HIPAL University

Higher Institute of Petroleum & Logistics

TOPIC 1 Introduction
LEARNING OUTCOMES

 Explain the different meanings of the quality concept and its influence.
 Describe, distinguish, and use the several techniques and quality management
tools.
 Explain and distinguish the normalization, homologation, and certification
activities.
 Identify the elements that are part of the quality measuring process in the industry.
 Predict the errors in the measuring process, distinguishing its nature and the root
causes.
 Justify whether or not a measuring process fulfils the established quality
requirements.
 Understand and calculate the correction and uncertainty parameters as a result of
aninstrument calibration.
 Explain the regulation and the phases of a quality system certification process.

The goal of Supply chain management (SCM) is to implementdecisions that results in

optimalperformance of an organization. Supply chains can exist in bothmanufacturing and
service organizations. They are principally concerned with theflow of products and information
betweenthe organizations in the supply chainnetwork, the procurement of
materials,transformation of materials into finishedproducts, and distribution of
thoseproductsto the end customers. Today ‘s informationdriven,integrated supply chains are
enablingorganizations to reduce inventory and costs,add product value, extend
resources,accelerate time to market, and retaincustomers.
In the last few years,organizations that are supply chaininnovators have migrated from
buildingexcellence in its supply chain to making useof the supply chain to create added-
value.
Values can be in the form of new productideas, innovative processes, marketexpansion, new
ways of serving customers,and new solutions for businesses. Inaddition, the availability of
real-timeinformation and real-time data processingtools such as radio frequency identification
(RFID), GPS, flow control sensors, cellulartelephones, navigation systems, and
satellitepositioning systems has raised newmanagement opportunities and challengesfor
organizations. Automatic decisiontechnology is available that automates,connects, and
manages information flows andtransactions for specific functions in supplychain optimization.
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Definition of Quality/supply chain management

Quality -refers to “performance as expected by the customer (Fred Smith, the CEO of FEDERAL
EXPRESS” in the US) or quality could alternatively be defined as “meeting the customers’ needs
the first time, and every other time (General Services Administration - GSA).
Supply Chain Management refers to ―the integration of key business processes from end-
users through original suppliers that provide products, services, and information and add
value for customers and other stakeholders‖ (Cooper et al., 1997b, p. 2).
It is the management of the flow of products and services, which includes raw material
movement and storage, work –in-progress, inventory, and finished goods movement from point
of origin to point of consumption.
Definition by council of Logistics Management, USA - SCM encompasses the planning and
management of all activities involved in sourcing and procurement, conversion, and all
logistics management activities. It also includes coordination and collaboration with channel
partners, intermediaries, third party service providers and customers. In essence SM integrates
supply and demand management within and across companies.

Dimensions of Quality
The development of SCM concept is a consequence of a long-standing and ongoing
development, taking place in the management of material flows and the transformation
process itself (let us call it operations further on in the paper). The development in this field
aims to leverage strategic positioning over competitors mainly through improved operational
efficiency. We believe that supply chain can be seen as a given structure of collaborating
companies working together in satisfying customer demand, and SCM is a conscious
development and guidance of these relationships in order to gain competitive advantage for
the collaborating chainmembers over other industry players.

When collecting the most important dimensions of a successful SCM, inevitably the first is the
increasing strategic role and, in parallel, the increasing strategic orientation of operations. The
final goal is to increase the competitiveness of companies and make operations to be able to
contribute to the execution of firms’ strategies. This can be accomplished through various
programs and techniques, which appear within the company (e.g., ERP, new organizational
forms) and along the supply chain both on the supplier side (e.g., vendor-managed inventories)
and on the distribution side (e.g., efficient customer response, quick response, e-commerce or
DRP). Although these programs and techniques can be very different, they all recognize that
operational efficiency is directly affected by uncertainties originated from
(1) the uncertain demand that materials management faces and
(2) the material flows that take place in the chain when satisfying this demand.
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Uncertainties stemming from the demand side are strongly connected with the traditional
anticipatory business practice and can be reduced by response-based operation. Response
based business operation builds on accurate and timely deployment of concrete consumer
demand data instead of traditional sales forecasts. The deployment process mainly can be
supported by closer coordination and integration within the firm and between collaborating
companies. Among the different coordination means we think that the development of the
planning and the strongly connected with it the development of information sharing processes
has outstanding importance.

