Spread Knowledge

Total Quality Management - MGT510

MGT510 - Total Quality Management - Lecture Handout 01

User Rating:  / 0



In our present age of market driven capitalism and futuristic knowledge driven economic markets, the decision are made and the trends are set by the professional managers. Unlike their predecessors, the captains of today’s business do not own their own companies. They must know the whole business but have control over only one small part. They must be product oriented, process conscious, financially responsible, and public spirited. They must be all things to all people, yet still function as only one cog in the wheel.

If the history of management tells us anything, it is that, no matter what happens; peace or war, prosperity or famine, this world will always be in need of good managers . . . the kind who can get society from “where it is” to “where it wants to be.” Can you be one?

What is an Organization?

“An organization is an entity where two or more persons work together to achieve a goal or a common purpose.”

There are so many organizations around us. Daily we visit and see many organizations, Hospitals, Colleges, Factories, Farms and Government offices. Mosque/Church is also an example of an organization. People go there and say prayers. Activities of praying are to achieve a certain goal. Similarly, any unit in which two or more persons are working together for some purpose is called an organization.

Read more: MGT510 - Total Quality Management - Lecture Handout 01

MGT510 - Total Quality Management - Lecture Handout 02

User Rating:  / 0


Twentieth-century management has been strongly influenced by Taylor’s scientific management and Weber’s theory of bureaucracy. These approaches have led managers to work within functional hierarchies, with their responsibilities divided according to specialized activities, such as accounting, marketing, engineering, and manufacturing. Economic principles for competing in well-defined markets emphasized economies of scale, efficiencies, mass production, and technological innovation.

While there had been competition, competitors often played according to a “live and let live” strategy. Because monopolies were precluded by law, companies had little incentive to completely drive competitors from the marketplace.

Even when new product technologies created new markets, such as plastics in the 1950s, management practices changed very little. Managers set goals for productivity, efficiency, and profitability, using management set goals for productivity, efficiency, and profitability, using Management by Objectives (MBO) to link strategy and operations through the hierarchy. Managers motivated employees to fulfill those goals by inducements such as profit sharing, stock options, and bonuses, or other rewards such as job enrichment or participative management. However, the job of management remained much the same: set goals, define roles, provide technologies, and motivate employees. Accounting, marketing, engineering, and manufacturing practices also did not change. Occasionally, new techniques were introduced within the traditional functions, such as quality control in manufacturing. But such changes went largely unnoticed by the rest of the organization.

No one challenged this approach to management as long as it served society well. While managers in Japan were rewriting the rules of business practice and management and planning to win the world markets by focusing on quality management, U.S. managers continued in the stage of normality. The US, and western society in general, was focused on another agenda: the cold war in the 1950s and 1960s.

Read more: MGT510 - Total Quality Management - Lecture Handout 02

MGT510 - Total Quality Management - Lecture Handout 03

User Rating:  / 0



The total quality philosophy introduced a whole new way of looking at performance of a company through people and managing the quality of products and processes. The traditional view of quality measured process performance in defective parts per hundred produced. With total quality the same measurement is thought of I parts per million. The traditional view focused on after-the-fact inspections of products. With total quality the emphasis is on continuous improvement of products, processes, and people in order to prevent problems before they occur. The traditional view of quality saw employees as passive workers who followed orders given by supervisors and managers. It was their labor, not their brains that was wanted. With total quality, employees are empowered to think and make recommendations for continual improvement. They are also shown the control boundaries within which they must work and are given freedom to make decisions within those boundaries.

The traditional view of quality expected one improvement per year per employee. Total quality organizations expect to make at least 10 or more improvements per employee per year. Organizations that think traditionally focus on short-term profits. The total quality approach focuses on long-term profits and continual improvement.

The following statements summarize some of the major differences between the traditional view of quality and the total quality perspective:

MGT510 - Total Quality Management - Lecture Handout 04

User Rating:  / 0


Total quality–a comprehensive, organization-wide effort to improve the quality of products and service–applies not only to large manufacturers, but to small companies alike. All organization–large and small, manufacturing and service, profit and not-for-profit-can benefit from applying the principles of total quality.

During the 1990s, health care, government, and education began to pay increased attention to quality. As more public and government attention focuses on the nation’s health care system, its providers turn toward quality as a means of achieving better performance and lower costs. One hospital, for example, lowered its rate of post-surgical infections to less than one-fifth of the acceptable national norms through the use of quality tools.

Although quality initiatives focused initially on reducing defects and errors in products and services through the use of measurement, statistics, and other problem-solving tools, organizations began to recognize that lasting improvement could not be accomplished without significant attention to the quality of the management practices used on a daily basis. Managers began to realize that the approaches they use to listen to customers and develop long-term relationships, develop strategy, measure performance and analyze data, reward and train employees, design and deliver products and services, and act as leaders in their organizations are the true enablers of quality, customer satisfaction, and business results. In other words, they recognized that the “quality of management” is as important as the “management of quality.” As organizations began to integrate quality principles into their management systems, the notion of total quality management, or TQM, became popular. Quality took on a new meaning of organization-wide performance excellence rather than an engineering-based technical discipline.

Read more: MGT510 - Total Quality Management - Lecture Handout 04

MGT510 - Total Quality Management - Lecture Handout 05

User Rating:  / 0


Bringing TQ to Life at ABC Engineering Company:

ABC is a contract manufacturer of precision sheet metal and machined components for telecommunications semi-conductor, and medical equipment industries. Some of the ways it exemplifies the principles of TQ are described below.

Customer Focus

ABC made a strategic decision to carefully select customers that support it’s values–particularly a systematic approach to business and performance management, desire for long-term partnerships, and global leadership. Management and Team Leaders work with each customer to establish current requirements and future needs, and each customer is assigned a three-person Customer Service team that is on call 24 hours a day for day-to-day production issues.

Process Orientation

Processes such as prototype development, scheduling, production setup, fabrication, assembly, and delivery have process owners responsible for maintaining the process to customer requirements. A Quality Assurance team member works with manufacturing teams to create process documentation.

