PRINCIPLES OF TOTAL QUALITY
Definitions of Total Quality
Total Quality Practices
Principles of Total Quality
Scope of Total Quality Management (TQM)
Cost of Quality
36.1 DEFINITIONS OF TOTAL QUALITY:
1. According to Crosby:
- Quality is not
only free, it is profit maker
- Increase of 5%
-10% in profitability by concentrating on quality
provides a lot of money for free
2. PandG Total Quality Management (TQM) Definition:
Total Quality is the unyielding and continually improving effort
by everyone is an
organization to understand, meet, and exceed the expectations of
3. A V. Feigenbaum:
As already discussed in lecture 34, A V. Feigenbaum introduced
to quality in 50s by virtue of which, quality of products and
services were influenced by the
As already discussed in the previous lecture, total quality is a
people-focused management system
that aims at continual increase in customer satisfaction at
continually lower real cost. Not a
separate area or program.
- Integral part
of high-level strategy
horizontally across functions and departments
- Involves all
employees, top to bottom
backward and forward to include “supply chain and customer chain”
36.2 TOTAL QUALITY PRACTICES:
It includes the following:
climates of trust and eliminate fear
- Listening and
- Leading and
participating in group meetings
problems with data
goals and resolving conflicts
- Delegating and
continuous improvement a way of life
36.3 PRINCIPLES OF TOTAL QUALITY:
There are three basic principles of total quality. These are as
- Customer Focus
and Team work
improvement (CI) and learning
36.4 SCOPE OF TOTAL QUALITY MANAGEMENT:
The figure 36.1 below depicts the scope of Total Quality
Management (TQM). It is explained in
the ensuing paragraphs.
Total Quality Management (TQM)
management system necessary to function as a high performing
that occurs within a management system to achieve high performance
Tools: A wide variety
of graphical and statistical methods to plan work activities, collect data
analyze results, monitor progress, and solve problems.
Empowerment means that managers must relinquish some of power
that they previously held.
Power shift creates management fears that workers will abuse
Employees have authority and responsibility to make things
happen. No one can be best at
everything. But when all of us combine our talents, we can be
best at virtually anything.
Everyone in organization is “captain of his game”. He thinks of
his work unit as his “own
business”, and perceives that his “work unit” is key part of
“corporate enterprise”. It builds
“confidence in workers” by showing them that company has
confidence in them “to make
decision” on their own. Empowerment can be viewed as vertical
teamwork between managerial
and non-managerial personnel. People can be trusted to make
important decisions about
management of their work activities. When people make decisions
about management of their
work, its result is greater organizational effectiveness.
As a whole participation and empowerment assumes that employees
are willing to improve their
“daily work process” and “relationships”. Employee participation
is essential active,
enthusiastic participation by employees essential to success of
Workers know what goes wrong and where hurdle in their
processes. If given targets and
support they are best to develop creative and effective ideas
for “positive change”.
Problem for many project based organization reduction of
“bureaucratic red tape” “that prevents
employees from seizing the initiative.
36.5.1 Participative Management:
Participative organizations are those that give:
• Rewards to all
employees so that everyone can be involved in organization’s
performance Participative management. It is essential basis for
workforce. Put “everybody's intellect” to work good thinking is
not solely province
of managers. Different points of view can help shape better
Participative management require that “responsibility and
accountability” takes to
lowest possible level empowerment- for three eyes only creation
of “corporate” spirit of
participation required that workforce have information,
involvement and influence.
Participative management does not imply abrogation by management
responsibility it does imply workforce involvement in decision
making process, but
final decision on corporate matters remains responsibility of
When empowered employees become convinced that their duty is to
their “process” not
to their “boss”, wonderful things begin to happen. Teams
shoulder responsibility for
their “process”, and new, more “cooperative style” of work
Empowerment encourages “innovation” because employees have
authority to “try out”
new ideas and make decisions that result in new ways of doing
things. Access to
information when employees are given access to information their
cooperation and to use empowerment is enhanced.
Due to this “Accessibility”, Teams “Manage and Control
Effectively Than under old “Hierarchical Rules and Structure”
where access to info
provided on A Need to Know Basis”.
Employees empowered to make decision, yet also held accountable
Accountability is not to punish person or to generate immediate,
short term results.