The second type of uncertainties originates from the materials processes, from the uncertainty
of lead times.Reducing this increases the accuracy and the reliability of value creating
business processes and consequently raises both their effectiveness and efficiency. Improving
the performance of business processes (shorter lead time) and their accuracy more reliable lead
time) necessitate a systematic approach focusing more on how to develop and connect
business processes. Better performing business processes lead to a better fit between the
actual demand and the number of products inventoried and streamed along the logistics
pipeline. The process view is one of the basic characteristics of today’s operations
management.

Finally, a fourth important element of successful SCM is the type of relations between
collaborating partners. This determines the way companies cooperate with each other within a
given chain. The changes taking place during the last two decades in partner relationships show
a continuous advance between collaborating firms, with an increase in building long term
relationships. The increased dedication to build long term partner relationships goes together
with the increasing level of relation specific investments. Bensaou points out that the level of
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relation specific investment made by either partner significantly correlates with practices
commonly associated with strategic partnership.

The Value Chain

Value chain activities can be categorized into two types – primary activities (inbound
logistics operations, outbound logistics, marketing and sales, and services) and support
activities (infrastructure, human resource management, technology development and
procurement). These activities are integrating functions that cut across the traditional
functions of the firm. Competitive advantage is derived from the way in which firms organise
and perform these activities within the value chain. To gain competitive advantage over its
rivals, a firm must deliver value to its customers by performing these activities more
efficiently than its competitors or by performing the activities in a unique way that creates
greater differentiation.

Business Processes
Typically, a supply chain is composed of two main business processes:
 Material management (inbound logistics)
 Physical distribution (outbound logistics)
Material management is concerned with the acquisition and storage of raw materials, parts,
and supplies. Material management supports the complete cycle of material flow—from the
purchase and internal control of production materials to the planning and control of work-in-
progress, to the warehousing, shipping, and distribution of finished products. On the other
hand, physical distribution encompasses all outbound logistics activities related to providing
customer service. These activities include order receipt and processing, inventory deployment,
storage and handling, outbound transportation, consolidation, pricing, promotional support,
returned product handling, and life-cycle support. Combining the activities of material
management and physical distribution, a supply chain does not merely represent a linear chain
of one-on-one business relationships, but a web of multiple business networks and
relationships. Along a supply chain, there may be multiple stakeholders, composed of various
suppliers, manufacturers, distributors, third-party logistics providers, retailers, and customers.
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The supply chain network enhances the value of a product by

 Form utility – the raw materials are converted to finished products

 Time utility – the members in the supply chain save time as the products can be ordered
for andit is made available with the least efforts.
 Place utility – products and services are physically made available to the potential
customers.
 Possession utility – the supply chain enables the potential customers to take possession
of the goods.

Quality Planning (QP)

A detailed supply chain planning mechanism can help manufacturers with critical elements for
operational success including material management, waste elimination, and working capital
optimization.

Supply chain planning is the process of accurately planning the journey of a material or a product right
from the raw material stage to the final consumer. This includes multiple processes such as supply
planning, demand planning, production planning, distribution planning, operations, and sales planning.

Research shows that 79% of organizations with high-performing supply chains achieve greater revenue
growth compared to the industry average. In addition, companies with optimal supply chains benefit
with 15% lower supply chain costs, less than 50% of inventory holdings and 3x faster cash-to-cash cycles.
It is evident that a well-orchestrated supply chain mechanism starts with an efficient supply chain
planning process.

Why do manufacturers need an effective supply chain plan?

Today, manufacturers are under constant pressure to reduce costs, improve supply chain efficiency, and
enhance revenue margins. With a lack of clear visibility into their supply chains due to manual reactive
operational approaches and poor planning tools, they miss the much-needed deep insights. This keeps
them from creating smooth, synchronized, and responsive supply chain plans to achieve the desired
operational excellence.

 Are demand and supply forecast numbers accurately updated and shared across all the functions
across relevant department heads and key stakeholders?
 Are the inventory numbers being tracked accurately across the several stages of production?
 What is the alternative plan when uncontrollable factors like natural disasters or worker issues
affect the existing supply chain?
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Supply chain planning within a manufacturing facility lays the basic groundwork for all operations
activities both inside and outside of the facility. This includes multi-plant operations that require the
necessary planning for synchronization of disparate production plans.