Read more: MGT510 - Total Quality Management - Lecture Handout 05

MGT510 - Total Quality Management - Lecture Handout 06

User Rating:  / 0


Total Quality Management is an organization wide process based on:

  • best use of the resources of the total organization
  • organizational flexibility and response to change
  • defined internal and external customer/supplier relationships embracing:
      • external customers
      • internal customers
      • external suppliers
      • internal suppliers

Bound together in long term business relationships

  • Measurement of performance. The standard is the “agreed customer requirement “and the required performance is
    • absolute conformance to agreed customer requirements
    • customer satisfaction
    • process efficiency
    • anticipating customer needs and expectations
    • delivering products and services that delight customers
    • benchmarking - identifying and adopting world-wide best practice
    • measuring and monitoring continuous improvement

TQM principles provide a framework and model how to spend the time in organizations to do the quality work. Conducting meetings and making decision is also one the important task of managers.

Read more: MGT510 - Total Quality Management - Lecture Handout 06

MGT510 - Total Quality Management - Lecture Handout 07

User Rating:  / 0


The Concept and Definition of Quality

While managers have shown interest in the concept of quality, many have been frustrated by its elusiveness. They find diverse and often conflicting definitions in professional books, journals, and news media. Despite common themes such as continuous improvement, customer focus, and excellence, different people emphasize different things. For example, in a 1991 public television special, “Quality or Else,” executives, managers, workers, academics, and others defined quality variously as follows:

  • A pragmatics system of continual improvement, a way to successfully organize man and machines.
  • The meaning of excellence.
  • The unyielding and continuing efforts by everyone in an organization to understand, meet, and exceed the needs of its customers.
  • The best product that you can produce with the materials that you have to work with.
  • Continuous good product which a customer can trust.
  • Producing a product or service that meets the needs or expectations of the customers.
  • Not only satisfying customers, but delighting them, innovating, creating.

Your own sample of definitions would probably reveal similar variety. Different companies, and different people within the same company, often disagree on the definition of quality. Sometimes the disagreement is merely due to semantics. Sometimes they are the result of focusing on different dimensions of quality. Other times the differences are more profound, implying conflicting courses of action and approaches to management. Here we look at several views of quality and then offer a definition that should help to integrate managerial efforts to improve quality throughout an organization.

Read more: MGT510 - Total Quality Management - Lecture Handout 07

MGT510 - Total Quality Management - Lecture Handout 08

User Rating:  / 1


Total Quality Paradigms

Adopting a TQ philosophy requires significant changes in organization design, work processes, and culture. Organizations use a variety of approaches. Some emphasize the use of quality tools, such as statistical process control of Six Sigma (which we discuss in the next chapter), but have not made the necessary fundamental changes in their processes and culture. It is easy to focus on tools and techniques but very hard to understand and achieve the necessary changes in human attitudes and behavior. Others have adopted a behavioral focus in which the organization’s people are indoctrinated i a customerfocused culture, or emphasize error prevention and design quality, but fail to incorporate continuous improvement efforts. Still other companies focus on problem-solving and continuous improvements, but fail to focus on what is truly important to the customer. Although these firms will realize limited improvements, the full potential of total quality is lost due to a lack of complete understanding by the entire organization.

Single approaches, such as statistical tools, behavioral change, or problem solving can have some shortterm success, but do not seem to work well over time. Total quality requires a comprehensive effort that encompasses all of these approaches. A total change in thinking, not a new collection of tools, is needed. Total quality requires a set of guiding principles. Such principles have been promoted by the many “quality gurus” – Deming, Juran, and Crosby, Ishikawa and Taguchi. Their insights on measuring, managing, and improving quality have had profound impacts on countless managers and entire corporations around the world.

Read more: MGT510 - Total Quality Management - Lecture Handout 08

MGT510 - Total Quality Management - Lecture Handout 09

User Rating:  / 0


WTO (in 20XX)
The Shifting Focus of Corporate Culture

From To
Thinking Global Being Global
Focus on Local Market Focus on Global Market
MNC in manufacturing MNC in Services
Antagonistic towards Rivals Collaboration with Rivals
Work with Hands Work with 3H & H3
Upgrade Technology Upgrade People
Focus on Process Quality Focus on Design Quality
Mass Mindset Lean and Me Mindset
Manage by Control Manage by Commitment
Individual Values Shared Values

Read more: MGT510 - Total Quality Management - Lecture Handout 09

MGT510 - Total Quality Management - Lecture Handout 10

User Rating:  / 0


The Evolution of Quality Approaches

The shift to Total Quality Management may be revolutionary for many managers because the tenets of the new paradigm are so radically different from past managerial practices. It will require both a thought revolution and a behavioral revolution. Approaches to quality have evolved through a series of gradual refinements over the last century. The shift seems dramatic and revolutionary to many managers because they have not kept up with the evolving approaches over the years. However, they have not defined their managerial roles in terms of the latest advancements or they feel skeptical about its success.

The Four Major Quality Eras

Date of inception
Quality Control
Strategic Total
Primary concern Detection Control Coordination Strategic impact
View of quality A problem to be
A problem to be
A problem to be
solved, but one
that is attacked
A competitive
Emphasis Product
Product uniformity
with reduced
The entire
production chain,
from design to
market, and the
contribution of all
functional groups,
designers, to
preventing quality
The market and
consumer needs
Methods Gauging and
Statistical tools
and techniques
Programs and
Strategic planning,
goal-setting, and
mobilizing the
Role of quality
sorting, counting,
and grading
and the application
of statistical
quality planning,
and program
education and
consultative work
with other
departments, and
program design
Who has
responsibility for
The inspection
The manufacturing
and engineering
All department,
although top
management is
only peripherally
involved in
planning, and
executing quality
Everyone in the
organization, with
top management
exercising strong
Orientation and
“Inspects in”
“Controls in”
“Builds in” quality “Manages in”

Read more: MGT510 - Total Quality Management - Lecture Handout 10

MGT510 - Total Quality Management - Lecture Handout 11

User Rating:  / 0


Beyond Total Quality

By the end of the 1990s Total Quality Management (TQM) was considered little more than a fad by many American business leaders (although it still retained its prominence in Europe).

