TQM

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Total Quality Management Prof. V. P. Arora Associate Professor

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Definition of Total Quality Management (TQM) Total Quality Management (TQM) is an enhancement to the traditional way of doing business. It is a proven technique to guarantee survival in world-class competition. Total – Made up of the whole. Quality – Degree of excellence a product or service provides. Management – Act, art, or manner of handling, controlling, directing etc.

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TQM Managing the entire organization so that it excels in all dimensions of products & services that are important to the customer Philosophical Element Generic Tools Tools of Q.C Deptt. Customer Driven quality Leadership Continuous improvement Employee participation & development Quick response Design quality & prevention Management by fact Partnership development Corporate responsibility & citizenship SPC Tools Process flow charts Check sheets Pareto analysis & histogram Cause & effect (or fish bone) diagrams Run charts Scatter diagrams Control charts Quality function deployment SQC Methods Sampling plans Process capability Taguchi Methods Elements of Total Quality Management SPC = statistical process control

Pareto Analysis: 

Pareto Analysis Pareto was an Italian economist who discovered a universal relationship between value and quantity. He used this technique for assessing uneven distribution of wealth. Pareto analysis helps in identification of the “vital few” from the “trivial many” at a glance. Pareto diagram is drawn after data collection for two purposes as follows: Differentiating the ‘major factors’ that contribute the most to the unsatisfactory situation, from other ‘trivial factors’. Tackling the major factors responsible for any problem.

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The use of Pareto Charts have given rise to the “80-20 rule” which suggests that 80 per cent of an organisation’s problems come from 20 per cent of its tasks. A Pareto Diagram can be constructed using the following steps: Use a checklist or brainstorm to obtain data. Arrange the data in descending order starting from the largest category to the smallest. Calculate the total. Compute the percentage of the total that each category represents. Compute the cumulative percentages. Scale the vertical axis for frequency from zero to hundred. From left to right construct a bar for each category with height indicating the frequency. Start with the largest category and add them in descending order (combine the categories containing the fewest items into an “other” category and put it on the extreme right as the last bar). Draw a vertical scale on the right and add a percentage (0 to 100 per cent) scale. Plot a cumulative percentage line.

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Invoicing Quality Personnel Delivery Packaging performance Cumulative Customer Complaints Trivial many 38 % 61 % 81 % 96 % 100 75 50 25 0 100 % 80% 75 % 50% 25% 0 Critical few a b c d e Pareto Diagram for Customer Complaints

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For example, Pareto analysis can be carried out for the problems of a company, which are contributed by the following: Working systems (50%) Operating costs (30%) Facilities (10%) Manpower (10%)

Cause and effect Diagram: 

Cause and effect Diagram The cause and effect diagram is an investigative tool. This is also called Ishikawa Diagram . Because of its shape, the diagram is also termed as Fishbone Diagram. There is a systematic arrangement of all possible causes which give rise to the effect in Ishikawa diagram. Before taking up problem for a detailed study, it is necessary to list down all possible causes through a brainstorming session so that no important cause is missed. The causes are then divided into major sources or variables.

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People Method Products not as per customer’s requirements Material Machines Lack Training Wrong Jobs assigned Manual Work Price setting not proper Faulty material Price very high Fault in setting Ill maintained Cause and Effect Diagram

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The objective of a cause and effect diagram is to cure the causes and not merely list the symptoms. There are four key steps in constructing a cause and effect diagram: Begin by agreeing on the effect (problem statement) Generate the causes by checklist data or brainstorming Place the problem statement in a box category and add brainstormed ideas. For each cause, ask why does this happen? Identify the root or most basic causes of the problem by finding the factors that are repeated. Collect additional data to verify the relationship of cause and effect.

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Basic Approach of TQM requires six basic concepts : A committed and involved management to provide long-term, top-to-bottom organizational support. An unwavering focus on the customer, both internally and externally. Effective involvement and utilization of the entire work force. Continuous improvement of the business and production process. Treating suppliers as partner. Establish performance measures for the processes. These concepts outline an excellent way to run an organization.

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The Dimensions of Quality Dimension Meaning and Example Performance Primary product characteristics, such as the brightness of the picture Features Secondary characteristics, added features, such as remote control Conformance Meeting specifications or industry standards, workmanship Reliability Consistency of performance over time, average time for the unit to fail Durability Useful life, includes repair Service Resolution of problems and complaints, ease of repair Response Human-to-human interface, such as the courtesy of the dealer Aesthetics sensory characteristics, such as exterior finish Reputation Past performance and other intangibles, such as being ranked first

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ISO – 9000 SERIES ISO 9000 is a series of standards agreed upon by the international organization for standardization (ISO) and adopted in 1987. More than 100 countries now recognize the 9000 series for quality standards and certification for international trade. In Europe & European common market (ECM) alone, more than 50,000 companies have certified as complying with these standards. All companies having international trade will have to adopt these standards eventually. THE ISO 9000 SERIES ISO 9000 consists of five primary parts numbered as 9000 through 9004

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ISO 9002 Design Development Procurement Production Installation Servicing ISO 9001 ISO 9003

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QUALITY SYSTEM – ISO Guide line for Use: 9000 : Quality management & quality assurance standards- guidelines for selection & use. 9004 : Quality management & quality system elements – guidelines Quality system 9001 : Model for quality assurance in design, production, installation & servicing. 9002 : Model for quality assurance in production & installation. 9003 : Model for quality assurance in final inspection test. ISO certification can take from 3 to 6 months to as long as two years if top management is not fully committed. Certification involves getting the proper documents, initiating the required procedures & practices and conducting internal audits.

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There are three forms of certification. First Party : A firm audits itself against ISO 9000 standards Second Party : A customer audits its supplier Third Party : A “Qualified” national or international standards or certifying Agency serves as auditor The best certification is by a third party and once passed, the firm can be registered & recorded as having achieved ISO 9000 status. ISO specifies the way the firm operates as well as its quality standards, delivery times, service levels & so on. If a manufacturer wants to purchase, he can either visit / audit the supplier but it is always easier, cheaper, quicker & legally safer to select certified supplier

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Benefits from ISO-9000 ISO 9000 certification has become the de-facto minimum requirement for those wishing to compete globally All actions in preparing for ISO certification & in maintaining the certification would result in streamlining of quality management system which may lead to improvements in product quality. It can also lead to significant cost reductions through reduction in rework, warranty work, repair, scrap, etc ISO 9000 lays stress on customer orientation. This would result in better overall results for the company in addition to improving customer relations. There may be an impetus to improve employee relations, employee empowerment and

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The 20 Elements to be addressed in an ISO 9000 Quality System Management Responsibility quality system contract review design control document control Purchasing Customer-Supply Material Product Identification and Traceability Process Control Inspection and Testing

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Inspection, Measuring, and Test Equipment Inspection and Test Status Control of Nonconforming Product Corrective Action Handling, Storage, Packaging, and Delivery Quality Records Internal Quality Audits Training Servicing Statistical Techniques

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Difference between ISO 9000 and TQM ISO 9000 Not necessarily customer focused. Not integrated with corporate strategy. Technical systems and procedures focused. Employee involvement is not necessary. No focus on continuous improvement in ISO 9000 – it is a decision Can be departmentally focused. Quality department responsible for quality. More likely to preserve the status quo. Three-step maxim of ISO 9000 is: ( i ) document what you do, (ii) do only what you document and (iii) demonstrate that you have done it, by documentary proof. ISO 9000 are technical and physical systems and standards. TQM Definitely customer focused. Integral to company strategy. Philosophy, concepts, tools and techniques focused. Emphasis is on employee involvement and empowerment. Continuous improvement and TQM is a never-ending journey. Organization-wide focus on all departments, functions and levels. Everyone is responsible for quality. Involves process and culture change. Customer satisfaction and economic cost are TQM two distinguishing features. TQM is a philosophy where the approach is behavioral and human.

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Quality Function Deployment (QFD) QFD is a systematic and organized approach of taking customer needs and demands into consideration while designing new products and services or while improving the existing products and services. Some experts also call it as customer driven engineering because the voice of the customer is diffused throughout the product (or service) development life cycle. These needs are deployed into design requirements and subsequently through the manufacturing chain of critical part characteristics and key process requirements . Finally, these needs are deployed in operational specifications.

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Benefits of QFD The major benefits of QFD are meeting and exceeding customer satisfaction and thus obtaining higher market share and profits. QFD minimizes the later engineering changes and results in better quality Customer complaints about and dissatisfaction with new products decrease with passage of time. QFD applies a cross-functional approach breaking communication walls amongst departments of a company. Develop a deeper understanding of customer needs and have the customer’s voice into the business for making trade-offs, resulting in superior decisions for the organization. Streamlining of processes helps in elimination of many internal processes that do not add value.

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QFD helps in evaluating customer needs with respect to competitive products and services. It provides opportunities for introducing new products. QFD provides an excellent framework for cross-functional deployment of quality, cost and delivery. QFD by collecting and analyzing latest information on a continuous basis allows for quick changes in product development process. QFD provides a much needed horizontal weave across the organization which in turn helps in smooth propagation of TQM. In the most Indian companies, this horizontal weave is missing in the current traditional management hierarchy because these organizations are managed vertically. The shorter product/service development cycle and higher productivity are the main merits of QFD.

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TQM GURUS A TQM Guru is an expert thinker who communicates his thoughts through verbal and written expressions and thus contributes to the field of TQM. Starting just after World War II a number of philosophers and thinkers have made their contributions to the movement of “Total Quality Management”. In the summer of 1985 the name “Total Quality Management” was first suggested by Nancy Warren, a behavioural scientist in the US Navy, thereafter, a number of TQM Gurus have made their significant contributions. Many of the TQM Gurus are Americans and a very few of them have their origin in Japan. Some of the major contributors towards the thought of TQM are:

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W. Edwards Deming, Joseph M.Juran, Philip B.Crosby, Armand V.Feigenbaum, Bill Conway, Kauru Ishikawa, GenichiTaguchi Shigeo Shingo, W.G. Ouchi, Vilfredo Peters, Tom Peters, S.R.Udpa, Stephen Covey, and J.S. Oakland.

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PHILOSOPHIES OF QUALITY GURUS The customers of today are very different compared to yester years. Today the customer is demanding quality in product, in services, in life, in everything. Only those companies that upgrade to global standards will survive. There are many theories propagated by quality experts. Deming’s approach to TQM Deming is among the pioneers of the TQM concept. His views on improving quality contains fourteen points approach as given below:

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Aim at creating consistency of purpose for improving services and products Aim at adopting the new philosophy for making the accepted levels of defects, delays, or mistakes unwanted. Aim to stop reliance on mass inspection as it neither improves nor guarantees quality (The team work between the firm and its supplies is the way for the process of improvement.) Try to stop awarding business with respect to the price. Aim to discover problems. Management must work continually to improve the system Aim to take advantage of modern methods used for training. In developing a training program, take into consideration such items as

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Aim to institute modern supervision approaches. Aim to eradicate fear so that everyone involved may work to his or her full capacity. Aim to tear down department barriers so that everyone can work as a team member Try to eliminate items such as goals, posters, and slogans that call for new productivity levels without the improvement of methods. Aim to make your organization free of work standards prescribing numeric quotas. Aim to eliminate factors that inhibit employee workmanship pride. Aim to establish an effective education and training program. Establish ways to develop a program that will push the above 13 points every day for new ending improvement.