In the absence of a well-designed supply chain plan for production, manufacturers may lack proper
foresight and the essential coverage needed for all of the potential “what-ifs” that are capable of
occurring. A proper supply chain plan can provide further contingency sub-plans which can help firefight
common points of failure. This includes machinery breakdowns, personnel absenteeism, material
shortage, weather irregularities, unforeseen operational bottlenecks, etc. which can disrupt the apple
cart for the entire batch of production output.

The process involved in supply chain planning

Supply chain planning itself involves multiple steps to achieve optimal manufacturing goals. The process
involved is as follows:

SUPPLY MANAGEMENT
The first step in supply chain planning is to manage the actual supply of goods or services.
Key questions answered with this:
 How best can an organization create a fine balance between the inflow or supply of goods and
the actual requirement or demand for these goods?
 How can it ensure that it is able to meet its set financial objectives?
 How can it facilitate the best possible manner in which the requirements can be met from the
demand plan created?

DEMAND MANAGEMENT
The next step is demand management which is the process of forecasting or predicting the future
demand to ensure goods and services can be accurately delivered based on the needs.
Key questions answered with this:
 How can an accurate demand forecast help manufacturers directly obtain accurate revenue
calculations?
 How can it help match appropriate inventory stocks based on demand trends?
 How can it help improve the overall bottom line for a particular line of product or service?

PRODUCTION PLANNING
The next step is production planning which relates to the actual production and manufacturing
processes and their dynamics.
Key questions answered with this:
 How can the critical aspect of production capacity planning help determine the real on-ground
operations on the factory floor?
 How can manufacturers go about the appropriate resource allocation of workers?
 How best can they schedule for materials along with allocating essential resources and
determining the production capacity for a specific unit?
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OPERATIONS PLANNING
Operations planning is the step that addresses the need to develop specific operational processes for an
effective supply chain function.
Key questions answered with this:
 How can effective scheduling help outline the timeline and the resources that are necessary to
perform and complete the operational analysis?
 How can manufacturers go about information collection including various methods of data
collection depending on the type of operations that the planners want to access?
 How can an appropriate gap analysis be performed which involves performance reporting,
identification, cost + benefit analysis and final comparison?

SALES PLANNING
Sales planning is the next step which includes a periodic integrated operations and warehouse
management process that can help the organization to focus on key supply chain drivers.
Key questions answered with this:
 How can organizations accurately consider critical aspects like actual sales, product/ service
marketing, demand coordination, production planning, innovation, and new product
introduction, overall inventory control, etc. into the final plan?
 How can they ensure that final customer demand is effectively met by the organization’s
production, distribution, and purchasing processes?

Strategies for effective supply chain planning

DEMAND DRIVEN PLANNING BASED ON REAL-TIME INSIGHTS
Supply chain strategies that are purely demand-driven always are more successful than those which are
not.
The key indicators:
 Having accurate forecasting tools as the base for supply chain planning, which will guarantee a
holistic view of all the channels.
 This will ensure effective management of risks including natural calamities, worker absenteeism,
supplier unpredictability, etc.
 Using real-time insights for demand prediction, organizations can accordingly tweak their pricing
strategies as well to drive revenue growth, expand margins, add new product lines and deal with
limited supply scenarios.
 Also, organizations can now leverage the Internet of Things (IoT) driven technology, artificial
intelligence, machine learning, and cloud-based apps to get insights into real-time inventory
tracking, thus helping them leverage an agile demand-driven supply chain.

INTELLIGENT PLANNING + INTEGRATED EXECUTION FOR AN AGILE SUPPLY CHAIN

As organizations get clarity on the demand forecasting aspects, they next need to adapt their supply
chains to fluctuating market scenarios, changing opportunities and possible alternatives.
The key indicators:
 By adopting agile planning approaches and constantly fine-tuning factory operations,
manufacturers can create a smart supply chain that is sensitive to changing customer needs.
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 This helps to directly respond, react, and implement strategies that are necessary to keep up
with external changes.
 As a result, manufacturers experience various benefits like greater visibility across the value
chain, streamlined warehousing and distribution, predictable sourcing, logistics and
transportation and accurate decision making.
 This also gives the necessary analytical insights with necessary technology capabilities to
respond faster, better, and smarter.