As the 21st century begins, the quality movement has matured. New quality systems have evolved beyond the foundations laid by Deming, Juran and the early Japanese practitioners of quality.

Some examples of this maturation:

  • In 2000 the ISO 9000 series of quality management standards was revised to increase emphasis on customer satisfaction.
  • Beginning in 1995, the Malcolm Baldrige National Quality Award added a business results criterion to its measures of applicant success.
  • Six-Sigma, a methodology developed by Motorola to improve its business processes by minimizing defects, evolved into an organizational approach that achieved breakthroughs – and significant bottom-line results.
  • Quality Function Deployment was developed by Y. Akao as a process for focusing on customer wants or needs in the design or redesign of a product or service.
  • Sector-specific versions of the ISO 9000 series of quality management standards were developed for such industries as automotive (QS-9000), aerospace (AS9000) and telecommunications (TL 9000 and ISO/TS 16949) and for environmental management (ISO 14000) and also for IT Sector.
  • Quality has moved beyond the manufacturing sector into such areas as service, healthcare, education and government.
  • The CMM levels 1-5 emphasize quality in IT sector from the maturity point of view of processes and people.
  • Emphasis on learning by doing as a means of continual improvement has been accepted and has paved the way to consider Knowledge as a strategic resource of production in 21st century work place and in work organizations.
  • Discussion of Knowledge Management and Learning Organizations are becoming common in all sorts of companies and all sectors of economy and is rather being taken as a source of national competitive advantage in global interconnected and interdependent info-com oriented world.

  • Read more: MGT510 - Total Quality Management - Lecture Handout 11

MGT510 - Total Quality Management - Lecture Handout 12

User Rating:  / 0


Many individuals have made substantial contributions to the theory and practice of quality management. These include the well-known “gurus”: W. Edwards Deming, Joseph M. Juran, and Philip B. Crosby, as well as many other consultants, business executives, and academic researchers. Their philosophical writings and lectures have helped shape management thought as well as provide the foundation for practical management frameworks designed around quality.

Total quality requires a set of guiding principles. Such principles have been promoted by the three “quality gurus” – Deming, Juran, and Crosby. Their insights on measuring, managing, and improving quality have had profound impacts on countless managers and entire corporations around the world. Deming has generated the most interest and controversy. A discussion of his philosophy, which is actually more about management than quality, follows.

The Deming Management Philosophy

Deming was trained as statistician and worked for Western Electric during its pioneering era of statistical quality control development in the 1920s and 1930s. During World War II he taught quality control courses as part of the national defense effort. Although Deming taught many engineers in the United States, he was not able to reach upper management. After the war, Deming was invited to Japan to teach statistical quality control concepts. Top managers there were eager to learn, and he addressed 21 to executives who collectively resented 80 percent of the county’s capital. They embraced Deming’s message and transformed their industries. By the mid-1970s, the quality of Japanese products exceeded that of Western manufacturers, and Japanese companies had made significant penetration into Western markets.

Read more: MGT510 - Total Quality Management - Lecture Handout 12

MGT510 - Total Quality Management - Lecture Handout 13

User Rating:  / 0


Theory of Knowledge

The third part of Profound Knowledge is the theory of knowledge – a branch of philosophy and management concerned with the nature and scope of knowledge, its presuppositions and bases, and the general reliability of claims to knowledge.

Deming emphasizes that there is no knowledge without theory and that experience alone does not establish a theory. To copy an example of success without understanding it with the aid of theory may lead to disaster. Experience only describes; it cannot be tested or validated. Theory establishes a causeand- effect relationship that can be used for prediction. Theory leads to questioning and can be tested and validated – it explains why. Many consultant methods that have sustained success are grounded in theory. Managers have responsibility to learn and apply theory.


Psychology helps us to understand people, interactions between people and circumstances, interactions between leaders and employees, and any system of management. People differ from one another. A leader must be aware of these differences and use them to optimize everybody’s abilities and inclinations.

Read more: MGT510 - Total Quality Management - Lecture Handout 13

MGT510 - Total Quality Management - Lecture Handout 14

User Rating:  / 0



  • End Price Tag Decisions – Purchasing decisions traditionally have been driven by cost through competitive bidding, not by quality. Costs due to inferior materials and components increase costs in later stages of production and can far exceed the “savings” realized through competitive bidding. The purchasing department is a supplier to the production department and must understand its new role. Suppliers themselves are part of the whole system.
  • Improve constantly – Western management has typically thought of improvement in the context of large, expensive innovations such as robotics and computer-integrated manufacturing. The success of Japanese manufacturers, however, is due primarily to continuous, small, incremental improvements in design and production. Improved design results from understanding customer needs and from continual market surveys and other sources of feedback. Improved production is achieved by reducing the causes of variation in order to
    establish a stable, predictable production process. Statistical methods provide one means for doing this. Improvement should go beyond production, encompassing transportation, engineering, maintenance, sales, service, and administration – all areas of the organization.
  • Institute Training – Employees need the proper tools and knowledge to do a good job, and it is management’s responsibility to provide these. In addition to specific job skill, all employees should be trained in statistical tools for quality problem solving and continuous improvement. Training not only improves quality and productivity, but also enhances workers’ morale by showing them that the company is dedicated to helping them and is investing in their future. Deming notes that in Japan, entry-level managers spend 4 to 12 years on the factory floor and in other activities to learn the problems of production. At Honda f America in Maryville, Ohio, all
    employees start out on the production floor regardless of their job classification.

  • Read more: MGT510 - Total Quality Management - Lecture Handout 14

MGT510 - Total Quality Management - Lecture Handout 15

User Rating:  / 0


Deming Cycle

Deming cycle is a tool for continuous improvement and it is a tool for an ongoing effort to improve products, services or processes. These efforts can seek “incremental” improvement over time or “breakthrough” improvement all at once.

