CHAPTER 1

INTRODUCTION TO TOTAL QUALITY

MANAGEMENT
OBJECTIVES:
After reading this chapter, the student should be able to:
 Define Quality.
 Identify primary elements, core concepts and benefits of Total Quality
Management.
 Distinguish between traditional management and TQM.
 Compare and contrast reengineering and TQM.
ACTIVITY:
Answer the following questions based on your own
opinion.
1. Define Quality.
2. Why would a customer come to you if your competitor
is also offering the same product?
3. What is Total Quality Management?
 QUALITY
Quality refers to a parameter which
decides the superiority or inferiority
of a product or service.
 APPROACHES TO QUALITY
DEFINITION:
• TRANSCENDENT
-This means quality is achieved through experience.
• PRODUCT-BASED
-This is reflected by differences in product and its ingredients or attributes.
• 3. USER-BASED
-Based on personal views and perspectives of the consumers. Durability is
the key factor.
 APPROACHES TO QUALITY
DEFINITION:
• MANUFACTURING-BASED
-This approach is focused on cost reduction, and concerned
with manufacturing and engineering.
• VALUE-BASED
-This approach is based on cost and prices. Better
performance at lower cost is recognized as a quality product.
 QUALITY TYPES
• QUALITY OF DESIGN – all about set of characteristics that the
product or service must minimally have to satisfy the requirements of
the customer based on market research.
• QUALITY OF CONFORMANCE – basically meeting the standards
or user based characteristics defined in the design phase after the
product is manufactured or while the service is delivered.
• QUALITY OF PERFORMANCE – it is how sound the product
functions or service performs when used.
•
 QUALITY LEVELS

• ORGANIZATIONAL LEVEL - meeting external

customer requirements
• PROCESS LEVEL – linking external and internal
customer requirements
• PERFORMER/JOB/TASK LEVEL – meeting
internal customer requirements
 QUALITY PARADIGMS
• Customer – craft Paradigm – the focus is on the product or service,
and performance should be exactly what the customer demands.
• Mass production and sorting paradigm – the focus is on the
production rate without the direct involvement of the customer.
• Statistical Quality Control Paradigm – it is comparable to the mass
production and sorting paradigm, except that more emphasis is given
to production processes.
 QUALITY PARADIGMS

• Total Quality Management Paradigm – focuses on

customers and suppliers in addition to mass production
and statistical methods.
• Techno – Craft Paradigm – it is the socio- technical
compliment to the custom – craft paradigm with the
intention of reducing delivery time.
 COST OF QUALITY

• A method that permits an organization to decide

on the level to which its resources are used for
activities that avoid poor quality , that assess the
quality of the organization’s product or services,
and that results from internal and external
failures.
 1. PREVENTION COSTS

• These are incurred to prevent or avoid failure problems.

A. PRODUCT OR SEVICE REQUIREMENTS
B. QUALITY PLANNING
C. QUALITY ASSURANCE
D.TRAINING
 2. APPRAISAL COSTS

• These costs are associated with measuring and

monitoring activities related to quality standards and
performance requirements.
A. VERIFICATION
B. QUALITY AUDITS
C. SUPPLIER RATING
 3. INTERNAL FAILURE COSTS

