the most important consideration.

3. TQM is an organization-wide challenge that is everyone's responsibility. All personnel must be trained in TQM, statistical process control (SPC), and other appropriate

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ing, quality function deployment, ISO 9000, and designed experiments are excellent forproblem solving.

5. On the average 40 of the sales dollar is purchased product or service; therefore,the supplier quality must be outstanding. A partnering relationship rather than an adversarial one must be developed. Both parties ilm eas much to gain or lose based on the success or failure of the proClUctor service. The focus should be on quality and life-cycle costsrather than price. Suppliers should be few in number so that tnTe partnering can occur.

6. Performance measures such as uptime, percent nonconforming, absenteeism, andcustomer satisfaction should be determined for eilc)1 functional area. These measuresshould be posted for everyone to see. Quantitative Mta are necessary to measure the continuous quality improvement activity.

The purpose of TQM is to provide a quality product and/or service to customers,which will, in turn, increase productivity and lower cost. With a higher quality productand lower price, competitive position in the marketplace will be enhanced. This seriesof events will allow the organization to achieve the objectives of profit and growth withgreater ease. In addition, the work force will have job security, which will create a satisfying place to work.

As previously stated, TQM requires a cultural change. Table 1-1 compares the previous state with the TQM state for typical quality elements. This change is substantial andwill not be accomplished in a short period of time. Small organizations will be able tomake the transformation much faster than large organizations.

TABLE 1-1ew and Old ulturesQuality lement revious Stateroduct-orientedecond to service and cost

s

Short-termis

Detectionperationsibility

Quality controlSolving

Managersent

Prices Role

Plan assign controland enforceT

Customer-orientedFirst among equals of

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zo CHAPTER 1quality. Thus it is somewhat of an intangible based on perception. Quality can be quantified as follows:

Q PIEwhere Q = quality

P = perfonnanceE = expectations

If Q is greater than 1.0 then the customer has a good feelli..; about the product or service.Of course the determination of P and E will most likely be based on perception with theorganization determining perfonnance and the customer detennining expectations.

A more definitive definition of quality is given in ISO 9000: 2000. It is defined asthe degree to which a set of inherent characteristics fulfills requirements. Degree meansthat quality can be used with adjectives such as poor good and excellent. Inherent isdefined as existing in something especially as a pennanent characteristic. harac-teristics can be quantitative or qualitative. Requirement is a need or expectation that isstated; generally implied by the organization its customers and other interested parties;or obligatory.

Quality has nine different dimensions. Table 1-3 shows these nine dimensions ofquality with their meanings and explanations in tenns of a slide projector.

These ~mensions are somewhat independent; therefore a product can be excellentin one dimension and average or poor ill another. Very few if any products excel in allnine dimensions. For example the Japanese were cited for high-quality cars in the 1970s

JA1 .LE1-3 Dlmens ons of Q amy

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CHAPTER 1=In the late 1980s the l1utDmDtiveindustry began t emphasize statistical process CDn

trDI(SPC). Suppliers ~.ndtheir suppliers were required t use these techniques. Other industries and the Department ofDefense alSDimplemented SPC. The MalcDlm BaldrigeNatiDnal Quality Award was established and became the means tD measure TQM.Genechi Taguchi introduced his concepts ofparameter and tDlerance design and brDughtabDut a resurgence ofdesign ofexperiments (DOE) as a valuable quality improvementt IEmphasis on quality cDntinued in the autD industry in the 1990s when the Saturn au

. tDmobile ranked fIrst in customer satisfactiDn (1996). In additiDn, ISO 9000 became thewDridwide model fDr a quality management system ..ISO 14000 was approved as theworldwid~ mudel fDrenvirDnmental management systems.The new millenium brought about increased emphasis .onwDridwide quality and theInternet.

ObStacles---Implementation of TQM is described in the next chapter, .on leadership. This sectiDngives infonnation cDncerning the Db~acles associated with implementatiDn.Many DrganizatiDns, especially small .ones with a niche, are cDmfDrtable with their

current state. They are satisfIed with the amDunt ofwDrkbeing perfonned, the prDfIts realized, and the perceptiDn that the custDmers are satisfIed. Organizations with this culture will see little need fDrTQM until they begin t lDsemarket share.Once an organizatiDn embarks .onTQM, there will be .obstacles to its successful im

plementation. The fIrst eight most CDmmonwere determined by RDbert J. Masters aftecan extensive literature search and the last obstacle added by the authDrs.2 They are given

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INTRO U TION Z::.