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PhilipB. Crosby “Quality is free” declares Philip Crosby. He continues to believe that quality means getting it right the first time, rather than merely laying down acceptable levels of quality. The 14 steps of quality improvement declared by Crosby are: Make it clear that management is committed to quality. [Key: management Commitment.] Form quality improvement teams with representatives from each department [Key: Quality improvement] Determine where current and potential quality problems lie [Key: Quality measurement] Evaluate the cost of quality and explain its use a s a management tool. [Key: Cost of Quality] Raise the quality awareness and personal concern of all employees. [Key: Quality awareness] Take actions to correct problems identified through previous steps [Key: Corrective action]

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Establish a committee for the zero defects programme. [Key: Zero Defect Planning] Train supervisors to actively carry out their part of the quality improvement programme. [Key: Supervisor training] Hold a ‘zero defects day’ to let all employees realize that there has been a change. [Key: ZD day] Encourage individuals to establish improvement goals for themselves and their groups [Key: Goal setting] Encourage employees to communicate to management the obstacles they face in attaining their. [Key: Error-cause removal]

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Joseph M, Juran Juran advocated ten steps to quality improvement Start with building awareness of the need and opportunity for improvement. set realistic goals for improvement Organize to reach the goals (by methods to establish a quality council, identify problems, select Projects, appoint teams, designate facilitators). Emphasis on training Solve problems by carrying out projects Progress must be reported Give recognition to any body who achieves Communicate results with all concerned Keep score by being quantitative Maintain a regular momentum by making annual improvement part of the systems and processes of the company

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Phase Focus Inspection Detection and segregation of defectives Sampling schemes Economy and efficiency Quality control Prevention of sub-standard and economic manufacture SPC Use of statistical concepts SQC Methods for efficiency and economy QC Teams Investigation and resolution of quality problems Quality Assurance Customer satisfaction using systems approach, quality policy, objectives planning and audit jointly in the case of organized/dominant customers Vender Quality Assurance Ensuring manufacture and supply of required quality product Evolutionary Phases of Quality Activity Focus

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Quality Engineering Robust products at commensurate cost through product design and process engineering TQC Coordination to make all functional groups of an organization to discharge their responsibilities towards product quality Self-control Integration of quality related tasks with the jobs QC education & training Performance of the job right the first time and every time CWQC Consumer oriented quality control participation by employees at all levels of improvements Quality circles and Self-directed Teams Participation of employee teams in improvement of quality, cost, productivity, work life, etc. in their work areas TQM Continuous improvement all around including environment, work life, quality, cost schedules, etc. Steering Council Top managers leadership and participation Policy management/and deployment Regular activities to reflect policies QFS, Taguchi methods, and Design of Experiments Customer delight to add value over and above consumer needs HRD Enable employees perform their roles well in spite of swift changes taking place all around-technology, organization, environment, society, etc. Quality Audits Top management to gain first-hand knowledge of practices

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CONCEPT OF KAIZEN Imai has brought together various management theories, philosophies and tools that have been popular in Japan over the years, as a single concept, Kaizen . There are many quality experts, whose principles formed the basis of the Kaizen concept. Kaizen means continuous improvement involving everybody. The philosophy advocates on-going improvement, not only in one’s working life, but also in personal life, home life and social life. The term Kaizen originates from the Japanese words, ‘Kai’ that means change, whereas, ‘zen’ means for the better, therefore, it means ‘change for the better’. It signifies constant and gradual improvement, no matter how small it is. It should be taking place all the time in every process, involving everyone from all the ranks of management and the workforce. In brief, the system includes :

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Total employee involvement starting from top management; Empowering people; Listening to them; Promoting zero investment improvements; and Focus on efforts rather than results in Kaizen evaluation and performance appraisal. The four phases of Kaizen are: Motivation management; Human resource development; Improvement; and Institutionalization. The Kaizen umbrella, as shown in Figure is quite comprehensive. It is not any one technique rather a philosophy of continuous quality improvement.

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KAIZEN Kanban Quality improvement Just in time Zero-Defect Small Group Activities Cooperative Labour - Management Relation Productivity Improvement Customer orientation TQM Robotics Quality Circles Suggestion schemes - T PM ISO: 9000 Standards TPM=Total Preventive Maintenance

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COST OF QUALITY The cost of quality (COQ) is defined as the sum of the costs of everything that would not have been necessary if everything else was done right the first time. Types of quality costs The cost of quality (COQ) can be classified into three major categories as given below: Cost of conformance, Cost of non-conformance, Basic operational costs.

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Cost of Conformance (COC) Cost of conformance (COC) is the cost which an organization incurs in meeting the requirements of its customers. A strong element of this cost is the money that a company spends on the product for preventing it form going wrong or checking the product right before it reaches the customer. Cost of Non-conformance (CONC) The cost of non-conformance (CONC) to customer requirements are the failure costs. These costs are incurred by a company in repairing what has gone wrong during manufacturing. Basic Operational costs (BOC) The basic operational costs (BOC) are those costs which an organization cannot avoid encountering during the normal performance of its business.

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Heightened Efficiency Improved Customer Satisfaction Lower Operating Cost Cost of Non-Conformance (CONC) Cost of Conformance (COC) Cost of Qualify (COQ) Cost of Quality Reduced Basic Operating Cost (BOC) Benefits of Reducing the Cost of Quality If all the three categories of costs are systematically reduced, several benefits can accrue to the company.

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ANOTHER METHOD TO MEASURE COST OF QUALITY: This analysis is based on following assumptions: That failures are caused That prevention is cheaper That performance can be measured Four Types of costs: 1. Appraisal costs The costs of inspection, testing & other tasks to ensure that the product or process is acceptable. 2. Prevention costs The sum of all costs to prevent defects such as: Identify cause of defect Implement corrective action to eliminate the cause To train personnel To re-design product or system. New equipment or modifications.

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Internal failure costs The cost of defects incurred within the system: Scrap Re-work Repair External failure costs The costs of defects that pass through the system: Customer warranty replacements Loss of customer or goodwill Handling complaints Product repair

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The rule of thumb says that for every rupee spent in prevention, we can save ten rupees in failure & appraisal costs. Often, increases in productivity occur as a by – product of efforts to reduce the cost of quality. BENCH MARKING “If you know your enemy and know yourself, you need not fear the result of a hundred battles.” According to Kehoe (1996) benchmarking can be defined as “measuring the performance of processes within your organization, comparing these performance levels with the best in class companies and where deficiencies exist, using the information on the best practices to improve your organisation’s own business processes.”

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David Kearns defines benchmarking “as the continuous process of measuring products, services and practices against the toughest competitors or those companies recognized as industry leaders.” There are several considerations in this definition Continuous process. Measuring. Products, services and practices. Companies renowned as industry leaders

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Benefits of Benchmarking Best practices from any industry to be creatively incorporated into the processes of the benchmarked function. Identify a technological breakthrough It permits the individuals to broaden their background and experience. It helps in meeting more effectively the end-user or customer requirements. It supports in establishing goals (target setting) based on a concerted view of external conditions. It helps in determining true measures of productivity and effectiveness. It assists in attaining a competitive position. It helps in becoming aware of and searching for industry’s best practices. Benchmarking allows individuals to see “outside the box”. It provides for accelerating change and managing change.

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Pitfalls of Benchmarking Statistics show that 70 percent of all process improvement initiatives fail. The most common reasons of these failures are: Lack of focus and priority; Lack of strategic relevance; Lack of leadership; Lack of perseverance; and Lack of planning.

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Obstacles to Benchmarking The following are the most typical causes and obstacles preventing the smooth and fast implementation of benchmarking practices: Management not “buying into” the idea. No clear “owner” of the programme. Failure to consider customer-requirements. Change of sponsor before completion of the programme. Programme taking too long and leading to loss of interest. Not involving right staff in the programme. Team not measuring issues it agreed to address. Programme causing too much disruption of work and not seen relevant to work. Conflicting objectives of the organization and those of its benchmarking partners.

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Objectives of Benchmarking The following are the three main objectives of benchmarking; It aims at a goal setting process to facilitate comparison with the best. It aims at motivating and stimulating company employees by continuously working for improved performance and turn their entire energy towards single focus. It aims at external orientation of the company.

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Continuous Improvement (CI) Continuous improvement (CI) is a management philosophy that approaches the challenge of product and process improvement as a never-ending process of achieving small wins. It is an integral part of a total quality management system. Continuous improvement seeks continual improvement of machinery, materials, labor utilization, and production methods through application of suggestions and ideas of team members. Though pioneered by U.S. firms, this philosophy has become the cornerstone of the Japanese approach to operations. Although management in both Japan and the West historically have implemented CI in manufacturing plants, it has become quite common in services as well.

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The Key features of continuous improvement strategies are: Accountability is built in. Incorporation of systematic learning (e.g., plan, do, check, act). Decisions based on facts. Diagnostic and remedial journey. Involvement of everyone within an organization. Linkage of improvement activity with organizational goal. Processes are divided into clear deliverables. Consideration of several solutions before implementing the best.

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Tools & Procedures of CI Varies from simple suggestion system based on brain storming to structured programmes utilizing statistical process control tools (SPC Tools) Deming wheel (PDCA) cycle Zero defect concept Bench Marking Six sigma SPC Tools (Also known as Tools of TQC) Stratification Check Sheet Process flow chart Pareto analysis Run chart Histogram Scatter diagram Causes & effect diagram (Fish Bone /Ishikawa Diagram) Control charts

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Deming wheel (PDCA cycle) Another Tool is PDCA cycle: P= Plan D=Do C=Check A=Act It is often called Deming wheel

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Pareto diagrams Scatter diagrams Runcharts Control charts Implement recommendations Define process & problems Group & Value Collect Data 2. Do 3.Check 4.Act 1. Plan Flow Chart Cause & effect Define Problem Suggest possible causes Deming Wheel

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‘PLAN’ PHASE (Also Known As Theme) In this Phase, specific problem is identified and analysis is done using 5W2H Method 5W = - WHAT - WHY - WHERE - WHEN - WHO 2H = - HOW - HOW MUCH ‘DO’ PHASE: Is implementing the change - Should be done in a small scale first ‘CHECK’ PHASE: Deals with evaluating data collected during the implementation Compare original goal vs. actual results ‘ACT’ PHASE: Improvement is codified as the new standard procedure & replicated in similar processes throughout the organization.

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Bench – Marking For CI Bench – Marking is to find out what industry competitors & excellent performers are doing; find out the best practices that lead to superior performance & see how it can be implemented The Shingo system – Fail safe design Two aspects: Single minute exchange of die (SMED)-procedures to accomplish drastic cut in set-up times Use of source inspection and the poka-yoke system to achieve zero defects. (poka-yoke = fail safe procedures) Shingo argued that SQC methods do not prevent defects. The way to prevent defects from coming out at the end of the process is to introduce controls within the process. Inspection should be on 100% items of three types. Successive check inspection By next person or group leader Self - Check By individual worker who produces the product. Source Inspection Worker checks for the errors that will cause defects.

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POKA-YOKE (Fail Safe Procedures) All three types of inspections described above rely on controls consisting of Fail – Safe Procedures of devices called POKA-YOKE. POKA-YOKE includes such things as Chick –Lists or special tooling that Prevents the worker from making an error that leads to a defect before starting a process. Gives rapid Feed – Back of abnormalities in the process to the worker in time to correct it.

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QUALITY CIRCLES A quality circle is a group of employees from the same work area and doing similar type of work voluntarily meet for an hour periodically either every week or fortnightly to identify and analyze Quality of work they perform Working conditions The common number of employees for a quality circle group is about 8-10 individuals. Pre-Requisites for successful quality circles Members of Quality circles must have prior training in problem solving Top management support/attitude Actual implementation to be pre-ceded by carefully developed plan for maximum returns.