• These costs are acquired to treat defects revealed earlier

when the product or service is delivered in the
customer.
A.WASTE
B. SCRAP
C. REWORK OR RECTIFICATION
D.FAILURE ANALYSIS
 4. EXTERNAL FAILURE COSTS
• These are costs obtained to treat defects exposed by customers.
A. REPAIRS AND SERVICING OF BOTH RETURNED PRODUCTS
AND THOSE IN THE FIELD
B. WARRANTY CLAIMS
C. COMPLAINTS
D. RETURNS HANDLING AND INVESTIGATION OF DISCARDED OR
RECALLED PRODUCTS INCLUDING TRANSPORT COSTS.
 TOTAL QUALITY MANAGEMENT
• An all-inclusive and well-thought-out means of organizational
management that searches to advance the quality of processes,
products, services, and culture through continuing minor
changes in reply to constant feedback.
• TQM consists of continuous process enhancement activities
concerning managers and workers alike in an organization in a
completely integrated effort toward improving performance at
all levels.
 PRIMARY ELEMENTS OF TQM
FOUNDATION
1. Ethics – a combination of written and unwritten codes of
principles that govern decisions and actions within a company.
2. Integrity – consistency of actions, values, methods, measures,
principles, expectations, and outcomes at the workplace.
3. Trust – one of the most important factors necessary for the
implementation of TQM because it builds a cooperative
environment.
 PRIMARY ELEMENTS OF TQM
BUILDING BRICKS
1. Leadership – provides a direction to the entire process of TQM.
2. Teamwork – crucial element of TQM
Teamwork offers contiguous improvement in processes and operations. The
teams may be:
A. Problem – Solving
B. Quality Improvement
C. Natural Work
 PRIMARY ELEMENTS OF TQM
3. Training – employees need to be trained on TQM to
become highly productive.
 PRIMARY ELEMENTS OF TQM
BINDING MORTAR
1. Downward Communication – this is the dominant form of
communication in an organization.
2. Upward Communication – the flow of information takes
place from the lower-level employees to the top-level
management.
3. Sideways/Lateral Communication – takes place between
various departments.
 PRIMARY ELEMENTS OF TQM
ROOF
• Includes recognition which brings greater internal customer
satisfaction, which in turn leads to external customer
satisfaction in the organization.
• Recognition is the final element of TQM.
 CORE CONCEPTS OF TQM
1. Customer Satisfaction – TQM is centered on the requirements
of the customer.
2. Internal Customer Satisfaction – the person within the
company who receives the work of another and adds is
contribution to the products or service before passing it on to
someone else.
3. All work is a Process – another possible focal point of
improvement is that of business processes.
 CORE CONCEPTS OF TQM
4. Measurement – in order to improve, one must first
measure one’s present performance.
A. Defects – work not up to specification
B. Rework – a work requiring correction
C. Scrap – work thrown away
D. Lost Items – work done again
 CORE CONCEPTS OF TQM
E. Backlogs – work behind schedule
F. Late deliveries – work after the agreed time
G. Surplus Items – work not required
 CORE CONCEPTS OF TQM
5. Synergy in Teamwork – The idea of synergy in
teamwork, where the whole is greater than the sum of the
parts, is a key concepts in TQM.
6. People Make Quality – most of the quality problems
within an organization are not usually within the control
of an individual employee.
 CORE CONCEPTS OF TQM
7. Continuous Improvement Cycle – the continuous
cycle of instituting customer requirements, meeting and
measuring them, measuring success, and continuing the
improvement can be used both externally and internally
to stimulate quality improvements.
8. Prevention – at the heart of TQM is the conviction
that it is possible to achieve defect-free work most of the
time.
 BENEFITS OF TQM
1. Creates a Good Corporate Culture – TQM is an approach
where the customer is the center point of the business rather than
the department.
2. Better reviews from customers – another benefit of TQM is that
customers and clients are highly satisfied with the performance.
3. Better performance from employees – through TQM, there is
often more attention placed on meeting the needs of the
employees or internal customers.
 SHIFTING FROM TRADITIONAL
MANAGEMENT TO TQM
1. Traditional way of management focus on internal activities.
2. Traditionally people thought bad quality products were due to the
workers who did not perform their job properly.
3. Total quality management is an organization-wide movement.
4. TQM believes in quality assurance rather than checking.
5. Unlike the traditional management style, total quality management
makes decisions based on facts and figures.
6. TQM depends on cyclic thinking.
 TQM AND REENGINEERING
• REENGINEERING – sometimes called Business Process
Reengineering (BPR)
• It involves a complete rethinking and transformation of key
business processes, leading to strong horizontal coordination
and greater flexibility in responding to changes in the
environment.
• Basically means starting over, throwing out all the thinking of
how work was done and deciding how it can best be done now.
 SIMILARITY AND DIFFERENCE
BETWEEN REENGINEERING AND TQM
REENGINEERING TQM
Similarities:
1. Basis of Analysis Processes Processes
2. Performance Measurement Rigorous Rigorous
3. Organizational Change Significant Significant
4. Behavioral Change Significant Significant
5. Time Investment Substantial Substantial
Differences:
1. Level of Change Radical Incremental
2. Starting Point Clean Slate Existing process
3. Participation Top-Down Bottom-Up
4. Typical Scope Broad,Cross-Functional Narrow, within function
5. Risk High Moderate
6. Primary Enabler Information Technology Statistical Control
7. Type of Change Cultural and Structural Cultural
• TQM is the way of achieving the objective of “total quality”.
• The techniques used for continuous improvement and process
reengineering are the tools of TQM.
• In Japan, continuous improvement is referred to as KAIZEN.
• KAIZEN – this is incremental, gradual and continuous
improvement
• Improvement (Kaizen) – According to Masaaki Imai