Among the most widely used tools for continuous improvement is a four-step quality model—the plando- check-act (PDCA) cycle, also known as Deming Cycle or Shewhart Cycle:

  • Plan: Identify an opportunity and plan for change.
  • Do: Implement the change on a small scale.
  • Check: Use data and facts to analyze the results of the change and determine whether it made a difference.
  • Act: If the change was successful, implement it on a wider scale and continuously assess your results. If the change did not work, begin the cycle again.

Deming cycle was developed to link the production of a product with consumer needs and focus the resources of all departments (research, design, production, and marketing) in a cooperative effort to meet those needs. The Deming Cycle proceeds as follows:

Read more: MGT510 - Total Quality Management - Lecture Handout 15

MGT510 - Total Quality Management - Lecture Handout 16

User Rating:  / 0


The Juran’s Philosophy and Trilogy

The Juran’s Trilogy® is a registered trademark of Juran Institute, Inc.

juran philosophy

Juran taught quality principles to the Japanese in the 1950s just after Deming and was a principal force in their quality reorganization. Like Deming, he concludes that we face a major crisis due to the loss of sales to foreign competition and the huge costs of poor quality. To solve this crisis, new thinking about quality that includes all levels of the managerial hierarchy is required. Upper management in particular requires training and experience in managing for quality.

Read more: MGT510 - Total Quality Management - Lecture Handout 16

MGT510 - Total Quality Management - Lecture Handout 17

User Rating:  / 0


  • The only performance measurement is the cost of quality. The cost of quality is the expense of nonconformance. Crosby notes that most companies spend 15 to 20 percent of their sales dollars on quality costs. A company with a well-run quality management program can achieve a cost of quality that is less than 2.5 percent of sales, primarily in the prevention and appraisal categories. Crosby’s program calls for measuring and publicizing the cost of poor quality. Quality cost data are useful in calling problems to management’s attention, selecting opportunities for corrective action, and tracking quality improvement over time. Such data provide visible proof of improvement and recognition of achievement. Juran also supports this theme.
  • The only performance standard is Zero Defects. Crosby feels that the Zero Defects (ZD) concept is widely misunderstood and resisted. Zero Defects is not a motivational program. It is as follows:
    • Zero Defects is a performance standard. It is the standard of the craftsperson regardless of his or her assignment. The theme of ZD is doing it right the first time. That means concentrating on preventing defects rather than just finding and fixing them.
    • People are conditioned to believe that error is inevitable; thus they not only accept error, they anticipate it. It does not bother us to make a few errors in our work. . . . To err is human. We all have our own standards in business or academic life-our own points at which errors begin to bother us. It is good to get an A in school, but it may be OK to pass a course with a C.
    • We do not maintain these standards, however, when it comes to our personal life. If we did, we should expect to be shortchanged every now and then when we cash our paycheck; we should expect hospital nurses to drop a constant percentage of newborn babies. . . . We as individuals do not tolerate these things. We have a dual standard: one for ourselves and one for our work.

    • Read more: MGT510 - Total Quality Management - Lecture Handout 17

MGT510 - Total Quality Management - Lecture Handout 18

User Rating:  / 0


The Cost of Quality:

It’s a term that’s widely used – and widely misunderstood. The “cost of quality” is not the price of creating a quality product or service. It’s the cost of NOT creating a quality product or service. Every time work is redone, the cost of quality increases. Obvious examples include:

  • The reworking of a manufactured item.
  • The retesting of an assembly.
  • The rebuilding of a tool.
  • The correction of a bank statement.
  • The reworking of a service, such as the reprocessing of a loan operation or the replacement of a food order in a restaurant.

In short, any cost that would not have been expended if quality were perfect contributes to the cost of quality.

Total Quality Costs

As the table below shows, quality costs are the total of the cost incurred by:

MGT510 - Total Quality Management - Lecture Handout 19

User Rating:  / 0


“A company that claims that it cannot standardize and must rely on experience is a company without technology.”

Kaoru Ishikawa

The Total View of Quality

The concept of customer value represents a dramatic improvement over the traditional approach to quality, the “conformance to specified standards” approach. It extends the concept of quality to include user perceptions and use consequences. However, it still falls short of the concept of Total Quality, which stresses the importance of quality in every aspect of an organization.

Perhaps the Japanese best express this broader and more holistic view of quality, Ishikawa states: “Narrowly interpreted, quality means quality of product. Broadly interpreted, quality means quality of work, quality of service, quality of information, quality of process, quality of division, quality of people including workers, engineers, managers, and executives, quality of system, quality of company, quality of objective, etc.’” This view of quality may at first seem to be too idealistic. However, managers who are committed to this view of quality have pragmatic solutions for translating the word “quality” into organizational realities.

As Imai suggests, it all begins with the “quality of people.” He states:

There is very little agreement on what constitutes quality. In its broadest sense, quality is anything that can be improved. When speaking of “quality” one tends to think first in terms of product quality. When discussed in the context of kaizen strategy nothing could be further off the mark. The foremost concern here is with the quality of people. The three building blocks of a business are hardware, software, and “human ware.” Only after human ware is squarely in place should the hardware and software aspects of a business be considered. Building quality into people means helping them become kaizen conscious.

Read more: MGT510 - Total Quality Management - Lecture Handout 19

MGT510 - Total Quality Management - Lecture Handout 20

User Rating:  / 0


Excellence starts with ‘Marketing’

The ‘marketing’ function of an organization must take the lead in establishing the true requirements for the product or service. Having determined the need, marketing should define the market sector and demand. This will determine product or service features such as the grade, price, quality, timings, etc. For example, a major hotel chain, before opening a new hotel or refurbishing an old one, will need to consider its location and accessibility, before deciding whether it will be predominantly a budget, first class, business or family hotel.

Marketing will also need to establish customer requirements by reviewing the market needs, particularly in terms of unclear or unstated expectations or preconceived ideas held by customers. Marketing is responsible for determining the key characteristics which determine the suitability of the product or service in the eyes of the customer. This may, of course, involve the use of market research techniques, data gathering, and analysis of customer complaints.