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Selection of problem (By circle) Communication to circle (By mgt.) circle) Analysis (By circles) Data from circle management specialist Implementing Decision (By management) Presentation to management (By circle) Solution (By circle Operation of a Quality circle

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Quality circle operation cycle (c2) Data from specialist if needed (f) Review of recommendation approval by management (g)Implementation (a) Problem Identification (e)Presentation to management (c1) Problem analysis and discuss alternatives (d) Arrive at best solution (b) Problem selection by members Problem solving cycle of a Quality circle

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Structure of Quality Circle Every quality circle will have a leader and a deputy leader. For three or four quality circles there will be a facilitator, whose job is to co-ordinate the functioning of the quality circles. In an organization, there will be a high level committee consisting of the CEO and two other senior members to monitor the quality circle activities and formulate guidelines for effective functioning including rewarding system. Each quality circle will have members ranging from 8 to 10 in number. All must have volunteered to join this movement. The structure of quality circle is shown in Fig. below

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Executive committee Steering committee Facilitator Facilitator Facilitator Quality circle Quality circle Quality circle Leader Dy. Leadear Manager Member Member Member Structure of Quality Circle

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The benefits of quality circle Develop mutual trust and cooperation between management and workers as well as involve the workers in the decision making process in their work area. Improvement in productivity. Changes the total attitude to a constant, self renovation force of business enterprise. Develops the ‘knowledge management’ culture in the organization at the workers level. Improves the quality of the products and services Leads to increase in sales and reduction in the cost of production. Focus on higher safety and reduction in accidents. Ensures better housekeeping. Increases profitability by reduction in waste. Creates better motivation and involvement of the employees leading to reduced absenteeism & Grievances Leads to enriched quality of work life. Creates an atmosphere of positive and proactive work force with harmony and mutual trust. Creates better human relations and participative culture. Promotes job knowledge. Creates a greater sense of belonging.

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RE – ENGINEERING The fundamental rethinking and radical re-design of business processes to achieve dramatic improvements of performance in cost, quality, service & speed Re engineering not for incremental increase in improvements but for making “Quantum Leaps” Visualizing and stream-lining any or all ‘Business processes’ through combining, eliminating or restructuring It is a top down programme since lower down; perspective to visualize changes may not be there. It is different from OD, particularly with respect to minimal participation of employees at various levels.

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HOW TO MAKE RE-ENGINEERING & OD CONGRUENT ? A. Making process as humane as possible through Retraining Transfer Retirement incentives Avoiding layoffs Those who look for OD-Type values and processes can look for avenues for meaningful involvement of employees People with OD skills can help emerging new teams to be more effective for successful implementation of re-engineering (Re-Engg. Teams, steering committee, Process teams – to replace functional deptts.) OD. knowledge about how to design parallel structures is relevant to re-engineering. D.When large – scale systems changes affecting number of organizational units, number of people affected, the number of org systems altered and /or depth of cultural changes are involved, multiple types or O.D. interventions are utilized. e.g

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Reduction in hierarchical levels from say eight to four Shifting to a more participative leadership style would effect responsibilities of employees at every level & would require changes in work flow, reporting relation ships, jobs description & training programmes Advantages Of Re-Engineering (Positive Impact) Improvement in entire org. as a whole. Better systems & mgt. improvement in areas of Products & services Designing & operations Improved system operations Takes advantage of improved technology Improved application of industrial engg. in areas of Organizational strategies Management functions Plant utilization Quality improvement Creativity & innovation Confidence in competition

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5. Improvement in customer satisfaction Negative Impact of Re-Engineering Does not pay much attention to the social system of organizations relative to change processes & re-design of work. No consensus approach & no involvement of people lower down in the org. Strained industrial relations because re-engg. Would result in large lay-offs & dislocation of people. Impact of layoffs & thus resistance to re-engg. can be minimized through Re-training & re-deployment Reduction through attrition Transfer to other locations, comprehensive & carefully designed out - placements programmes Early retirement inducements Adequate notice period to employees before layoffs & re-deployment

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HISTORICAL EVOLUTION OF TQM Competitive environment demands a better quality of product or service at lower rates. The impact of poor quality on any organization leads to: Low customer satisfaction and low market share Low productivity, revenue and profit Low morale of workforce More rework material and labour costs Poor quality of goods and service High inspection cost Higher process bottlenecks and delay in product shipment Higher work-in-progress inventory High repair costs High material wastage and scrap

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Evolutions of Quality Total quality is not a revolutionary but an evolutionary concept. It has evolved over the years as shown 1975 1980 1985 1990 1995 2000 OPERATIONS CUSTOMERS INNOVATIONS Quality of Work life Quality Circle Productivity Employees Involvement Quality Total Quality Self- Directed Teams Total Quality Control / Management Self-Directed & self-Managed Teams The Evolution of Quality –Means and Focus

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1900 1920 1940 1960 1980 1990 2000 Years Operator Foreman Inspection Statistical Quality Control Total Quality Control (TQC) Total Quality Control Company wide Control Total Quality Management TQM Evoluation The Evolution of Quality over the Years

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The focus has also undergone a shift form operations to customers to innovation. In any manufacturing company, three management concerns-quality, cost and productivity-must be evaluated in relation to the customer.

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Definition of Quality A number of definitions of quality have been propounded by experts. 1. Quality is fitness for use or purpose. - Joseph M. Juran 2. Quality is conformance to requirements. - Philip B. Crosby 3. A predictable degree of uniformity and dependability at low cost and suited to market. –W. Edwards Deming 4.. . . development, manufacture, administration and distribution of consistently low cost products and services that customers need and want. - Bill Conway 5. Total composite of product and service characteristics of marketing, engineering, manufacturing and maintenance through which the product and service in use will meet the expectations of the customer. - Armand V.Feigenbaum

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Quality is the degree of excellence at an acceptable price and control of variability at an acceptable cost. The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs of customers. - ISO 840: Quality Vocabulary In brief “Quality is one which satisfies customers needs and continuously keeps on performing its functions as desired by the customers as per specified standards. New Definition of Quality Quality is about organizations, quality is strategic, quality is for everyone, quality is led by management, quality is appropriate grade and quality is \about improvement’-‘’Big Q’. A good quality process changes the way things are done by:

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Driving the business from customer needs. Setting a clear vision which is deployed down into coordinated action. Using the contribution of every person to the full. Managing well beyond company boundaries. Managing processes to their optimal capability. Partnering with customers and suppliers (both internal and external). Developing workers to manage and managers to lead. Breaking down hierarchy and functional divisions. Becoming faster, leaner and more responsive to market opportunities. Integrating all the above for competitive advantage.

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What is total Quality? Total quality is defined as the mobilisation of the whole organization to achieve quality continuously, economically and in entirety. Total quality not only satisfies but delights the customers by offering attractive features in products and services. Total Quality control (TQC) TQC, TQM and Total Quality are synonymous terms and used interchangeably in the field of quality. “Total quality Control is an effective system for integrating the quality – development and improvement efforts of various groups in an organization so as to enable marketing, engineering, production and service at the most economical levels which allow for full customer satisfaction.

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Factors Affecting TQC The scope of total quality control (TQC) encompasses all activities and stages of industrial life cycle, viz. Marketing evaluates the level of quality which customers want and for which they are willing to pay. Engineering reduces this marketing evaluation to exact specifications. Purchasing chooses, contracts with, and retains vendors for parts and materials. Manufacturing (engineering) selects the jigs, tools, and processes for production. Manufacturing supervisions and shop operators exert a major quality influence during parts making, sub-assembly and final assembly. Mechanical inspection and functional tests check conformance to specifications. Shipping influences the caliber of the packaging and transportation. Installation and product service help ensure proper operation by installing the product according to proper instructions and maintaining it through service.

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Q Factor Managers must appreciate the broader meaning of quality. They should know the difference between “big Q” quality and “little” quality. Big Q quality is important because it encompasses cost, delivery and safety as well as the traditional view of “conformance” quality. Big Q factor is commonly used in various terms of Total quality Management, for example, TQM, TQC, SQC, QA, etc. Dimensions of Quality (Kano’s Model) Noriaki Kano and others have proposed the concept of two dimensions of product quality: Must be (expected and performance) quality and Attractive (excitement) quality. Kano gives the following three features of quality.

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Expected Features Fundamental functions must be present. Absence of these features dissatisfies, Performance Features These features create satisfaction if customers expectations are exceeded. There will be dissatisfaction if they fall short of expectations. Excitement Features Innovations beyond customer’s awareness. Even minor items, if perceived by customers as of superior value, can enhance market share. They must be based on intimate knowledge of customer perception, product function and usage conditions to be successful.

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CUSTOMER SATISFACTION CUSTOMER FOCUS It is said that in an organization quality begins and ends with customers. The most coveted Baldrige Quality Award also stresses on customer related issues. Out of 1000 pts, about 300 pts are attributed to customers, Customer Window Customers decisions are mostly controlled by perception. There can be a gap between what is perceived to be good and what is important to the customer. The customer window highlights the relationship between the perception of the customer about the product attributes and the importance of those attributes from technical point of view. The priority of focus is indicated in the customer window. Many a times survey among the customers reveal that factors in the top left quadrant of the customer window are significant. Organizations attempt to focus on this, without realizing that these attributes can only have short term dividends. Attributes in the top right quadrant needs to be focused first. Some important factors will have very poor perception among customers. These are critical ones.

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III I IV II Very good Customer Perception Poor Not at all Very much Importance to customer

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Customer Satisfaction Model Customer satisfaction model relates ‘customer’s satisfaction’ and ‘value addition’. It is schematically represented in Fig. The value addition in the product or service is plotted along the x -axis and the satisfaction along the y axis.

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Type B Customers Customer Without expectations Value addition not available Type A customers Customer With expectations Value addition available Delighted Customers Dissatisfied customers

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Points for customer satisfaction Customer satisfaction should be the primary driving force of TQM. As a first step, analyse who the customers are and assess what problems they experience. The company should cooperate with the customer to resolve the problems experienced by them. One-to-one relationships should be established between the company and its customers. Analysis of the sales process should be undertaken to enhance customer satisfaction, and also to increase sales volume and reduce costs inherent in the process. The concept of customer satisfaction should be “internalised” within the integral part of employee care rather than stand alone in the form of behavioural training for customer contact staff. An organization should encourage customer complaints as an opportunity for quality improvement. Customer relations are of great importance. Relationships between the company customers and suppliers should carry equal weight. Active partnerships between the business and its suppliers should be established. Customers should be delighted by offering total quality products for meeting and exceeding their expectations.

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Techniques for measuring customer value – customer perception of quality Personal Interviews: Ask them in personal interviews, one –on-one, in on /site meetings, telephone calls, or teleconference. Discussion should be guided by a structured set of questions. Protocol Analysis: called content analysis, can be used to make sense of verbal data gathered through open-ended interviews or discussions. Focus Groups: Uses an unstructured interview to encourage a group of customers to discuss their feelings, attitudes and perceptions about a particular topic. Laddering: Laddering provides a method for identifying the needs, desires, wants or values of customers, and the product attributes instrumental in serving them. Laddering is most often used in individual interviews, but can be used in focus groups.

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Trade-off Analysis: Once a set of attributes has been identified as potential components of product or service value, managers need to determine the relative importance of each. Market Test: A market test always involves having target customers try the product, usually under the same circumstances in which they would use similar products. Direct Observation: Managers can often improve their understanding of value by directly observing the customers at each stage of decision making and use of the product or service. Other Sources of Data on customer: Traditionally used by managers collect details of complaints, returns, warranty date etc. After Sale Feedback

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VALUE ANALYSIS AND VALUE ENGINEERING Value analysis (VA) and Value Engineering can be defined as an organized and systematic approach to provide the required function at the lowest cost consistent with specific performance, quality and reliability. Value analysis pertains to the existing product and services whereas Value Engineering is concerned to the design of new products. The value can be increased in three ways: Retain the value but reduce the cost. Retain the cost but increase the value. Increase the cost if necessary, but increase the value much more than the cost.