INTEGRATED SALES, OPERATIONS AND STRATEGIC BUSINESS PLANNING FOR BETTER

ALIGNMENT
Although the objective of sales and operations planning is to run all just in time management in
manufacturing processes together like a well-oiled engine with good coordination among sales,
distribution, logistics, etc., many times this doesn’t happen.
The key indicators here are:
 In manufacturing companies with hundreds of processes running in parallel, often there are
disconnects between finance, strategy, and operations.
 A great way to address this is by using a unified business planning approach that integrates all
the people, processes, and technology elements right at the strategy and planning phase.
 This helps create a healthy supply chain forecasting system by involving finance and accounting
processes, for critical data-driven business decisions.
 Also, this way all critical processes are well-knit to ensure the operating plans are in line with the
financial goals along with real-time visibility into all critical dimensions for business success
including demand, supply, marketing, warehousing, production, etc.

FOCUSING ON PRODUCT MANAGEMENT DECISIONS + RIGHT PRODUCT DESIGN FOR

PROFITABILITY, INNOVATION AND DIVERSIFICATION
Very often, product-oriented decisions directly impact the level of innovation and profitability for an
enterprise.
The key indicators here are:
 As innovation only happens with effective collaboration and not in isolation, it is important to
ensure products are manufactured at the right cost, place and time.
 Also, driving the right decision early on in the product life cycle can affect the demand-supply
dynamics, productive capabilities, and operational efficiencies.
 Further, the level of product innovation is directly related to the choice of suppliers and
technical capabilities deployed.
 By effectively managing the volume of information, people and processes across the product life
cycle, accurate decisions can be made to ensure a healthy bottom line.
 This is easily possible using a seamless and clear collaboration across the end-to-end supply
chain loop including the demand, the actual production, the customers, manufacturers and the
suppliers.
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CREATING A CONTINUOUS SUSTAINABLE, RELIABLE AND PREDICTABLE SUPPLY
All of the above strategies will only work if there exists a reliable and continuous supply of goods or
services to help meet agreed customer SLAs.
The key indicators here are:
 In the absence of this, manufacturers may end up hoarding excessive inventory stocks which can
result in increased operations costs, damages, and may even create supply shortfalls.
 Also, in the absence of sustainability as a core strategic component in the supply chain strategy,
it is difficult to create a long-term impact across the supply chain itself.
 With a continuous supply chain improvement and operational excellence strategy which is well-
connected, reliable, and sustainable, manufacturers can create successful end-to-end supply
chain operations.
 When organizations have the right technology, infrastructure, analytical insights, and efficient
application processes that complement the digital manufacturing bond across the end-to-end
supply chain, data-driven manufacturing operations become more well connected and
integrated with demand-facing and planning processes.

Benefits of a well-orchestrated supply chain plan:

A well-balanced supply chain planning mechanism that touches all the revenue influencing factors
within an organization can help improve the overall competitive advantage. This goes a long way in
benefiting the organization in several ways:

1. ENHANCED THROUGHPUT
A well-planned supply chain directly influences the ability of an organization to increase its production
capacity that results in greater throughput, better yield, and superior output.

2. BETTER OPERATIONAL EFFICIENCY + EXECUTION

With accurate planning, relevant information about customer demand and market conditions helps
manufacturers make proactive decisions that influence the operational capacity directly. This helps
boost efficiencies and become more agile in responding to customer demands.

3. DECREASED COSTS
A good supply chain plan can directly help decrease several costs including inventory costs, unplanned
breakdown/damage costs, shipment costs, operational running costs, etc. Similarly, manufacturers also
see improvements in system responsiveness, customer/ vendor relationships, logistical issues, etc.

4. BETTER RESOURCE ALLOCATION

With effective supply chain planning, manufacturers become more perceptive about the actual resource
allocation across the operations value chain. They make more informed decisions about resource
shortages/ excess resources which could save them millions of dollars in channelizing efforts in the right
direction.
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5. REDUCE OPERATIONAL DELAYS
A well-planned supply chain with good two-way communication and collaboration can directly reduce
operational delays across the supply chain processes. With everyone who is involved is clearer of their
role and responsibilities, redundant processes can be avoided and issues like late shipments, logistical
confusions, and delivery delays can be completely eliminated.