Intent is to ensure that empowered employees are:
Giving their best efforts
a) Working toward “agreed-upon goals”
b) Behaving responsibly toward each other
36.5.3 Empowerment – Some Key Principles:
- People are
valuable resource because they have “knowledge and ideas”.
- People want to
- When people
participate, they feel empowered; they think like owners.
- When people
participate, they look for ways to improved opportunities.
- When people
have importance into “corporate and department decisions”, better solutions are developed.
- People should
be treated fairly and with respect.
Organizations should make long term commitment for development
of people because
it makes them valuable to organization. People can develop
knowledge to make
important decision about management of their work activities.
36.5.4 Six Ways of Empowering Employees for Quality Improvement
- Involve employees in developing strategies for continuous
- Provide employees with skills required solving problems and
- Define involvement and empowerment based on mission of
- Establish organizational and individual goals.
- Establish customer-driven performance measurement at
- Involve and empower everyone to focus on continuous
Successful empowerment of employees requires:
procedures should be examined for needless restrictions.
trust should be fostered rather than resentment and punishment for failure.
should be shared “freely” rather than “closely guarded” as “source of control and power”.
should be provided with:
36.6 COST OF QUALITY:
To verify that a product or service meets the customer's
requirements requires the measurement
of the cost of quality. For simplicity's sake, the costs can be
classified as "the cost of
conformance" and "the cost of nonconformance." Conformance costs
include items such as
training, indoctrination, verification, validation, testing,
maintenance, calibration, and audits.
Nonconforming costs include items such as scrap, rework,
warranty repairs, product recalls, and
Trying to save a few project dollars by reducing conformance
costs could prove disastrous. For
example, an American company won a contract as a supplier of
Japanese parts. The initial
contract called for the delivery of 10,000 parts. During
inspection and testing at the customer's
(that is, Japanese) facility, two rejects were discovered. The
Japanese returned all 10,000
components to the American supplier stating that this batch was
not acceptable. In this example,
the nonconformance cost could easily be an order of magnitude
greater than the conformance
cost. The moral is clear:
Feigenbaum divided cost of quality into two categories and four
Failure of Control
- Costs of
- Appraisal cost
- Internal defect
- External defect
Figure 36.2: Cost of Quality
costs are the up-front costs
oriented toward the satisfaction of customer's
requirements with the first and all succeeding units of product
produced without defects.
Included in this are typically such costs as design review,
training, quality planning, surveys
of vendors, suppliers, and subcontractors, process studies, and
related preventive activities.
costs are costs associated
with evaluation of product or process to ascertain how
well all of the requirements of the customer have been met.
Included in this are typically
such costs as inspection of product, lab test, vendor control,
in-process testing, and internal–
external design reviews.
failure costs are those costs
associated with the failure of the processes to make
products acceptable to the customer, before leaving the control
of the organization. Included
in this area are scrap, rework, repair, downtime, defect
evaluation, evaluation of scrap, and
corrective actions for these internal failures.
failure costs are those costs
associated with the determination by the customer
that his requirements have not been satisfied. Included are
customer returns and allowances,
evaluation of customer complaints, inspection at the customer,
and customer visits to
resolve quality complaints and necessary corrective action.
Prevention costs are expected to actually rise as more time is
spent in prevention activities
throughout the organization. As processes improve over the long
run, appraisal costs will go
down as the need to inspect in quality decreases. The biggest
savings will come from the
internal failure areas of rework, scrap, reengineering, redo,
etc. The additional time spent in upfront
design and development will really pay off here. And, finally,
the external costs will also
come down as processes yield first-time quality on a regular
basis. The improvements will
continue to affect the company on a long-term basis in both
improved quality and lower costs.
Also, as project management begins to mature, there should be
further decreases in the cost of
both maintaining quality and developing products.
Prevention costs actually decrease without sacrificing the
purpose of prevention if we can
identify and eliminate the costs associated with waste, such as
waste due to:
- Rejects of
- Design flaws
- Work in
- Excess or
noncontributing management (who still charge time to the project)
utilization of facilities
expenses that do not necessarily contribute to the project (that is, unnecessary meetings, travel, lodgings, etc.)