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The value analysis team is a cross-functional team. If the objective of value analysis is enhancement of the market value, then the value analysis team leader will be the head of the marketing department. If the objective of value analysis is to reduce the cost or the product innovation, then the value analysis team leader will be the head of the manufacturing. Cost of value The value is of two types, namely the use value and the esteem value. Use value: The product quality is fundamentally defined as fitness for use. Value analysis is primarily concerned with the ‘use value’. This is also known as the primary or the basic value of the product. Esteem value The esteem value is the enhanced value associated with a brand or a product created by smart marketers. This is a notional or snob value for which the customer is ready to pay higher. This is also known as the secondary value associated with the product.

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Steps in Value Analysis The following steps are to be followed for the value analysis. Collect data about cost function, customer needs, history and likely future developments related to the product and its use. Determine the function of the product. Develop alternative designs. The selected alternatives should be able to fulfill the functional requirement of the product. Ascertain the cost of the alternatives. Evaluate the alternatives in all respect. The alternative which fulfills all the basic or primary value considerations and maximum number of secondary value considerations is the ideal alternative subject to the cost consideration which should be minimum. Recommend and implement the best solution. Identify the control point and devise a plan for periodic measurement of the performance and correct the deviations if any.

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Value Analysis - Areas of Improvement In value analysis, the areas of improvements are basically identified in four areas. They are: The functional aspect of the product and services, The intrinsic cost of the materials, Manufacturing and Specification. AIMS OF VALUE ENGINEERING Simplify the product Use cheaper & better materials Modify & improve product design. Use efficient processes Reduce product cost. Increase utility of product by economical means Save money or increase profits

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Steps / Procedure in Value Engineering Identify the product Collect the relevant information Define different functions Define / create different alternatives Critically evaluate the alternatives Develop the best alternative Implement the alternative Step I : Identify the Product Any design change should add value Value can be applied to a product as a whole or to its subunits

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Step II : Collect relevant information Technical specifications with drawings Production processes, machines, layout, instruction sheet, etc. Time study details & manufacturing capacity Complete cost data & marketing details Latest developments in related products Step III : Define different functions Define primary, secondary and tertiary functions Specify value content of each function & identify high cost areas.

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Step IV : Create different alternatives Through brainstorming sessions based on details available from above, create different alternatives All feasible and non-feasible suggestions are recorded without any criticism rather participants are encouraged to express their views freely Step V : Critically Evaluate the Alternatives Compare, evaluate, critically assess for their suitability & feasibility as regards their financial & technical requirements. Ideas technically sound and having lesser costs are further developed Step VI : Develop the best alternative Development plans comprising of drawing sketches, building of models, conducting discussions with purchase section, finance section & marketing division etc.

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Step VII : Implement the Alternative The best alternative is converted into a proto-type manufacturing model which ultimately alternately goes into operation and its results are recorded. Advantages o Value Engineering It is a much faster cost reduction technique. It is less expensive technique. Reduces production costs and adds value to sales income of the product Applications of value engineering Machine tool Industries. Auto Industries Import substitutes, etc

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CREATING QUALITY CULTURE Seven ‘S’ Framework for Change Mckinsey’s 7-s framework comprises elements such as strategy, structures, systems, staff, skills, styles and shared values. Strategy, structures and systems are called 3-hard Ss’ viz., strategy, structure and systems for doing things. It is a good start but not enough. Organizations which are truly excellent and strive to improve quality in everything include: IBM, Motorola, Corning, 3M, Down Chemicals, Toyota, Matsushita, Mitsubishi, Hitachi, ICI, Pedigree, Pet Foods, Hewlet-Packard, etc. All these use the 3-hard Ss’ approach and supplement it with the 4-soft Ss’ viz., staff, skills, styles and shared values. The soft Ss’ approach relate to people, their actions and the roles they play. Improvement does not come form strategy, structure and system. It comes from the soft Ss’ per se. Improvement in quality, movement in flexibility and creative ideas come from people.

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Structure Systems Strategy Shared Values Skills Styles Staff

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Resistance to cultural change People are afraid that the change will affect their way of functioning. People perceive that they will lose their control over things. There is a personal uncertainty that they will not be able to live up to the expectations of others. The change may mean more work for them. There may be past resentments against management. They think that TQM will die its natural death after sometime like several other concepts. There is an attitude that TQM will go away if I ignore it. They are unwilling to take ownership and feel committed. They think it is somebody else’s responsibility. They have the attitude – first you change, then I will. They think that others will find out that what I have been doing over the years is wrong. I could be penalized for my misdeeds.

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Corporate Culture Kohoe (1996) defines organization culture as “the shared values and norms of behaviour of the individuals within the organisation.”

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Differences in quality cultures: Negative quality culture (Hide the scrap scenario) Positive quality culture (Climb the ladders to delight the customer scenario) CREATING QUALITY CULTURE (CONTINUED) TQM WORK CULTURE Culture change is the secret to implementing TQM. Founders of companies create the original cultures. The beliefs of the founder and the senior managers teams are translated into rules, systems, norms and styles of managing. These are passed on to people who join the company. Many traditional Indian companies portray the old culture which is not exactly geared up for TQM. The culture, they say, is something unique to Japan. However, this is not true and has been proved wrong by Japanese themselves, when they started collaborative ventures in foreign counties like the US and India.

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Japanese Management is as exportable as its products. Janpanese guiding principles-granting employees broad authority to organize their tasks and insisting on high quality from workers and suppliers-are now proving themselves in the US towns. There is also evidence to suggest that the values inherent in the culture are rapidly being adopted by employees as their personal values. Values and Culture Values are the building blocks of a culture. Values are stable, long-term beliefs that are hard to change. They define what is right or wrong; good or bad; and correct or incorrect.

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Requisite Changes to Implement Quality Culture From Traditional Culture To TQM Culture Hierarchical Style Participative style Top down information flow Top down, lateral and upward information flow Inward quality focus Customer defined quality focus Functional Focus Process focus Short-term planning A vision for the future Episodic improvement Comprehensive / Continuous improvement Top down initiatives All staff involved and engaged Manage and delegate. Empower Direct Counsel Ownership and participation Functional and narrow scope of jobs Integrated functions Enforcement Promoting mutual trust Fire fighting with few individual/group Team initiatives group focusing on Continuous improvement.

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DEVELOPING TQM CUTLURE Developing TQM Culture. Superior quality can be obtained by pursuing two courses of action. developing technologies to create products and processes which meet customers, needs and stimulating a culture throughout the organization that continually views quality as a primary goal. Step for Creating TQM Culture Management accountability and a deep sense of responsibility towards employees is the starting point. Management thoughts and actions towards delighting its customers. Removing organizational boundaries and internal competition. Using fact-based decision making. Use of Kaizen. Continuous improvement must be encouraged.

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Do not use specially designed organization structures for TQM. There will initially be a need for quality assurance department. This department should be include some specialists who will help develop training courses, assist other parts of the organization in difficult problem solving and assist senior management in their evaluation of the management system. Use natural organization existing in the company to promote and implement your approach to quality. To conclude change in the culture of a company are a natural consequence of implementing TQM. Corporate cultures develop over time and can be traced to the behavior and values of scenario management. Top management need to apply the underlying values and concepts of TQM daily. They must show by example that the customer is the first. They must listen to and respond to employee’s ideas. Managers must see in their organizations that all employees are respected that decisions are based on facts, and that cooperation among employees must continue to be practiced.

Statistical Quality Control: 

Statistical Quality Control SQC (Statistical Quality Control) is the application of Statistical techniques to accept or reject products already produced or to control the process (and therefore the product quality) while the part is being made. The latter is called process control and the former is termed as acceptance sampling.

Process control or statistical process control (SPC): 

Process control or statistical process control (SPC) SPC involves testing a random sample of output from a process to determine whether the process is producing items within a pre-selected range. When the tested output exceeds the range, it is a signal to adjust the production process to force the output back into the acceptable range. This is accomplished by adjusting the process itself.

Acceptance Sampling: 

Acceptance Sampling Acceptance sampling is frequently used in a purchasing or receiving situation, while process control is used in a production situation of any type.

SQC for process control: 

SQC for process control Mainly, SQC is used for controlling quality during production in a mass production industries which produce standard products. SQC for process control is based on the probability theory. When several identical parts are produced, most will approximately be the same while few will be a little large & few will be a little small. When plotted with size on horizontal line, a normal or bell-shaped curve of following type is obtained.

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Variation in size between 0.995” and 1.005” with most measuring 1.000” are due to chance causes . Chance causes are those causes which operate randomly and independently of each other and follow normal law of errors. Chance causes are inherent and cannot be controlled or prevented. Chance causes are ignored because any effort to eliminate them is uneconomical and may be counter-productive too. Vibration of a machine, voltage fluctuations, variation in temperature, etc. are chance causes.

Assignable causes or Non-random causes: 

Assignable causes or Non-random causes These can be easily identified as responsible for variations and are not distributed normally. Wear & tear of machine parts, a worn out tool, setting of machine being changed unintentionally, etc. are assignable causes. When it is known that an improper size is made as a result of an assignable cause, it is possible to detect the cause & rectify it. If the size measures beyond 1.005” or below 0.995”, it is not due to chance causes but because of assignable causes.

Advantages of SQC in industry: 

Advantages of SQC in industry Through SQC an objective check is maintained on the quality of the product Through SQC, it can be known whether the manufacturing process is under control or not and if it has gone out of control, remedial measures can be applied. Preventive measures can also be initiated if there is a signal that the process is soon going to be out of control. Thus, waste of material, etc. is avoided SQC system, if adopted & strictly followed, increases industry’s goodwill since users may rely on its products with greater confidence.

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Quality of products can be defended in any enquiry on the basis of SQC records. SQC has a healthy impact on workers since they know that quality is being checked and accordingly they work efficiently & with alertness. Inspection expenses under SQC system are reduced since sampling inspection is done as against 100 % inspection.

Control Charts: 

Control Charts The control of quality in the manufactured product through process control is achieved through control charts. Based on theory of probability and sampling, the presence of assignable causes of erratic variations are detected in the process. These causes are identified, eliminated & process is stabilized & controlled at desirable performances. A typical control chart consists of following three horizontal lines on the graph A control line to indicate the desired standard of the control level of the process. An upper control limit indicating the upper limit of tolerance. A lower control limit indicating the lower limit of tolerance.

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These limits are established to assist in judging the significance of the variation in the quality of the product. The control limits are different from specification limits (which refer to quality characteristics of individual unit of product) These control limits are used to evaluate the variations in quality from sample to sample.

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Quality Scale Central Line (Average) Sample Numbers Upper Control Limit (UCL) Lower Control Limit (LCL) 3 Sigma 3 Sigma Under Control Out of Control Out of Control

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Process is under control if no points lie beyond the control limits. An out of control situation includes Point(s) outside control limits (UCL & LCL) Change or jump in level – when successive plotted points are on one side with respect to central line, though within control limits. Trend or steady change in level – A steady or progressive change in plotted points called a trend. These may be due to machine deterioration or tool wear. To be corrected before it goes too far. Control charts for variables are used for measuring quality characteristics. Control Chart For Sample means (X-chart) Control chart for sample ranges (R-chart)

Acceptance Sampling: 

Acceptance Sampling Acceptance Sampling is performed on goods that already exist to determine what percentage of products confirm to specifications. These products may be items received from another company and evaluated by the receiving deptt or they may be components that have passed through a processing step and evaluated by company personnel either in production or later in warehousing function. Acceptance Sampling is executed through a sampling plan.

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Single Sampling plan – Based on determination of quality from evaluation of one sample. Two samples are also used called double sampling. Acceptance Sampling is carried out when 100% inspection is costly or inspection may be destructive. The whole lot of items are accepted if the sample items conform to the specifications otherwise it is rejected. Sample items are considered to be representative of the whole lot.