The Power of AI-driven supply chain planning

With IoT and artificial intelligence (AI) lead technologies rapidly gaining momentum especially in the
global logistics and supply chain management industries, manufacturers stand to benefit from these in
several ways. The powerful evolution in artificial intelligence, machine learning, and data science has the
potential to bring in massive disruption and meaningful innovation across these industries.

With specific reference to supply chain planning, AI can help to a great extent in reducing supply chain
costs, managing inventory, and eliminating potential bottlenecks. AI in manufacturing can help obtain
new insights into several areas to boost productivity and optimize resources as well. As a result,
manufacturers are able to create more agile, flexible, and profitable supply chain plans to deliver goods
and services as per customer expectations.

One such important application of AI in supply chain planning is the process of eliminating bottlenecks
across the supply value chain to ensure manufacturers can meet their revenue targets easily.

History and basics of TQM

The history of total quality management (TQM) began initially as a term coined by the Naval Air Systems
Command to describe its Japanese-style management approach to quality improvement. An umbrella
methodology for continually improving the quality of all processes, it draws on a knowledge of the
principles and practices of:

 The behavioral sciences

 The analysis of quantitative and nonquantitative data
 Economics theories
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 Process analysis

Total Quality Management (TQM) refers to management methods used to enhance quality and
productivity in organizations, particularly businesses. TQM is a comprehensive system approach that
works horizontally across an organization, involving all departments and employees and extending
backward and forward to include both suppliers and clients/customers.

Although TQM techniques were adopted prior to World War II by a number of organizations, the
creation of the Total Quality Management philosophy is generally attributed to Dr. W. Edwards Deming.
In the late 1920s, while working as a summer employee at Western Electric Company in Chicago, he
found worker motivation systems to be degrading and economically unproductive; incentives were tied
directly to quantity of output, and inefficient post-production inspection systems were used to find
flawed goods.

Deming teamed up in the 1930s with Walter A. Shewhart, a Bell Telephone Company statistician whose
work convinced Deming that statistical control techniques could be used to supplant traditional
management methods. Using Shewhart's theories, Deming devised a statistically controlled
management process that provided managers with a means of determining when to intervene in an
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industrial process and when to leave it alone. Deming got a chance to put Shewhart's statistical-quality-
control techniques, as well as his own management philosophies, to the test during World War II.
Government managers found that his techniques could be easily taught to engineers and workers, and
then quickly implemented in over-burdened war production plants.

One of Deming's clients, the U.S. State Department, sent him to Japan in 1947 as part of a national effort
to revitalize the war-devastated Japanese economy. It was in Japan that Deming found an enthusiastic
reception for his management ideas. Deming introduced his statistical process control, or statistical
quality control, programs into Japan's ailing manufacturing sector. Those techniques are credited with
instilling a dedication to quality and productivity in theJapanese industrial and service sectors that
allowed the country to become a dominant force in the global economy by the 1980s.

While Japan's industrial sector embarked on a quality initiative during the middle 1900s, most American
companies continued to produce mass quantities of goods using traditional management techniques.
America prospered as war-ravaged European countries looked to the United States for manufactured
goods. In addition, a domestic population boom resulted in surging U.S. markets. But by the 1970s some
American industries had come to be regarded as inferior to their Asian and European competitors. As a
result of increasing economic globalization during the 1980s, made possible in part by advanced
information technologies, the U.S. manufacturing sector fell prey to more competitive producers,
particularly in Japan.

In response to massive market share gains achieved by Japanese companies during the late 1970s and
1980s, U.S. producers scrambled to adopt quality and productivity techniques that might restore their
competitiveness. Indeed, Deming's philosophies and systems were finally recognized in the United
States, and Deming himself became a highly-sought-after lecturer and author. The "Deming
Management Method" became the model for many American corporations eager to improve. And Total
Quality Management, the phrase applied to quality initiatives proffered by Deming and other
management gurus, became a staple of American enterprise by the late 1980s. By the early 1990s, the
U.S. manufacturing sector had achieved marked gains in quality and productivity.