Inability to hange Organizational ultureChanging an organization's culture is difficult and will require as much as five years. Individuals resist change-they become accustemed to doing a particular process and itoecomes the preferred way.Management'must understand and utilize the basic conceptsof change. They are: ~~1

I. ,People change when they want to and to meettheir own needs./'2. Never expect anyone to engage in behavior that serves the organization's values,.;

unless adequate reason (why) has been given.3. For change to be accepted, people must be moved from a state of fear to trust. c

It is difficult for individuals to change their way of doing things; it is much more difficult for an organization to make a~tIltural ch~e.Management by exhortation and inspiration wilrfail. Speches, slogans, and campaigns that are supposed to moti \fate people are only effective for a short period of time.Impediments to a cultural change are the lack of effective communication and emphasison short-term results. Organizations that spend more time planning for the cultural aspects of implementing a TQM program will improve their chances of success.4

Improper Planning~f the organization must be involved in the development of the implementation plan and any modifications that occur as' the plan evolves. Of particularimportance isihe two-way comniunication of ideas l>yall personnel during th~ development of the plan and its implementation. Customer satisfaction should be the goalrather than' financial, or sales goals. Peterson Products, a' metal stamping firm near

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CH PTER

Incompatible Organizational Structure and IsolatedIndividuals and DepartmentsDifferenc.es between departments and individuals can create implementation problems.The use of multifunctional teams will help to break down long-standing barriers./Restrn9.rnring to make the organization more responsive to customer needs may

~eeded. Individuals who do not embrace the new philosophy can be required toleave the orga~zation. Adherence to the six basic concepts will minimize the problems over time.At Spartan Light Metal Products, Inc. in Sparta, IL, product support teams COl lposedof three members from design, quality, and production are assigned to each customersegment.

Ineffective Measurement Techniques and Lack of ccessto Data and Results

/Key characteristics of the organization should be measured so that effective decisionsC~; In order to improve a process you need to measure the effector improvement ideas. Acce \Sto data and quick retrieval is necessary for effective processes.

Peoples Bank of Bridgeport, CT found that extra inspection, training, and management encouragement did not help a high error rate. Finally the bank investigated the rootcauses of the problem and corrected them, which virtually elirninatedthe problem.Paying Inadequate ttention to Internal and External CustomersOrganizations need to understand the changing needs and expectations of their customers. Effective feedback mecha..isms that provide data for decisionmakiQg are nec

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INTRODUCTION

into work teams and delegating authority to the point of customer contact or to the workperformed.

Failure to Continually ImproveIt is tempting to sit back and rest on your laurels. However, a lack of continuous im-.provement of the processes, product, and/or service will even leave the leader of thepack in the dust Will Rogers said itbest, Even if you're on the right track, you'll getrun over if you just sit there. Even though Qlampion Mortgage's 1998 business volumeincreased 59 , it continues to address culture>,:>taff,and service issues.6

Benefits TQMAccording to a survey ofmanufacturing firms inGeorgia, the benefits ofTQM are improvl:dquality, employee participation, teamwork, working relationships, customer satisfaction.employee satisfaction, productivity, communication, profitability, and market share.?

TQM is a good investment as shown by a ten-year study by Hendricks andSinghai.They showed that there is a strong link between TQM and [mandal performance. Th(:researchers selected a group of 600 publicly traded organizations that had won awards foreffectively implementing TQM. They then selc;x:~eda control group similar in size and.industry to the award winners. Performance of both groups was compared during the fiveyears prior to the award and five years after winning the award. No difference was shownbetween the two groups prior to the award. However, as shown below the award groupfar outstripped the control group during the five-year period after the award.

ward

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CH PTER

TQM xemplary OrganizationEmploying 99,000 workers at 53 major facilities worldwide and baSed in Schaumburg,illinois, Motorola is an integrated company that produces an array of electronic products, distributing most through direct sales and service operations. Products include two.way radios and pagers; wireless telephones; semiconductors; and equipment for defenseand aerospace applications, data communications, information processing, and automotive and industrial uses:

In 1981, Motorola launched an ambitious drive for a tenfold improvement in thequality of its products and services. They succeeded, and now many of its products arethe best in their class. The company's quality goal is simply stated: Zero defects ineverything we do. Motorola's managers literally carry with them the corporate objective of total customer satisfaction -it's on a printed card in their pockets. Corporateofficials and business managers wear pagers to make themselves available to customers, and they regularly visit customers' businesses to find out their likes and dislikesabout Motorola products and services. The information, along with data gatheredthrough an extensive network of customer surveys, complaint hotlines, field audits, andother customer feedbllck measures, guides planning for quality improvement and product development. Pagers supplied to Nippon Telegraph and Telephone is a major shareof that market.

Key initiatives are six-sigma quality and reducing total cycle time. Six sigma is astatistical measure that translates into a target of no more than 3.4 defects per millionproducts and includes customer service. Motorola's cycle-time reduction is even moreambitious; the clock starts ticking the moment the product is conceived. This calls foran examination of the total system, ~~ 9~tn.E.i1esign, manufacturing, marketing, andadministration.

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INTRODUCTION

1. Describe how the golden rule does or does not influence each of the six conceptsofTQM.2. Of the six basic TQM concepts, which were the most effective in World War II? .

Explain.3. Which of the gurus would be the father of quality control? Which had the great

est impact on management? Which is noted fot robust design?4. Select a product or service and describe how the dimensions of quality influence

its acceptance.5. Working as an individual or in a team of three or more people, determine two or

more obstacles to implementing TQM in one or more of the organizations listedbelow:a Large bankb Health-care facilityc University academic departmentd University nonacademic departmente Large department storef Grade schoolg Manufacturing facilityh Large grocery store