Random Sample: 

Random Sample A random sample is one in which each unit in the lot has an equal chance of being included in the sample and the sample is likely to be representative of the lot. Variables – are quality characteristics that can be measured on a continuous scale. E.g. Diameter of a shaft Attributes – are quality characteristics which can be classified in one of the two categories namely good or bad; defective or non-defective

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Type – I Error – This is an error in sampling inspection. A sample from the output of the process may lead to conclusion that the process is out of control whereas process may be operating as intended. Type – II Error occurs when the process is not working as intended, but the sampling error causes one to infer that the process is satisfactory.

Acceptable Quality Level (AQL): 

Acceptable Quality Level (AQL) Acceptable Quality Level is the maximum percentage or fraction defective that is considered as the overall process average. The lots having quality equal to AQL or better have a high probability of acceptance (i.e. 0.95) The objective of producer is to ensure that the sampling plan has a low probability of rejecting good lots. Lots are defined high quality if they contain no more than a specified level of defects.

Lot Tolerance Percent Defective (LTPD): 

Lot Tolerance Percent Defective (LTPD) This is the upper limit of the percentage of defective products in an individual lot that the consumer is willing to tolerate, even if the process is aceptable. This is also known as LIMITING QUALITY LEVEL (LQL). Lots having quality equal to LTPD or worse have a very low probability of acceptance (0.10)

Producer’s Risk (α): 

Producer’s Risk ( α ) The probability associated with rejecting a high quality lot is denoted by α and is termed the Producer’s Risk. This is the risk of getting a sample which has a higher proportion of defectives than the lot as a whole and thereby rejecting a good lot based on sample evidence i.e. a lot as good as AQL will be rejected by is of a particular sampling plan. While using acceptance sampling plans, producers hope to keep this risk as low as 5%.

Consumer’s Risk (β): 

Consumer’s Risk ( β ) The probability associated with accepting a low quality lot is denoted by β and is termed as consumer’s risk. This is the risk of getting a sample which has a lower proportion of defectives than the lot as a whole and thereby accepting a bad lot as a good lot i.e. it is the probability that a lot with a percentage of defective equal to LTPD will be accepted by the sampling plan. While using sampling plans, consumers want to keep this risk ( β ) as low as 10%. The selection of particular values for AQL, α , LTPD and β is cost tradeoff or more typically, on company policy or contractual requirements.

Average Outgoing Quality Limit (AOQL): 

Average Outgoing Quality Limit (AOQL) The main objective of acceptance sampling plans is to guarantee a certain quality level, no matter what the incoming lot quality may be maintained by the producer. The fraction defective remaining in the lot after inspection is known as “outgoing quality” of the lot. The average fraction defective remaining in the lot after inspection is termed as average outgoing quality (AOQ). Obviously, it is a function of incoming lot quality. The fraction defective maintained by the producer. The maximum value of AOQ subject to variations in to is known as average outgoing quality limit (AOQL).

Average Sample Number: 

Average Sample Number Average number of items that must be inspected for coming to a decision (acceptance or rejection) is called Average Sample Number (ASN)

Operating Characteristic Curve (O.C. Curve): 

Operating Characteristic Curve (O.C. Curve) The following can happen when we go for acceptance sampling plans. We accept good lots We reject bad lots We may accept bad lots We may reject good lots In vast majority of cases, we do accept good lots &reject bad lots. On rare occasions, we may accept bad lots based on sample evidence although lot may be good. When good lot is rejected, the error is known as Error-I and the risk of rejecting a good lot based on sample evidences is known as producer's risk ( α ) which should be kept as low as possible.

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When a bad lot is accepted based on sample evidence, the error is known as Type-II error and the risk of accepting a bad lot as good is known as consumer’s risk ( β ) which again should be kept as low as possible. The operating characteristics (OC) describes an important feature of acceptance sampling plans. It shows how well an acceptance plan discriminates between good & bad lots.

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1.00 0.95 0.10 0 1 2 3 4 5 6 7 8 9 10 AQL LTPD Producer’s risk ( α ) – 5 % Consumer’s risk ( β ) – 10 % Probability of accepting the lot (p a ) Actual percent defective (p) in the lot Operating Characteristics Curve n = sample size c = acceptance number(Maximum number of defection in a sample to accept the lot)

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In this figure, a good lot may be defined as having no more than 1 % defectives. This is called acceptable quality level (AQL). If there is 1% actual defectives in a lot, the probability of accepting the lot should be as high as 95% and then the probability of rejecting a good lot is 5%. The probability of rejecting a lot at the AQL quality is known as producer’s risk ( α ) . Let us define a bad lot as having 5% or more defectives. This is known as lot tolerance percent defective (LTPD). The probability of accepting a lot with 55 defectives should be as low as 10%. This is called the Consumer’s risk ( β ). But the probability of rejecting a lot with 5% defectives or more is 90%.

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Sampling plans do not provide perfect discrimination between good & bad lots. Some lots of low quality may be accepted while some lots of very good quality may be rejected due to sample evidence.

Ideal OC Curve: 

Ideal OC Curve The ideal OC curve can be achieved only through 100% inspection. However, in practice we cannot go for 100% inspection of big lots, the OC curve selected should ensure that as the lot quality decreases (i.e. % defectives increase), the probability of acceptance of such lots should decrease, although relationship is not linear. N = 100 units. If defectives < 2%, lot accepted & if 72%, lot is rejected 1.00 0 1% 2% Probability of acceptance (p a ) %age of defectives (p) Reject Accept

Process Control with Attribute Measurements – using p charts (Fraction Defective Chart): 

Process Control with Attribute Measurements – using p charts (Fraction Defective Chart) Measurement by attributes means taking samples and using a single decision – the item is good or it is bad. We can use simple statistics to create p chart with a upper control limit (UCL) and lower control limit (LCL). We can draw these control limits on a graph & then plot the fraction defective of each individual sample tested. The process is assumed to be working satisfactorily when samples taken during the day periodically continue to stay between the control limits.

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p = Fraction defective p = Total number of defects from all samples Number of samples X Sample size Sp = p (1-p) n UCL = p + zsp LCL = p – zsp p = central or control line of p chart Sp = Standard deviation n = sample size z = number of standard deviations for a specific confidence z = 3 (99.7% confidence) z = 2.58 (99.0 % confidence) z = 1.96 (95% confidence level)

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LCL __ Central Line (p) p Out of control (UCL) Sample Size

Process Control with variables measurements using X and R charts: 

Process Control with variables measurements using X and R charts In variables sampling, actual weight, volume, number of inches or other variables measurements are measured and plotted on a chart to determine acceptability or rejection of the process based on these measurements. Four issues to address in creating a control chart: Size of samples – sample size to be small so that it is taken within a reasonable length of time & to reduce cost of larger sample. Sample size of five units preferred. For sample size exceeding 15 it would be better to use X charts with standard deviation ( σ ) rather than X charts with range R.

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Number of samples – to set up the charts, 25 or 30 samples be taken and once chart has been set up, each sample is compared and a decision taken whether process is under control. Frequency of samples – It is trade off between cost of sampling (more so if it destructive testing) vis-a-vis benefit of adjusting the system. Usually start with five units every half an hour & reduce frequency of sample as confidence in process builds up. Control limits – standard practice is to set control limits ± 3 standard deviations about the mean (99.7% confidence level). Thus, if any sample falls outside this band it indicates that the process is out of control.

X Chart: 

X Chart If the standard deviation of the process distribution is known, the X chart may be defined as UCL X = X + zsx LCL X = X - zsx Where: sx = S = standard deviation of sample means n s = standard deviation of the process distribution n = sample size x = Average of sample means or a target value set for the process z = number of standard deviations for a specific confidence (typically z = 3)

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An X chart is simply a plotting of the means of the samples that were taken from a process. X is the average of the means. In practice, however, the standard deviation of the process is not known.

R - Chart: 

R - Chart An R – Chart is the plotting of the Range within each sample. Range – the range is the difference between the highest and the lowest numbers in the sample An R Chart is the average of the range of each sample. X = ________ n

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Where: x = mean of the sample i = item number n = total number of items in the sample X = m Upper control limit = UCL x = x + A 2 R Lower Control limit = LCL x = x – A 2 R Upper control limit for R = UCL R = D 4 R Lower Control limit for R = LCL R = D 3 R

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Where: X = the average of the means of the samples j = sample number m = total number of samples Rj = Difference between the highest & lowest measurement in the sample R = Average of measurement differences R for all samples or R = m

X Chart (Mean Chart): 

X Chart (Mean Chart) Lower Control Limit (LCL X) Central Line (X) Sample means (x) Upper Control Limit (UCL X) Sample Numbers

Range Chart (R-chart): 

Range Chart (R-chart) Lower Control Limit (LCL R) Central Line (R) Sample Range (R) Upper Control Limit (UCL R) (Sample Numbers)

C - Chart: 

C - Chart This chart applies to the number of non-conformities in samples of constant size. C is a variable representing the number of non-conformities (defects) in each sample. Usually the sample size is considered to be one. The control limits of this chart are based on poission distribution.

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Some applications of C-chart: To control number of non-conforming rivets in an aircraft wing. To control the number of imperfections observed in a galvanized sheet. To control the number of surface imperfections on a large casting like gear blank which is used to rotate kiln in cement plants. To control the number of defects in final assemblies (like T.V., Radio, Computer etc.)

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The formulae for control limits are: UCL C = c + 3 c LCL C = c -- 3 c Where c is the mean of number of non-conformities. Also, this is the central line in control chart. The plotting of c (number of defects in each sample is done on the control chart (c-chart)

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0 1 2 3 4 5 6 7 8 9 10 C C Chart Upper Control Limit Central Line Lower Control Limit Mean (c) Sample Number

Classification of quality control techniques: 

Classification of quality control techniques Control Charts are used to control in-process quality Acceptance sampling aimed to control quality of incoming materials

How much to inspect & how Often: 

How much to inspect & how Often Cost of passing Defectives Cost of Inspection Costs Total Cost Amount of Inspection

C – Chart (Number of defects per unit): 

C – Chart (Number of defects per unit) C = Number of defects per unit C = Average no of defects of all samples UCL C = c + 3 c LCL C = c -- 3 c CL C = c

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Q. During an examination of equal length of cloth, the following are the number of defects observed: 2, 3, 4, 0, 5, 6, 7, 4, 3, 2 Draw a control chart for the number of defects & comment whether the process is under control or not? Ans : Average number of defects in 10 sample units is: C = ∑C = 2+3+4+0+5+6+7+4+3+2 k 10 = 3.6

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UCL C = c + 3 c = 3.6 + 3 3.6 = 3.6 + 3 x 1.8974 = 9.2922 LCL C = c – 3 c = 3.6 – 3 x 3.6 = 3.6 – 5.6922 = - 2.0922 = 0 CL C = c = 3.6

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Sample Numbers Number of defective units 9.3 (UCL) 3.6 (CL) LCL = 0

X Chart & R Chart: 

X Chart & R Chart Q. The following data gives the measurements of axle of bicycle wheel (in mm.) 12 samples were taken so that each sample contains the measurements of 4 axles. Obtain control limits for X Chart & R Charts and comment whether the process is under control or not. Sample nos. Given the value of constants from table of sample size (n=4) A 2 = 0.73, D 3 = 0, D 4 = 2.28 1 2 3 4 5 6 7 8 9 10 11 12 139 140 142 136 145 146 148 145 140 140 141 138 140 142 136 137 146 148 145 146 139 140 137 140 145 142 143 142 146 149 146 147 141 139 142 144 144 139 141 142 146 144 146 144 138 139 139 138

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Solution Sample Sample Values Total Sample Sample No. (0.0001 inch) Mean (x) Range (1) (2) (3) (4) = (3) ÷ 4 (R) (5) 1 139 140 145 144 568 142.00 6 2 140 142 142 139 563 140.75 3 3 142 136 143 141 562 140.50 7 4 136 137 142 142 557 139.25 6 5 145 146 146 146 583 145.75 1 6 146 148 149 144 587 146.75 5 7 148 145 146 146 585 146.25 3 8 145 146 147 144 582 145.50 3 9 140 139 141 138 558 139.50 3 10 140 140 139 139 558 139.50 1 11 141 137 142 139 559 139.75 5 12 138 140 144 138 560 140.00 6 Total ∑x = 1705.50 ∑R = 49

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From the above table we get: x = 1/12 ∑ x = 1705.50/12 = 142.125 R = 1/12 ∑ R = 49/12 = 4.08 We are given that for n = 4, A 2 = 0.73, D 2 = 0, D 4 = 2.28 X Chart 3 σ control limits are given by: UCL x = x + A 2 R = 142.125 + 0.73 x 4.08 = 145.10 LCL x = x – A 2 R = 142.125 – 0.73 x 4.08 = 139.15 CL x = x = 142.125

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UCL (145.1) LCL (139.15) CL (142.12) Sample Number Sample Mean (x)

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Since the sample Point (means) corresponding to sample numbers 5, 6, 7 and 8 lie outside the control limits, the x chart indicates lack of control in process average μ . This suggests the presence of some assignable causes of chaotic variations which must be detected and corrected. R – Chart: 3- μ control limits are given by: UCL R = D 4 R = 2.28 x 4.08 = 9.3024 LCL R = D 3 R = 0 x 4.08 = 0 CL R = R = 4.08 Since x-chart shows lack of control, the process cannot be regarded in statistical control although R-chart exhibits statistical control.