Excellent communication between customers and suppliers is the key to total organizational excellence. This will eradicate the ‘demanding nuisance/idiot’ view of customers, which pervades some organizations. Poor communications often occur in the supply chain between organizations, when neither party realizes how poor they are. Feedback from both customers and suppliers needs to be improved, where dissatisfied customers and suppliers do not communicate their problems. In such cases non-conformance of purchased products or services is often due to the customer’s inability to communicate their requirements clearly. If these ideas are also used within an organization, then the internal supplier/customer interfaces will operate much more smoothly.

Read more: MGT510 - Total Quality Management - Lecture Handout 20

MGT510 - Total Quality Management - Lecture Handout 21

User Rating:  / 0


For design, development and implementation of a QMS, the ISO 9000 approach is completely compatible with the total quality philosophy, though it is not as all encompassing. ISO 9000 is composed of three standards:

ISO 9000:2000 Quality Management Systems – Fundamentals and Vocabulary
ISO 9001:2000 Quality Management Systems – Requirements
ISO 9004:2000 Quality Management Systems – Guidelines for Performance Improvements

ISO 9001 and ISO 9004 are known as Consistent Pair and are based and follow PDCA methodology. ISO system is about standardizing the approach organizations everywhere take in managing and improving the processes that ultimately result in producing better quality products and services. Specifically, ISO 9001(2000) establishes the requirements for quality management systems (QMS) that must be employed by all organizations registered to the standard. Registered organizations should enjoy:

MGT510 - Total Quality Management - Lecture Handout 22

User Rating:  / 0



The ISO 9000 standards originally were intended to be advisory in nature and to be used for two-party contractual situations (between a customer and supplier) and for internal auditing. However, they quickly evolved into criteria for companies who wished to “certify” their quality management or achieve “registration” through a third-party auditor, usually a laboratory or some other accreditation agency (called a registrar). This process began in the United Kingdom. Rather than a supplier being audited for compliance to the standards by each customer, the registrar certifies the company, and this certification is accepted by all of the supplier’s customers.

The registration process includes document review by the registrar of the quality system documents or quality manual; pre-assessment, which identifies potential noncompliance in the quality system or in the documentation; assessment by a team of two or three auditors of the quality system and its documentation; and surveillance, or periodic re-audits to verify conformity with the practices and systems registered. During the assessment, auditors might ask such question as (using management responsibility as an example): Does a documented policy on quality exist? Have job descriptions for people who manage or perform work affecting quality been documented? Are descriptions of functions that affect quality been documented? Are descriptions of functions that affect quality available? Has management designated a person or group with the authority to prevent nonconformities in products, identify and record quality problems, and recommend solutions? What means are used to verify the solutions?

Read more: MGT510 - Total Quality Management - Lecture Handout 22

MGT510 - Total Quality Management - Lecture Handout 23

User Rating:  / 0


Management Responsibility - Requirements
ISO 9001:2000-Quality management systems -Requirements
Management commitment

Top management shall provide evidence of its commitment to the development and implementation of the quality management system and continually improving its effectiveness by:

  1. Communicating to the organization the importance of meeting customer as well as statutory and regulatory requirements;
  2. Establishing the quality policy;
  3. Ensuring that quality objectives are established;
  4. Conducting management reviews; and
  5. Ensuring the availability of resources.

Needs and expectations of interested parties
Management responsibility – Guidelines
General guidance

Top management should establish policies and strategic objectives consistent with the purpose of the organization. Leadership, commitment and the involvement of the top management are essential for developing and maintaining an effective and efficient quality management system to achieve benefits for all interested parties. The key to achieving benefits for interested parties is to sustain and increase customer satisfaction. The deployment of the policies and implementation of plans to achieve the objectives are the responsibility of management. Management should involve everyone in the organization in these actions. Top management responsibilities include:

Read more: MGT510 - Total Quality Management - Lecture Handout 23

MGT510 - Total Quality Management - Lecture Handout 24

User Rating:  / 0


ISO 9001:2000 – Quality management systems -Requirements
6. Resource management
6.1 Provision of resources

The organization shall determine and provide the resources needed:

  1. To implement and maintain the quality management system and continually improve its effectiveness, and
  2. To enhance customer satisfaction by meeting customer requirement.

6.1 General guidance
6.1.1 Introduction

Resources essential to the implementation and achievement of the organization's strategies and objectives for the quality management system should be identified and made available. These may include people, suppliers, information, infrastructure, work environment and financial resources.

Read more: MGT510 - Total Quality Management - Lecture Handout 24

MGT510 - Total Quality Management - Lecture Handout 25

User Rating:  / 0

ISO 9001(2000) (Clause # 7) Product Realization and Customer Related Processes

ISO 9001:2000 – Quality management systems – Requirements
7 Product realization
7.1 Planning of product realization

The organization shall plan and develop the processes needed for product realization. Planning of product realization shall be consistent with the requirements of the other processes of the quality management system.

In planning product realization, the organization shall determine the following, as appropriate:

  1. Quality objectives and requirements for the product;
  2. The need to establish processes, documents, and provide resources specific to the product;
  3. Required verification, validation, monitoring, inspection and test activities specific to the product and the criteria for product acceptance;
  4. Records needed to provide evidence that the realization processes and resulting product meet requirements

The output of this planning shall be in a form suitable for the organization’s method of operations.

NOTE 1 A document specifying the processes of the quality management system (including the product realization processes) and the resource to be applied to a specific product, project or contract, can be referred to as a quality plan.
NOTE 2 The organization may also apply the requirements given in 7.3 to the development of product realization processes.

Read more: MGT510 - Total Quality Management - Lecture Handout 25

MGT510 - Total Quality Management - Lecture Handout 26

User Rating:  / 0


ISO 9001:2000 - Quality management systems - Requirements
7.5 Production and service operations
7.5.1 Control of production and service provision

The organization shall plan and carry out production and service provision under controlled conditions. Controlled conditions shall include, as applicable.