TQM PRINCIPLES
Specifics related to the framework and implementation of TQM vary between different management
professionals and TQM program facilitators, and the passage of time has inevitably brought changes in
TQM emphases and language. But all TQM philosophies share common threads that emphasize quality,
teamwork, and proactive philosophies of management and process improvement. As Howard Weiss and
Mark Gershon observed in Production and Operations Management, "the terms quality management,
quality control, and quality assurance often are used interchangeably. Regardless of the term used
within any business, this function is directly responsible for the continual evaluation of the effectiveness
of the total quality system." They go on to delineate the basic elements of total quality management as
expounded by the American Society for Quality Control: 1) policy, planning, and administration; 2)
product design and design change control; 3) control of purchased material; 4) production quality
control; 5) user contact and field performance; 6) corrective action; and 7) employee selection, training,
and motivation.

For his part, Deming pointed to all of these factors as cornerstones of his total quality philosophies. In
his book Out of the Crisis, he contended that companies needed to create an overarching business
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environment that emphasized improvement of products and services over short-term financial goals. He
argued that if such a philosophy was adhered to, various aspects of business—ranging from training to
system improvement to manager-worker relationships—would become far healthier and, ultimately,
profitable. But while Deming was contemptuous of companies that based their business decisions on
statistics that emphasized quantity over quality, he firmly believed that a well-conceived system of
statistical process control could be an invaluable TQM tool. Only through the use of statistics, Deming
argued, can managers know exactly what their problems are, learn how to fix them, and gauge the
company's progress in achieving quality and organizational objectives.

Organizational issues in TQM Implementation

Total Quality Management (TQM) is an enhancement to the traditional way of doing business. It is a
proven technique guaranteeing survival in world-class competition. The culture and actions of an
organization can be transformed by changing only the actions of management. Total Quality
Management (TQM) is a comprehensive and structured approach to organizational management that
seeks to improve the quality of products and services through ongoing refinements in response to
continuous feedback. Analyzing the three words, we have:

Total-- Makeup 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 an art of managing the whole to achieve excellence. TQM is also defined as both a
philosophy and a set of benchmarks that represent the foundation of a continuously improving
organization. It is an application of quantitative methods and human resources to improve all the
processes within an organization and exceed customer needs at present and in the future. TQM
integrates fundamental management techniques, existing improvement efforts and technical tools
under a disciplined approach.

Even though there is a plethora of success stories on TQM there is also an abundance of literature
available that highlights the reasons why TQM has not been very successful. In the very early times, it
was thought that TQM could not survive outside of Japan due to culture differences. However, this was
proven wrong by Johnson and Ouchi [41] who identified several examples where Japanese companies
successfully implemented TQM in their American factories. So what is it that compromises the benefits
of this management theory? The following sections summarize the challenges found with each of the
previously identified principles.

There are 9 obstacles in implementation of TQM in the organization. The obstacles are given as below.
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1. Lack of management commitment

In order for any organizational effort to succeed, there must be a substantial management commitment
of management time and organizational resources. The purpose must be clearly and continuously
communicated to all personnel management must consistently apply the principle of TQM.

2. Inability to change organizational culture

Changing an organization's culture is difficult and will require as much as five years. Individuals resist
change--they become habituated to doing a particular process and it becomes the preferred way.
Management must understand and utilize the basic concepts of change. They are;

1. People change when they want to and to meet their own needs
2. Never expect anyone to engage in behaviour 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.

It is difficult for individuals to change their way of doing things; It is much more difficult for an
organization to make cultural change. Organization that spends more planning for the cultural aspects of
implementing a TQM program will improve their chance of success.
e.g. concern to India, Chandigarh is the first smoke free city of India, this is the cultural change.

3. Improper planning
All constituents of the organization must be involved in the development of the implementation plan
and any modifications that occur as the plan evolves. The Two-way communication of ideas is the matter
of great importance and should be taken by all personnel during the development of the plan and its
implementation. Customer satisfaction should be the goal rather than financial or sales goals.

4. Lack of continuous training and education

Training and education is an ongoing process for everyone in the organization. Needs must be
determined, and a plan developed to achieve those needs. Training and education are most effective,
when senior management conducts the training on the principles of TQM. External trainer can be hired
for communicating the TQM effort to all personnel on a continual basis. Lack of training in group
discussion and communication techniques, quality improvement skills, problem identification, and the
problem-solving method was the second most important obstacle.

5. Incompatible organizational structure and isolated individuals and departments

Difference between departments and individuals can create implementation problems. The use of
multifunctional teams will help to break down long-standing barriers. Restructuring to make the
organization more response to customer needs may be needed. Individuals who do not embrace the
new philosophy can be required to leave the organization.