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Sample Number Sample Range UCL (9.3) LCL (0) CL (4.08)

Control Charts for Attributes:: 

Control Charts for Attributes: As an alternative to x and R or x and s charts we have the control charts for attributes which are used: When we deal with quality characteristics which cannot be measured quantitatively. In such cases the inspection of units is accompanied by classifying them as acceptable or non acceptable, defective or non defective. When we deal with characteristics which are actually observed as attributes although they could be measured quantitatively, e.g., go and not-go gauge test results.

Question on x chart & R chart: 

Question on x chart & R chart Q. You are given values of sample means (x) and the ranges (R) for ten samples of size 5 each. Draw mean & range chart and comment on the state of control of the process. Use the following control chart constants: For n = sample size = 5 From Tables (Given) A 2 = 0.58, D 3 = 0, D 4 = 2.115 Sample no. 1 2 3 4 5 6 7 8 9 10 X 43 49 37 44 45 37 51 46 43 47 R 5 6 5 7 7 4 8 6 4 6

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Solution: Mean Chart (X Chart) X = ∑x/10 = 442/10 = 44.2 R = ∑R/10 = 58/10 = 5.8 3 σ control limits are UCL(x) = x +A 2 R = 44.2+0.58 x 5.8 = 47.567 LCL(x) = X – A 2 R = 44.2 – 0.58 x 5.8 = 40.836 Central line = x = 44.2

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Sample Numbers Sample mean (X) CL (44.2) LC (40.83) UCL (47.5)

Range Chart: 

Range Chart 3 σ control limits are: UCL (R) = D 4 R = 2.115 x 5.8 = 12.267 LCL (R) = D 3 R = 0 x 0.58 = 0 Central line = R = 5.8

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Sample Numbers Sample Range UCL (12.26) CL (5.8) LCL (0)

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From the following data, construct a fraction defective chart (p chart) Group Number Sample Size No. of Defectives 1 32 2 2 32 3 3 50 3 4 50 2 5 32 1 6 80 4 7 50 2 8 50 0 9 32 2 10 32 1

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Solution: Since sample size is varying. We have to construct a p-chart (fraction defective chart) for varying sample size. Since sample is varying, the control chart would have varying control limits. Fraction defective = p= d/n = Number of defectives/sample size Control line or central line (CL)=p= ∑p/ total number of groups or lots UCL = p+3 p (1-p) n (sample size) LCL = p-3 p (1-p) n (sample size)

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Group Number ( Group Number) Fraction Defective (p) 1 2/32=0.0625 2 3/32=0.0940 3 3/50=0.0600 4 2/50=0.0400 5 1/32=0.0300 6 4/80=0.0500 7 2/50=0.0400 8 0/50=0.0000 9 2/32=0.0625 10 1/32=0.0300 Total ∑p= 0.469 p = ∑ p/10 = 0.469/10 = 0.0469 = 0.047 For n =32 UCL = 0.047 + 3 x .047(1-.047) 32 = 0.047 + 3 x .047 x 0.953 32

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= 0.47 + 3 x 0.37 = 0.47 + 0.111 = 0.158 LCL = .047 – 0.111 = 0 (if negative) For n =50 UCL = 0.047 + 3 .047 x 0.953 50 = 0.047 + 3 x .0299 = 0.047 + .0897 = 0.136 LCL = .047 -- .0897 = - ve = NIL = 0 For n =80 UCL = 0.047 + 3 .047 x 0.953 80 = .047 + 3 x .0236 = 0.047 + .0709 = 0.117 LCL = .047 -- .0709 = - ve = NIL = 0

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Sample Numbers Sample Range UCL (.158) CL (.047) LCL (0) UCL (.136) UCL (.117) n = 32 n = 50 n = 80

Practical on p-chart (Fraction Defective): 

Practical on p-chart (Fraction Defective) Q. The following figures give the number of defectives in 20 samples, each sample containing 2000 items. 425, 430, 216, 341, 225, 322, 280, 306, 337,305, 356, 402, 216, 264, 126, 409, 193, 326, 280, 389 Calculate the values for central line & the control limits for p chart (fraction defective chart). Draw the p-chart and comment if the process can be regarded in control or not?

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Solution: p-chart Fraction defective p = no. of defectives = d sample size 2000 Sample no. d p=d/2000 1 425 0.2125 2 430 0.2150 3 216 0.1080 4 341 0.1705 5 225 0.1125 6 322 0.1610 7 280 0.1400 8 306 0.1530 9 337 0.1685 10 305 0.1525 11 356 0.1780 12 402 0.2010 13 216 0.1080 14 264 0.1320 15 126 0.0630 16 409 0.2045 17 193 0.0965 18 326 0.1630 19 280 0.1400 20 389 0.1945 Ed = 6148 p = ∑d(total no. of defects) ---------------------- No of samples x Sample size = 6148 ------------------- 20 x 2000 =0.1537

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UCL = p + z sp Sp = SD = p (1-p) n SD = 0.1537 x 0.8463 2000 Assuming z = 3 (number of std deviations) UCL = 0.1537 + 3 0.1537 x 0.8463 2000 UCL = 0.1537 + 3 0.000065 = 0.1537 + 0.0242 = 0.1779 LCL = 0.1537 - 0.0242 = 0.1295 p = central line = 0.1537

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Sample Numbers Fraction Defective (p) UCL (0.1779) LCL (0.1295) CL (0.1537)

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Since a number of points lie outside control limits, process is not in a state of statistical control. This indicates presence of some assignable causes which must be corrected.

The Planning process: 

The Planning process A prerequisite for establishing TQM is the need for careful planning. Any attempt to implement TQM without systematic planning will have disastrous results. Corporate Strategy Formulation Where are we now? Where do we want to be? How do we get there

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Outcomes of Planning A basic understanding of TQM to management team: An agreed company mission statement; Allocation of roles and responsibilities to each member of the management team; A series of management actions by both the team as a whole and each individual member; A series of management actions by both the team as a whole and each individual member; Dates for series of review meetings.

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Policy Management Process It involves three distinct steps: Establishing policy Deploying policy, and Implementing policy. Establishing – Setting vision strategy, policy, direction, goals and objectives is the responsibility of senior management which integrates the “voice of the customer” with the “voice of the business”.

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ESTABLISH DEPLOY Objective Systems Analysis Indicators Targets Che ck IMPLEMENT Do Act Plan REVIEW

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Deploying Policy : Deploying Policy is a method to launch initial policy statements and receive commitments from various departments that can make a contribution to the targeted improvements: Implementing Policy : This is where the new policies and methods are actually put into effect. Methods take PDCA cycle are more result oriented. Planning process should be continuously reviewed for progress:

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Quality Policy Quality policy is needed to support the mission statement. The quality policy expounds upon the principles contained within the mission. The policy will serve to heighten sensitivity to customer requirements and introduce the idea of a shared responsibility for providing first class product or service. Some of the basic elements of quality policy are: Customer focus. Company culture. Quality assurance Shared values Prevention Continuous improvement Staff empowerment

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Quality policies of a number of Indian companies are: Quality must be the responsibility of the workforce. The management team must install a culture which empowers all staff to assume this responsibility The emphasis of quality improvement must be placed on each and every individual within the organization. Responsibility for success or failure must be collective and must, therefore, be shared by all. An enabling culture must be established based upon the belief that people are essentially responsible and must do a good job. The role of the management team should be to create the conditions for this to happen

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The TQM initiative and implementation must be under the overall coordination of a quality steering group or a quality implementation team adopting the coordinating role. Each team under each head of the department (called champion) must be made accountable and responsible for successful implementation of TQM. Areas of responsibility typically allocated to management team members must include: Communication Quality assurance system (ISO 9000) Supplier relationships Business process analysis Staff training Customer surveys. Different areas can be systematically allocated to various teams so as to make TQM a team-run affair. The quality manager may be the overall coordinator of TQM policy.

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LEADERSHIP FOR INSPIRING CHANGE IN QUALITY Why leadership for change? Eighty per cent of TQM initiatives fail because they do not have the backing of the senior management. Commitment is the foundation of an effective TQM initiative. Leadership is the key in promoting commitment. Leadership and commitment go hand in hand. TQM needs leaders who are committed to change. Leadership for Total Quality Total quality is defined as “performance leadership in meeting customer requirements by doing the right the first time.” Twelve Conditions of Excellence These 12 conditions of excellence for total quality as practiced by Westinghouse Electric Corporation are:

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Customer satisfaction Stockholders, value Employee Satisfaction Public approval (are the measures) Value / price ratio Value/cost ratio Error free performance (re the measure) Customer orientation Human resource excellence Product/process leadership Management leadership are the imperatives) The operating plan which leads to the total quality)

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Leaders And Managers - The Difference The distinction between managing and leading: “Managers do things right. Leaders do the right things”. Many managers are too concerned with day-to-day matters. This short-sightedness can cause a big problem when we consider the difficulty of creating a TQM culture which is completely at odds with the short-term approach. Non-visionary Executive Visionary Executive 1. Soles daily problems and makes daily decisions. 1. Articulates vision and philosophy 2. Meets formally with immediate subordinates 2. Makes regular contacts with people at all levels. 3. Is aloof, rational, critical and cold. 3. Is receptive, expressive and supportive. 4. Talks mainly about current short-term activities. 4. Talks about future goals and long-term strategic outlook. 5. Pays attention to weaknesses. 5. Pays attention to strengths. 6. Rarely seen, too busy to talk, and deaf to hear. 6. Is visible, accessible and a good listener

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Leadership in TQM Role Model TRANSFORMATIONAL LEADERS VERSUS TRANSACTIONAL MANAGERS Burns calls leaders ‘transformational’ and managers ‘transactional’. Transformational leaders: They provide mission for others to follow and they expect the same high standards from their people. They are interested in ‘ends’ rather than ‘means’. Transactional managers: They are good at achieving short-term results, foster teamwork and work in a practical manner. Evidently, transformational leaders and transactional managers need to work together. COMMITMENT TO TQM Commitment is an essential element of a TQM drive. Commitment must exist at every level. it is adherence to plans, principles and procedures.

