TQM (Total Quality Management) - Definition, Basic Concepts, Summary

 

Definition of TQM (BS 4778:1991)

“A management philosophy embracing all activities through which the needs and expectations of the CUSTOMER and COMMUNITY, and the objectives of the organization are satisfied in the most efficient and cost effective manner by maximizing the potential of ALL employees in a continuing drive for improvement.”

 

Effect of TQM (Quality Improvement)

Improve Quality (Product/Service)

Increase Productivity (less rejects, faster job)

Lower Costs and Higher Profit

Business Growth, Competitive, Jobs, Investment

TQM Six Basic Concepts

1. Leadership
2. Customer Satisfaction
3. Employee Involvement
4. Continuous Process Improvement
5. Supplier Partnership
6. Performance Measures

(All these present an excellent way to run a business)

Leadership

•        Top management must realize importance of quality

•        Quality is responsibility of everybody, but ultimate responsibility is CEO

•        Involvement and commitment to CQI

•        Quality excellence becomes part of business strategy

•        Lead in the implementation process

Customer Satisfaction

•        Customer is always right – in Japan customer is “King”

•        Customer expectations constantly changing – 10 years ago acceptable, now not any more!

•        Delighting customers (Kano Model)

•        Satisfaction is a function of total experience with organization

•        Need to continually examine the quality systems and practices to be responsive to ever – changing needs, requirements and expectations – Retain and Win new customers

Employee Involvement

•        People – most important resource/asset

•        Quality comes from people

•        Deming – 15% operator errors, 85% management system

•        Project teams – Quality Control Circles (QCC), QIT

•        Education and training – life long, continuous both knowledge and skills

•        Suggestion schemes; Kaizen, 5S teams

•        Motivational programmes, incentive schemes

•        Conducive work culture, right attitude, commitment

Continuous Process Improvement

•        View all work as process – production and business

•        Process – purchasing, design, invoicing, etc.

•        Inputs – PROCESS – outputs

•        Process improvement – increased customer satisfaction

•        Improvement – 5 ways; Reduce resources, Reduce errors, Meet expectations of downstream customers, Make process safer, make process more satisfying to the person doing

Supplier Partnership

1. 40% prod. Cost comes from purchased materials, therefore supplier Quality Management important
2. Substantial portion quality problems from suppliers
3. Need partnership to achieve quality improvement – long-term purchase contract
4. Supplier Management activities
5. Define product/program requirements;

Performance Measures

•        Managing by fact rather than gut feelings

•        Effective management requires measuring

•        Use a baseline, to identify potential projects, to asses results from improvement

•        E.g. Production measures – defects per million, inventory turns, on-time delivery

•        Service – billing errors, sales, activity times

•        Customer Satisfaction

•        Methods for measuring

•        Cost of poor quality

•        Internal failure

•        External failure

•        Prevention costs

•        Appraisal costs

•        Award Models (MBNQA, EFQM, PMQA)

•        Awards criteria

•        Scoring

•        Benchmarking – grade to competitors, or best practice

•        Statistical measures – control charts, Cpk

•        Certifications

•        ISO 9000:2000 Quality Mgt System

•        ISO 14000 Environmental Mgt System,

•        Underwriters Lab (UL), GMP

•        QS 9000, ISO/TS 16949