  1. The availability of information that the characteristics of the product,
  2. The availability of work instructions, as necessary,
  3. The use of suitable equipment,
  4. The availability and use of monitoring and measuring devices,
  5. The implementation of monitoring and measurement, and
  6. The implementation of release, delivery and post-delivery activities.

Read more: MGT510 - Total Quality Management - Lecture Handout 26

MGT510 - Total Quality Management - Lecture Handout 27

User Rating:  / 0


ISO 9001:2000 - Quality management systems - Requirements
8 Measurement, analysis and improvement
8.1 General

The organization shall plan and implement the monitoring, measurement, analysis and improvement processes needed:

  1. To demonstrate conformity of the product,
  2. To ensure conformity of the quality management system, and
  3. To continually improve the effectiveness of the quality management system.

This shall include determination of applicable methods, including statistical techniques, and the extent of their use.

8.1 General guidance

An organization should provide for the measurement and evaluation of its product, the capability of processes, customer satisfaction and items required by other interested parties at appropriate intervals. This includes the recording, collecting, analyzing, summarizing and communication of relevant data needed to monitor and improve the organization's performance.

Read more: MGT510 - Total Quality Management - Lecture Handout 27

MGT510 - Total Quality Management - Lecture Handout 28

User Rating:  / 0

Quality in Software Sector and Maturity Levels

Performance Maturity Levels

The performance maturity levels used by organizations are as follows:

Maturity Performance level Guidance
1 No formal approach No systematic approach evident, no results, poor results or
unpredictable results.
2 Reactive approach Problem- or prevention-based systematic approach;
minimum data on improvement results available.
3 Stable formal system
Systematic process-based approach, early stage of
systematic improvements; data available on conformance to
objectives and existence of improvement trends.
4 Continual improvement
Improvement process in use; good results and emphasized
sustained improvement trends.
5 Best-in-class
Strongly integrated improvement process; best-in-class
bench marked results demonstrated

Software Engineering Institute’s Capability Maturity Model (CMMI) is also a generic model of quality improvement and is focused on processes and systems related to IT/Software sector.

Read more: MGT510 - Total Quality Management - Lecture Handout 28

MGT510 - Total Quality Management - Lecture Handout 29

User Rating:  / 0

Installing an ISO -9001 QM System

ISO 9001’s requirements for quality management systems are also generic in nature, and are applicable to organizations in any industry or economic sector. Whether the organization manufactures a product or provides a service, whether it is a company or a governmental agency, whether it is large or small, ISO 9000 can apply, and be used to advantage. To be registered the organization must go through a process that includes the following steps:

  1. Develop (or upgrade) a quality manual that describes how the company will assure the quality of its products or services.
  2. Document procedures (or upgrade existing documentation) that describe how the various processes for design, production, continual improvement, and so forth, will be operated. This must include procedures for management review/audits and the like.
  3. The organization must provide evidence of top management’s commitment to the QMS and its continual improvement.
  4. The organization’s top management must ensure that customer requirements are determined and met.
  5. The organization must hire an accredited registrar company to examine its systems, processes, procedures, quality manual, and related items. If everything is in order, registration will be granted. Otherwise, the registrar will inform the company of which areas require work (but will not inform the company specifically what must be done), and a second visit will be scheduled.
  6. Once registration is accomplished, the company will conduct its own internal audits to ensure that the systems, processes, and procedures are working as intended.
  7. Also once registered, the outside registrar will make periodic audits for the same purpose. These audits must be passed to retain registration.

An important point to understand about ISO 9000 is that the organization has to respond to all ISO 9000 requirements and tell the registrar specifically what it is going to do and how. ISO does not tell or advise the organization. Assuming the registrar agrees with the organization’s plan, registration is awarded. To retain that registration, the organization must do what it said it would do.

Read more: MGT510 - Total Quality Management - Lecture Handout 29

MGT510 - Total Quality Management - Lecture Handout 30

User Rating:  / 0

Creating Business Excellence

Before we look at excellence models, let us see why sometime these initiatives fail.

There are many reasons for Quality Programs failures, including the following:

  • The efforts were too narrowly focused, as with statistical applications on the shop floor.
  • The efforts were mis-focused, limited to improving only “quality of work life” issues for employees rather than also addressing issues of strategic concern.
  • The managers relied on traditional methods and assumptions, ad were not equipped with the right tools, techniques, and theory to improve quality.
  • The managers were too focused on tools and techniques, and did not understand how to transform themselves, their employees, and the organization.
  • The managers were too impatient, with a short-term focus, and unwilling to stay the course, overcome initial barriers, and wait for long-term gains.
  • The managers never care for the culture change in organization.

Read more: MGT510 - Total Quality Management - Lecture Handout 30

MGT510 - Total Quality Management - Lecture Handout 31

User Rating:  / 0

Creating Quality at Strategic, Tactical and Operational Level

In 1950 Deming drew the following picture on a blackboard for a handful of Japanese executives:

design and redesign

p>Many people see this as simply a diagram of a typical Production or Operation System that is linked to customers and suppliers. Visionaries in the practice of TQ see this as a new model of an organization chart from a strategic perspective.

Read more: MGT510 - Total Quality Management - Lecture Handout 31

MGT510 - Total Quality Management - Lecture Handout 32

User Rating:  / 0

Big Q and Small q Leadership for Quality

Big Q and Small q:

Dr. Juran contrasted the difference between managing to achieve Quality across the Board, in all functions of the organization, and for all the products and services (Big Q) with managing for quality on a limited basis (Little or Small q). Quality Control and inspection activities are little or Small q. Quality Assurance may be Big Q or Small q depending upon how it functions within an organization and Total Quality efforts known as efforts for Big Q. Quality is strategic and requires leadership in all functions and across organization.

Leadership for Quality:

Leadership is fundamental to management and organizational behavior and is on just about everyone’s short list of prerequisites for organizational success. Thus it is not surprising that leadership plays a crucial role in the total quality organization. Virtually every article and book written about quality emphasizes leadership. “Teach and institute leadership” is one of W.E. Deming’s 14 Points. Leadership is the first category in the Malcolm Baldrige National Quality Award and is recognized as the “driver” of successful quality systems.