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Comparison of Traditional Management and TQM S. No. Aspect Traditional Management TQM 1. Quality definition (a) Products meet specifi-cations. (a) Products fit for customer us. (b) Focus on post-production inspection. (b) Focus on building quality into the work process. 2. Customers Ambiguous understanding of customer requirements. Systematic approach to seek, understand and satisfy internal and external customers. 3. Errors A certain margin of error, waste and rework is tolerable. No tolerance for errors: do it right the first time and every time approach. 4. Improvement emphasis Technological break-through such as automation. Gradual but continuous improvement of each function. 5. Problem solving Unstructured problem solving and decision making by individual managers and specialists. Participative and disciplined problem solving and decision making based on hard data.

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Under TQM managers and workers view their roles, responsibilities and relationships differently. In TQM, the focus in on improving the process by discovering the root causes of cross-functional problems. TQM is not just another technique. It is a new way of organizational life.

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MANAGEMENT THEORIES AND PRACTICES COMPATIBLE WITH TQM Total Quality Management New Leadership Theory Scientific Management Strategic Planning Group Dynamic Corporate Culture Organizational Development Socio-Technical System Linking-Pin Organisation Employees Involvement Achievement Motivation Theory Training and Delvelopment

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QUALITY AWARDS A number of awards are given to individuals, groups and Companies world over in order to encourage and motivate them to continue their efforts for quality improvement. Some of these national, state, and industry specific awards are listed below:-

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National Awards of Different Countries (Indicative List) Malcolm Baldrige National Quality Award (United States) The Deming prize (Japan) The European Quality Award (for companies based in Western Europe). Australian Quality Award. British Quality Award. French National Quality Award. Malaysia Quality Award. South African Quality Award. Swedish Quality Award Egyptian Quality Award The peacock national quality award (India)

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Limited to a maximum of six winners per year, the major national quality awards recognize only the best of the best. Countless other excellent companies would go unrecognized. It should be noted that, although the Baldrige criteria has emerged as the definitive quality standard, the Deming Overseas Prize is the only true international quality competition.

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Seven pillars of the award. Leadership Information and analysis strategic quality planning Human resource development and management Management of process quality Quality and operational results and. Customer focus and satisfaction. Achievement under these seven pillars of the awards must be total.

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The GOALS The malcolm baldrige national quality award was created to promote the following four goals: Helping to stimulate american companies to improve quality and productivity for the pride of recognition while obtaining a competitive edge through increase. Recognizing the achivements of those companies that improve the quality of their goods and service and provide an examples to others. Establishing guidelines and criteria that can be used by businesses, industrial, governmental and other organizations in evaluating their own quality improvement efforts. Providing specific guidance to other american organizations with wish to learn how to manage high quality, by making available the detailed information on how winning organiations were able to change their cultures and achieve eminence.

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The triphy “quest for excellence, the following are the criteria categories and each has specific weight age: Leadership (9.5%) Information and analysis (7.5%) Strategic quality planning (6%) Human resource development and management (15%) Management of process quality (14%) Quality and operational results (18%) Customer focus and satisfaction (30%)

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The Deming Prize The deming prize was created in 1951. It was named after dr. W. Edwards deming who contributed significantly to promoting quality concepts in japanense industry. The deeming prizes are awarded for excellence in the systematic application of total quality management. These awards fall into the following six categories. Individuals Companies and other operating organizations (divisions of companies). Factories or work sites. Companies which are located outside japan (overseas companies). Small enterprises. Public institutions.

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The Deming Prize Assessment Criteria Policies Organizations Education and dissemination Information and communication Analysis Standardization Control and management Quality assurance Effects Future plans The European Quality Award (Teqa) The European quality award (teqa) model is being used by many companies for self-appraisal of their position against common criteria

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Enablers: Leadership – 10% People management – 9% Policy and strategy-8% Resources- 9% Processors- 14% Enablers (total)- 50% Results People satisfaction – 9% Customer satisfaction-20% Business result – 15% Impact on society- 6% Results (Total) – 50%

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Golden Peacock National Quality Award (Gpnqa) The golden peacock national quality award (gpnqa) of india is also regarded as India’s malcolm baldrige-the ultimate recognition for quality. This is the award given every year by the quality council of India (qci). Rajiv Gandhi National Quality Award To Indian industries. The structural models of Rajiv Gandhi national quality award is quite similar to European quality award.

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Primary Focus: Customer, People & Consumer Perception Grading criteria: Leadership Policies & strategies Human resource management Resource, process Customer satisfaction Employee satisfaction impact on society Business results

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Importance: Quality of Corporate Leadership Organization: Essentially Large Manufacturing and Firms (Private / Public) Purpose: customer satisfaction : Relations with community : Employee satisfaction Grading : One Year Applicability : Indian Industries

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Summary A number of countries instituted national quality awards, state quality awards, industry specific quality award for promoting total quality management. The three most conveted international awards given for quality are Malcolm Baldrige National Quality Award of the USA; the Deming prize of Japan; and the European quality award (TEQA). In India-The Golden Peacock National Quality Award on the pattern of the Malcolm Baldrige Award criteria of the USA, has been instituted recently under the quality council of India (QCI) and institution of directors (IOD). Telco, Phillips, sail, Kirloskar, EIL, BEL, etc. Are some of the companies who have already got this award India .

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For the Malcolm Baldrige Award a company has to fulfill the seven pillars criteria of: leadership, information and analysis, strategic quality planning, human resource development and management, management of process quality, quality and operational results, and customer focus and satisfaction. Similarly, the deming prize and TEQA and GPNQA have prescribed their own criteria for applicant companies working for quality improvement. India has taken a long period to institute its quality award but finally GPNQA has been instituted by IOD and is operational now.

Teamwork for Quality: 

Teamwork for Quality Teamwork is one of the underlying principles of total quality. In all spheres of activity the cooperation and shared understanding of a group of people with a common objective will usually achieve more than s single individual. Team objectives Team objectives should be clearly established and should have the following features: Objectives should be agreed by the whole team. Objectives should be written clearly and unambiguously so that everyone understands the team’s purpose in clear terms. Objectives should be directed to measurable results so that team has a measure for success. In order to keep the team members motivated and in right spirit, challenging but achievable objectives should be established on a scientific and realistic basis. Objectives should be arranged in sequential and hierarchical manner. Objectives should be quantifiable.

Team Management Wheel: 

Team Management Wheel In order to make team, quality effective, Margerison and McCann (195) created a graphic tool called Team Management wheel. Producing Inspecting Maintaining Linking Advising Innovating Prompting Developing Organising

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The team management wheel emphasis the following activities: Advising: Giving and gaining information Innovating: Creating and experimenting with ideas Promoting: Exploring and presenting opportunities Developing: Assessing and planning application Organising : Arranging for resources and implementation Producing: Concluding and delivering outputs. Inspecting: Controlling and auditing procedures Maintaining: Upholding and enforcing standards Linking: establishing linkages.

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IMPLEMENTING TQM AND QUALITY AUDIT “ It is funny things about life you refuse to accept anything but the best, you very often get it.” TQM IMPLEMENTATION MODEL Once the management has decide to launch TQM in the organization, it has to do three things : (1) establish the desired future state, ii) assess its current state iii) identify the action steps for transition to TQM. Seven strategies points which an organization must follow for a successful the transformation to TQM. Management leadership and commitment. Supportive organizational structures and roles. Tools and process. Education and Training progammes Reward and recognition strategies Effective and transparent communications Focus on customer satisfaction.

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Makiinsey’s 7-s model includes strategy, structure, systems (3-hard S’s) and staff, skills styles and shared values (4 soft S’s). This model emphasizes that for an excellent organization focus must first be laid on soft S’s than on hard S’s. Empowerment of employees begins with TQM managers accepting their responsibilities by: (i) understanding and supporting the thrust and direction of the organization’s total quality strategy; ii) facilitating coaching and supporting their team’s activities; iii) attending training sessions to build their own skills in problem solving quality improvement and collorative behavior iv) providing direction and guidance to their team’s recommendation in a timely manner. Management Leadership and commitment: Manager support TOM by : i) becoming role model of total quality ii) being trained and showing leadership in the use of processes iii) ensuring that quality is a key criterion in selecting individuals for promotion; iv) obtaining feedback from employees on their own management style, behavior and support for total quality and v) inspecting for total quality-not just the results but the processes used to obtain results.

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Barriers in implementation. These barriers are as follows: Total quality is seen by employees as just another cost-reduction programme. Employees do not believe that management has long-range commitment. Employees do believe that “when push comes to shove” short-term market place problems and profit pressures will take precedence over total quality. Consistent priorities are absent during implementation. Cultural resistance exists. Senior people are not available, or too busy to be trained or to practice total quality tools and processes. Results are expected too fast. Management would not free work groups for training. There is a “not invented here” attitude regarding total quality processes and tools. The organization has insufficient funds to implement changes and the managers is told to “do it within the existing budgets”.

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xi) The perception exists that the process takes too long or that “we are already doing that”. xii) There is no perceived change in management behaviour. Supportive Organizational Roles and Structures To establish supportive roles and structures management should consider three strategy initiatives: Developing and communicating a clear image of future state. Using multiple and consistent leverage points to manage the transition. Implementing organizational arrangements for the transition. Each of these initiatives would require some level of incremental or redirected manpower, organizational restructuring and redefinitions of roles.

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Developing and communicating a clear image of future will clarify the gaps between the organization’s current and future states. These abridged gaps will form the basis for transition strategy. Descriptions of the future can have a powerful effect upon people. “No company will stay in business without a plan”, says Waltson, 1986. Secondly, in implementing TQM, multiple actions and leveraging of multiple issues are required. First step in this direction is to establish subject matter experts (quality specialists) for the tools, processes and methods of TQM throughout the organization. Second step is to consult a counsellor either directly or attending his seminars. Finally, a human resource representative be included in the strategy design because it is he who can play an important role in communication, recognition and reward systems, and management training. Third key initiative is establishing organizational arrangements for the transition.

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TQM organization success will depend upon the clearly identified and understood roles of key persons. Indian organizations addressed in varying degrees the following eight roles in their implementation strategies. Senior Manager Unit Manager and Team Transition Manager Transition Team Unit Quality Officer Network of quality and training specialists Human Resources External Consultants

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Senior Management has the key lead role in initiating, supporting and sustaining their operating units’ efforts. Senior management should agree on vision, mission and outputs of the organization. An operating unit’s management team begins by accepting their responsibilities for incorporating TQM strategy in their product, business, operating plan and activities. Transition Manager has to get participation of human resources in developing recognition and reward system that supports TQM. He is also to coordinate their applicable human resource functions such as communication and training.

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Transition Team is to form the organization’s quality officer and the local unit quality officers into an oversight committee. The oversight committee activities include the following: Implementation plan assessment and inspection Updating of quality tools and processes as organizational maturity allows. Policy recommendations. Quality training curriculum and introduction. Team development, and Communication strategies and plans.

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Unit Quality Officer is responsible for the quality implementation plan and for facilitating the transition to total quality, in much the same way as is the organisation’s quality officer. External Consultants can be the vital asset to management in starting up TQM and the right use of techniques needed for planning and implementing the strategies for change. Perhaps even more important is a worthy consultant who can also perform the role of an objective assessor for the senior management team and can act as the CEO’s personal sounding board on the progress of TQM.

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Quality Assurance What is Quality Assurance? Quality assurance is the activity of providing the evidence needed to establish confidence among all concerned, that is the quality-related activities are being performed effectively. ISO 8402 – 1986 defines QA as: all those planned or systematic actions necessary to provide adequate requirements for quality. Quality assurance is often the title of a department in organizations which is concerned with many quality-related activities such as quality planning, quality control, quality improvement, quality audit, and reliability.