6. Ineffective measurement techniques and lack of access to data and results

Key characteristics of the organization should be measured for effective decision making. To improve a
process are you need to measure the effect of improvement ideas. Access to data and quick retrieval is
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necessary for effective processes. Find the root cause, correct the problem and eliminate the root cause
to prevent recurrence of the problem.

7. Paying inadequate attention to internal and external customers

Organizations need to understand the changing needs and expectations of their customers. Effective
feedback mechanism that provides data for decision making are necessary for this understanding. Give
the right people (who are directly working on the product) direct access to the customers. When an
organization fails to empower individuals and teams, it can't hold them responsible for producing
results.

8. Inadequate use of empowerment and teamwork

Teams need to have the proper training and at least in the beginning by a facilitator. Individuals should
be empowered to make decisions that affect the efficiency of their process or the satisfaction of their
customer.

9. Failure to continuously improve

It is tempting to sit back and rest on your laurels. However, a lack of continuous improvement of the
process, product and service will even leave the leader of the pack in the dust.

Approaches to Quality Management by Deming, Juran, and

Crosby
Deming was an experienced statistician who says that management must concentrate on the setting
following by improving the systems continuously in which the human resources worked. Deming insisted
that when working with other employees the managers are important because a better feedback will be
obtained from the employees who do the work correctly. Unlike the scientific management approach
which involves the managers to set job methods and standards, Deming also insisted the need for
training employees in the statistical process and work analysis methods. He believed that it gave the
ability to the workforce to denote how and where there is a change in the needs (Edwards, 1982).

DEMING’ S 14 POINTS FOR MANAGEMENT

1. Constancy of purpose.

2. A new philosophy.

3. Cease dependence on inspection.

4. End lowest tender contracts.

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5. Improve every process.

6. Institute training on the job.

7. Institute leadership.

8. Drive out fear.

9. Break down the barrier.

10. Eliminate exhortations.

11. Eliminates targets.

12. Permit pride of workermanship.

13. Encourage education.

14. Create top management structure.

Juran worked at the Hawthorne Electricity Plant in Chicago in the 1920s visiting Japan in the early 1850s
and his teaching is based loosely on the Pareto principle. Juran suggested that typically 95% of the
problems of quality at work are the result of a system where the employees work inside the
environment. So there is a small way to resolve the results by asking to develop the motivation of an
employee. His advice was for the managers to specify all major quality problems, highlighting the major
problems and if it is worked out will give many advantages and starts the projects to deal with the
employees. Juran believes that any person who is influenced by the product is specified as a customer
by establishing the idea of external and internal customers (Joseph, 1988).

JURAN’ S 10 P0INTS FOR QM

1. Built Awareness of need &opportunity for improvement.

2. Set goals for improvement.

3. Organize to reach the goals.

4. Provide training.

5. Carry out projects to solve problems.

6. Report progress.

7. Give recognitions.
 HIPAL University
Higher Institute of Petroleum & Logistics
8. Communicate results.

9. Keep score.

10. Maintain momentum by making annual improvement part of the regular process of the
company.

Crosby an engineer is known for accessing the concept of Zero Defects which was produced at a
company he once worked for. Eventually, Crosby became the Corporate Vice President of the ITT
Corporation and the Director of Quality. Crosby’s mantra was ‘Quality is Free’. Further that it is not an
issue of degree. He emphasizes that the management must note the quality by tracking the non-
conformance cost and cost of wrong things continually. Crosby denoted that the major point is the
requirement of conformance.

Crosby suggested four “absolutes of quality”:

1. Definition: conformance to requirements

2. System: prevention

3. Performance standard: Zero defects

4. Measurement: the price of non-conformance.

As for quality improvement, Crosby had 14 steps:

Step 1: Management Commitment

Step 2: Quality Improvement Team

Step 3: Quality Measurement

Step 4: Cost of Quality Evaluation

Step 5: Quality Awareness

Step 6: Corrective Action

Step 7: Establish an Ad Hoc Committee for the Zero Defects Program

Step 8: Supervisor Training

Step 9: Zero Defects Day

 HIPAL University
Higher Institute of Petroleum & Logistics
Step 10: Goal Setting

Step 11: Error Cause Removal

Step 12: Recognition

Step 13: Quality Councils

Step 14: Do It Over Again