Read more: MGT510 - Total Quality Management - Lecture Handout 32

MGT510 - Total Quality Management - Lecture Handout 33

User Rating:  / 0

Strategic Planning for Quality and Advanced Quality Management Tools

A firm has many options in defining its long-terms goals and objectives, the customers it wants to serve, the products and services it produces and delivers, and the design of the production and service system to meet these objectives. Strategic planning is the process by which the members of an organization envision its future and develop the necessary procedures and operations to carry out that vision. Strategy – the result of strategic planning – is the patter of decisions that determines and reveals a company’s goals, polices, and plans to meet the needs of its stakeholders. An effective strategy allows a business to create a sustainable competitive advantage.

Total quality relates to strategic management in that it enhances an organization's ability to gain a sustainable competitive advantage in the marketplace. Handled properly total quality can be the most effective cost leadership and/or differentiation strategy an organization can adopt. This is because the total quality approach is the best way to continually improve efficiency and cut costs throughout an organization's activity-cost chain, while simultaneously continually improving the features of the product or service that differentiates it in the marketplace. Total quality can also improve an organization's chances of becoming a leader in a given market niche.

Read more: MGT510 - Total Quality Management - Lecture Handout 33

MGT510 - Total Quality Management - Lecture Handout 34

User Rating:  / 0

Hoshin Kanri and Strategic Policy Deployment

Strategy Implementation:

Top management requires a method to ensure that their plans and strategies are successfully executed (the term “deployed” is frequently used) within the organization. The Japanese deploy strategy through a process known as Hoshin Planning, or Policy Deployment. Hoshin means policy or policy deployment. Policy deployment is a systems approach to managing change in critical business processes. It emphasizes organization-wide planning and setting of priorities, providing resources to meet objectives, and measuring performance as a basis for improving performance. Policy deployment is essentially a TQ-based approach to executing a strategy. King describes it eloquently.

Imagine an organization that knows what customers will want five to ten years from now and exactly what they will do to meet and exceed all expectations. Imagine a planning system tat has integrated [Plan, Do, Check, Act] language and activity based on clear, long-term thinking, a realistic measurement system with a focus on process and results, identification of what’s important, alignment of groups, decisions by people who have the necessary information, planning integrated with daily activity, good vertical communication, cross-functional communication, and everyone planning for himself or herself, and the buy-in that results. That is Hoshin Planning.

Read more: MGT510 - Total Quality Management - Lecture Handout 34

MGT510 - Total Quality Management - Lecture Handout 35

User Rating:  / 0

Quality Function Deployment (QFD) and other Tools for Implementation

Tools for Quality Planning:

Customer’s needs and expectations drive the planning process for products and the systems by which they are produced. Marketing plays a key role in identifying customer expectations. That is what is known Voice of Customer in QFD or WHAT in a simple Matrix Diagram. Once these are identifies, managers must translate them into specific products and service specifications that manufacturing and service delivery processes of the organizations (Voice of Process in QFD or HOW in Matrix Diagram) must meet. In some cases the product or service that customers receive is quite different from what they expect. It is management’s responsibility to minimize such gaps. Firms use several tools and approaches to help them focus on their external and internal customers.

Matrix Diagram: These are spreadsheets that graphically display relationships between characteristics, functions, and tasks in such a way as to provide logical connecting points between each item. QFD is one of many matrix diagrams now used for planning and quality improvements.

Read more: MGT510 - Total Quality Management - Lecture Handout 35

MGT510 - Total Quality Management - Lecture Handout 36

User Rating:  / 0

Basic SQC Improvement Tools

Tools for Continuous Improvement:

Many tools have been created or adapted from other disciplines (such as: operations research and industrial engineering) to facilitate the process of continuous improvement. Here we learn the most common ones used in quality improvement applications.

One of the basic tenets of total quality is management by facts. Management by facts requires that each decision, each solution to a problem, is based on relevant data and appropriate analysis. Problem solving and decision making are fundamental to total quality. On the one hand, good decisions will decrease the number of problems that occur. On the other hand, the workplace will never be completely problemfree.

Once we get beyond the very small business (in which the data are always resident in the few heads involved, anyway), most decision points and problems will have many impacting factors, and the problem's root cause or the best-course decision will remain obscure until valid data are studied and analyzed. Collecting and analyzing data can be difficult. The total quality tools use will assure better decision making, better solutions to problems, and even Improvement of productivity and products and services.

Read more: MGT510 - Total Quality Management - Lecture Handout 36

MGT510 - Total Quality Management - Lecture Handout 37

User Rating:  / 0

How Quality is implemented? A dialogue with a Quality Manager

After listening to the discussion on quality in Pakistan, we are happy that Pakistani managers are as concerned about quality in their companies as any country in the world. The globe is approachable by every customer now and we need to understand that a competitor can emerge from any where in the world over night.

Post WTO and internet based economy era put a lot of pressure on mangers to deal with customers of 21st century, who are more aware and are more demanding and want innovation their products or services and also at lower price.

Read more: MGT510 - Total Quality Management - Lecture Handout 37

MGT510 - Total Quality Management - Lecture Handout 38

User Rating:  / 0

Cause and Effect Diagram and other Tools of Quality


Variation in a process always exists and generally displays a pattern that can be captured in a histogram. A histogram is a graphical representation of the variation in a set of data. It shows the frequency or number of observations of a particular value or within a specified group.

Histograms provide clues about the characteristics of the population from which a sample is taken. Using a histogram, the shape of the distribution can be seen clearly, and inferences can be made about the population. Patterns can be seen that would be difficult to see in an ordinary table of numbers. The check sheet below was designed to provide the visual appeal of a histogram as the data are tallied. It is easy to see how the output of the process varies and what proportion of output falls outside of any specification limits.