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Quality Audit What is Quality Audit? Quality audit is an independent review conducted to compare some aspects of quality performance with a standard for that performance. The ISO 8402-1986. It defines quality audit as a systematic, independent examination and evaluation to determine whether quality activities and results comply with planned arrangements and whether these arrangements are implemented effectively and are suitable for achieving objectives. Quality audits are used by companies to evaluate their own quality performance and the performance of their suppliers, licensees, agents, and others and by regulatory agencies to evaluate the performance of organizations which they are assigned to regulate.

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Purpose of Quality audits. The specific purpose of quality audits is to provide independent assurance that: Plans for attaining quality are such that, if followed, the intended quality will, in fact, be attained. Products are fit for use and safe for the user. Standards and regulations defined by government agencies, industry associations, and professional societies are being followed. There is conformance of specifications. Procedures are adequate and are being followed. The data system provides accurate and adequate information on quality to all concerned. Deficiencies are identified and corrective action is taken. Opportunities for improvement are identified and the appropriate personnel alerted.

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Audits of quality systems as well as specific activities may take the form of: (1) audit of the plans, or (2) audit of the execution versus the plans. Planning and Performing Audits 1. Legitimacy . The basic right to conduct audits is derived from the “charter” which has to be approved by upper management, following participation by all concerned. 2. Schedules versus unannounces . Most auditing is done on a scheduled basis in an orderly manner. 3. Use of reference standards and checklists . The reference standards normally available include: written policies of the company as they apply to quality stated objectives in the budgets, programmes, contracts, etc. customer and company quality specifications, pertinent government specifications and handbooks; company, industry, and other pertinent quality standards on products, processes.

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4. Verification of facts: Auditors are universally expected to review with the line supervision the facts of any deficiencies discovered during the audit. The facts should be agreed on before the item enters a report that will go to higher management. 5. Discovery of causes. In many companies, the auditor is expected to investigate major deficiencies in an effort to determine their causes. Audit recommendations will then include proposals that such investigations may be made. 6. Recommendations and remedies . Auditors are invariably expected to make recommendations with a view to reducing deficiencies and improving performance. However, auditors are expected to follow up recommendations to assure that something specific is done i.e., the recommendations are accepted or else considered and rejected.

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Policy issues are often incorporated into a “Quality Audit Manual.’ Such a manual also includes details on the subject matter to be covered in audits, checklists of items to be checked and questions to be asked. Human Relations in Auditing 1. The reasons behind the audits . These reasons may be well discussed during the basic formulation of the audit programme. 2. Avoiding an atmosphere of blame . Audit reports and recommendations should be problem-oriented rather than person-oriented. 3. Balance in report . Overall summaries or ratings which consider not only deficiencies but also the opportunities for deficiencies. 4. Depersonalising the report . The real basis of the recommendations should be the facts rather than the opinion of the auditors. The ultimate responsibility for results on the line managers, not on the auditors.

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5. Post-audit meeting . At this meeting, the audit observations are presented so that the manager can plan for corrective action. In addition, the manager can point out to the auditor any mistakes with respect to the facts that have been collected. A self-audit and an independent audit can be combined to provide a “two-tier” audit. Audit Reporting The report may be jointly issued by the auditor and auditee: The report should include the following items:

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Purpose and scope of the audit. Details of the audit plan including audit personnel, dates, the activity that was audited (personnel contacted, material reviewed, number of observations made, etc.) Audit observations including supporting evidence, conclusions, and recommendations. Recommendations for improvement opportunities. Recommendations for follow-up on the corrective action that is to be proposed and implemented by line management, along with subsequent audits, if necessary. Distribution list for the audit report.

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Summarising the Audit Data 1. Reports of each discrepancy to secure corrective action. These reports are made promptly to the responsible operation personnel, with copies to some of the managerial levels. 2. A report of the overall status of the subject matter under review. Distribution of the Audit Report With a view to promoting harmony and a constructive viewpoint on audits, some organizations have adopted a different policy. The audit report is sent only to the manager whose activity is audited. A follow-up audit is scheduled. If the deficiencies are found to be corrected in the follow-up audit, the audit file is closed. Otherwise, copies of both audit reports are sent to the upper management.

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Product Audit Product audit is an independent evaluation of product quality to determine its fitness for use and conformance to specifications. Product auditing takes place after inspections have been completed.

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Total Quality in Service Sector Why Total Quality in Service Sector? The role of the service sector in economic development is increasing with an accelerated pace. World Scenario of Service Sector Today, the USA has emerged as the first “service economy of the world” with more than 70 per cent of its total revenue and more than 50 per cent (75 million people) of its population employed in producing and distributing services. Japan’s services now account for 63 per cent of that nation’s GDP and service sector is growing in Japan at the rate of 35 per cent compared to manufacturing growth rate of 25 per cent. Japanese methods include: regular meetings between customers and senior managers, market research of potential customers, questionnaires research, customer clinics, comment cards attached to products, analysis of complaints, and toll free telephone numbers.

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Concept of Service “A service is any activity or benefit that one party can offer to another, which is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.” It is important that customers’ needs and wants are appropriately understood for designing and providing the services better suited to meet the needs and expectations of customers. Characteristics of Services A service cannot be touched Precise standardisation is not possible There is no ownership A service cannot be patented Production and consumption are inseparable There are no inventories of services Middlemen roles are different The consumer is part of the production process so the delivery system must go to the market or vice versa.

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Inseparability: In general, services cannot be separated from the person or firm providing it. Heterogeneity: Standardisation of services is very difficult because of involvement of human element in providing and delivering. Perishability : Services cannot be stored and are perishable with the passage of time. This perishability characteristic of services aggravates their marketing due to fluctuating demand. Ownership: The aspect of ownership is missing in services due to their instability. If quality of services is improved, their marketability increases. So TQM is necessary in service sector as well. Service Marketing Strategies For marketing of products, the 4Ps (elements) of marketing mix are: product, price, place (distribution) and promotion. These 4Ps are called marketing mix elements and are used

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in a specific combination to arrive at a marketing strategy. In the case of services, there are three additional elements of service marketing mix, thus, making these as 7Ps. These three additional elements are: people, physical evidence and process. While making a service marketing strategy, we must consider all these seven elements of marketing mix. The people constitute an important dimension in the marketing of services and there is a need to select, train and maintain them properly. The physical evidence may be of two types: (1) peripheral and (2) essential. Peripheral evidence is actually the part of purchase of service but by itself is of no value, e.g. airline ticket, bank’s, building, facilities and decoration. The process constitutes the systems by which you receive delivery of the service viz., self-service, job shop operations or intermittent operations.

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Product and Service While products are transportable, only service providers are transportable. The customer assessment of product quality starts at the time of its purchase and continues through its lifetime. On the other hand, service quality is assessed at the time of its execution. In some cases, the customers may feel dissatisfied after the completion of the service, for instance, cracks appearing in a building a few months after construction and occupation.

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Benefits of Quality Systems in Service Sector The application of quality management at all stages of a service process specifies opportunities for: Improved productivity and cost reduction Improved market opportunities Improved service performance The standard states that to achieve these benefits, the quality system for services should also respond to the human aspects involved in the provisions of a service by: - Managing the social process involved in a service - Regarding human interactions as a crucial part of service quality - Recognizing the importance of customers perception of the service organizations image, culture and performance - Motivating personnel and developing their skills to meet customer expectations.

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Quality Objectives for Services Hence ISO 9004-2 requires the organization to lay down quality objectives or standards keeping in view the following: Customer satisfaction with quality of service Protection of the environment and society at large in respect of service activities. Efficiency in providing service

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Areas of Application The ISO 9004-2 lists some of the services to which the international standard can be applied: Hospitality services (like catering, television, etc.) Health (like hospitals, medical test laboratories, etc.) Maintenance (like: electrical, mechanical, automobiles, etc.) Utilities (like water supply, electrically, transport, waste management, etc.) Trading (like wholesale, retail, etc.) Financial (like banking, accounting, etc.) Professional (like architects, chartered accountants, education, etc.) Administration (like personnel, computing, etc.) Technical (like consultancy, test laboratory, etc.) Scientific (like R&D, decision aids, etc)

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Implementation of TQM in Service Sector Malcolm Baldridge Quality Award of the USA is also won by service organizations e.g. Federal Express by adhering to standards and having Total Quality Management. An electric power supply company which won the coveted award, provided with statistics their progress in the achievement of some of their set standards between 1983 and 1990. The number of power breakdowns came down from 75 minutes/year to 47.5 minutes/year. Complaints per 1000 customers came down from 0.75 to 0.23. The price of electricity in cents / kWH went up only marginally in 7 years from 6.50 to 7.40 in spite of inflation, reflecting successful cost reduction through TQM. In our country, some of the service organizations are building up standards and quality culture towards providing better customer satisfaction. Engineers India Ltd., (EIL), and NTPC are good examples as they have won the Company Standardisation Award constituted by the Institute

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of Standards Engineers (ISE) and MECON – a project consultancy organization in the steel sector. EIL has recently won the Golden Peacock National Quality Award of the Institute of Directors, New Delhi. Importance of Defining Service Within service businesses, three quality dimensions are defined as accomplishments, behavaiour and products. Accomplishments are usually the most important. They are the outputs or products, such as seminars and repaired machines.

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Behaviour is an activity performed by employees. It is customer and employee relationship such as a registration clerk handling an irate hotel guest. Products are usually the least important dimension. They are the physical outputs produced or manufactured. All service businesses produce accomplishments and have employees whose behaviour is important.

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Nature of the Business Accomplishments Behaviour Products Fast food restaurant Food prepared, Orders taken. Tables cleaned Greet customers, Ask for orders, Input orders Hamburgers, Fries, Soft drinks Accounting firm Tax payments, Financial advice, Audit survey Gather data, Interpret, Suggest improved procedures Reports, Forms, Financial statements. Retail store Display products, Make sales, Meet customer needs Greet customers, Determine customer needs Customers products Automobile dealer’s service department Write repair orders, Sell parts Repair cars Gather information from customers, Diagnose cause, Explain work. Automobile space, paints

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BIG Growth of Service Sector An article in the Economic Times of 17 th September, 1992, said “The service sector is at the threshold of tremendous growth. Service and knowledge workers are estimated to constitute 80 per cent of the workforce, with the manufacturing sector contributing to only the rest 20 per cent by the turn of the year 2000”. A Survey Findings A recent survey of the top ranking organisations in the Europe provides some useful insights into the importance of total quality in services. Of those organisations who responded, 89 per cent said quality was the primary buying argument for the ultimate customer; 66 per cent believed it was a major means of reducing costs; 56 per cent thought it was a major means of improving flexibility and responsiveness; and 40 per cent said total quality was important to reduce throughput time.

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Cornerstones of Service Quality Only 15 per cent of the mistakes are commommitted by the people in work-shops and the remaining 85 per cent are attributed to the organisational or the system failures, which only management can correct. The three main cornerstones of the pyramid of the total quality management are: the management commitment, the quality tools and techniques, and the team work and participation of one and all in the organisation. Supported by these cornerstones are the load bearing factors of customer satisfaction, quality of worklife, and performance leadership. An effort has been made to depict this philosophy.

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Three Cornerstones of TQM T Q M Quality of Worklife Management Commitment Quality Tools & Techniques Performance Leadership Team Work & Participation Customer Satisfaction

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Increased Profits Through Service Quality The products of the service sector are also equally potential candidates for the export market. Export should not only be viewed in the light of things that are going out of the country. It should also be viewed in the light of the potential they hold by way of attracting foreign users (like in medical care, tourism, education, etc.) of these services. Foreigners would not mind coming all the way to India to avail of these services if they are comparable in the world and are at reasonable price. For example, i) Education ii) Hospitals iii) Banks iv) Insurance

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