Read more: MGT510 - Total Quality Management - Lecture Handout 38

MGT510 - Total Quality Management - Lecture Handout 39

User Rating:  / 0

Statistical Process Control (SPC) for Continual Quality Improvement


In a total quality setting, consistency and predictability are important. When a process runs consistently, efforts can begin to improve it by reducing process variations, of which there are two kinds:

  • Common-cause variation is the result of the sum of numerous small sources of natural variation that are always part of the process.
  • Special-cause variation is the result of factors that are not part of the process and that occur only in special circumstances, such as a shipment of faulty raw material or the involvement of anew, untrained operator.

The performance of a process that operates consistently can be recorded and plotted on a control chart such as the one in Figure below. The sources of the variation in this figure that fall within the control limits are likely to be common causes. The sources of variation in this figure that fall outside the control limits are likely to be special-causes sources. In making decisions about the process in question, it is important to separate common and special causes of variation.

Read more: MGT510 - Total Quality Management - Lecture Handout 39

MGT510 - Total Quality Management - Lecture Handout 40

User Rating:  / 0

Statistical Process Control….Contd.

SPC learning through examples:

Example # 1 Shooting for Quality:

Mr. Khan observed that in basketball games, his son Ali’s free throw percentage averaged between 45 and 50 percent.
Ali’s process was simple: Go to the free throw line, bounce the ball four times, aim, and shoot. To confirm these observations, Ali shot five sets of 10 free throws with an average of 42 percent, showing little variation among the five sets.
Mr. Khan developed a Cause-and-Effect Diagram to identify the principal cause/s. After analyzing the diagram and observing his son’s process, he believed that the main cause was not standing in the same place on the free-throw line every time and having an inconsistent focal point. They developed a new process in which Ali stood at the centre of the line and focused on the middle of the front part of the rim. The new process resulted in a 36 percent improvement in practice. Toward the end of the 2004 season, he improved his average to 69 percent in the last three games.

Read more: MGT510 - Total Quality Management - Lecture Handout 40

MGT510 - Total Quality Management - Lecture Handout 41

User Rating:  / 0

Building Quality through SPC

Statistical Process Control

  • Capable processes also must be controlled
  • SPC distinguishes 2 types of variability
    • Normal (Random) Variability
    • Abnormal (Structural) Variability

SPC requires the use of Statistics

MGT510 - Total Quality Management - Lecture Handout 42

User Rating:  / 0

An interview Session with Officers of a CMMI Level 5 Quality IT Pakistani Company

In this session you will meet the CEO of a Pakistani IT company. He will share how the policy decision was taken to move on the journey of quality in the software development process. It took several years of time, dedicated efforts of the team and leadership commitment along with financial investment. As you will hear, they were confident of their return on the investment in improvement of quality of their products and greater satisfaction of their customers with a confidence that they can do better and better and Pakistani managers/engineers are no less than any other country when it comes to making it possible.

Read more: MGT510 - Total Quality Management - Lecture Handout 42

MGT510 - Total Quality Management - Lecture Handout 43

User Rating:  / 0


The Importance of Teams in TQ

Teams are everywhere in TQ organizations: at the top and bottom and in ever function and department in between. Why are there so many teams? The TQ philosophy recognizes the interdependence of various parts of the organization and uses teams as a way to coordinate work. Teamwork enables various parts of the organization work together in meeting customer needs that can seldom be fulfilled by employees limited to one specialty. Teams promote equality among individuals, encouraging a positive attitude and trust. The diversity inherent in tams often provides unique perspective on work, spontaneous thought, and creativity. In addition, teams develop a greater sense of responsibility for achieving goals and performing tasks. In short, teams provide a variety of benefits that are not derived from individuals working alone. TQ organizations recognize that the potential contributions of employees are much greater than in the traditional organization, and teams are an attempt to take advantage this potential. Further, the competitive environment of modern business requires flexible, fast reaction to changes in customer demands or technological capacity. Teams can provide the capacity for rapid response.

Read more: MGT510 - Total Quality Management - Lecture Handout 43

MGT510 - Total Quality Management - Lecture Handout 44

User Rating:  / 0


Introduction to Empowerment

Empowerment means giving someone power-granting the authority to do whatever is necessary to satisfy customers, and trusting employees to make the right choices without waiting for management approval. By empowering employees, organizations drive decision making down to its lowest possible level. Empowerment allows organizations to flatten their organizational structure because fewer managers are needed to “direct and control” employees. Many companies have found that giving people throughout the organization the power to make a difference contributes greatly to providing quality products and services to their customers. The need to empower the entire workforce in order for quality to succeed has long been recognized, even if it is only recently coming into practice. Five of Deming’s 14 Points relate directly to the nation of empowerment.

Point 6: Institute training
Point 7: Teach and institute leadership
Point 8: Drive out fear. Create trust. Create a climate for innovation
Point 10: Eliminate exhortations for the workforce.
Point 13: Encourage education and self-improvement for everyone

Read more: MGT510 - Total Quality Management - Lecture Handout 44

MGT510 - Total Quality Management - Lecture Handout 45

User Rating:  / 0


The Importance of Customers in CSR:

The importance of customers has evolved over the years, from a view of the customer as a buyer to increase profitability, to a view of the customer as an active partner and the focus of all quality activities. Customer satisfaction translates directly into increased profits. However, while satisfaction is important, modern firms need to look further. Achieving strong profitability and market share requires loyal customers-those who stay with a company and make positive referrals. Poor-quality products and services, on the other hand, lead to customer dissatisfaction in the form of complaints, returns, and unfavorable word-of-mouth publicity. Dissatisfied customers purchase from competitors. One study found that customers are five times more likely to switch because of perceived service problems than for price concerns or product quality issues. Studies have also shown that dissatisfied customers tell at least twice as many friends about bad experiences than they tell about good ones. For many companies, “The Customer Comes First” is a guiding principle. It is impossible to overstate the importance of customers to TQ. Customers are at the very center of every TQ activity, and devotion to satisfying them is the first principle of TQ. Customers are recognized as the guarantee of the organization’s continued existence. Therefore, a focus on customers, rather than internal issues, is the foundation of the TQ approach to management.

Read more: MGT510 - Total Quality Management - Lecture Handout 45