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ABOUT WHAT IS TQM? TQM is an integrated organizational approach in delighting customers (both external and internal) by meeting their expectations on a continuous basis through everyone involved with the organizational working on continuous improvement in all products/processes along with proper problem solving methodology. “TO DELIVER HIGHEST VALUE AT LOWEST COST” is the main objective of TQM

Scope of TQM:

Scope of TQM TQM is the foundation for activities, which includes: Commitment by senior management and all employees Meeting customer requirements Reducing development cycle times Just In Time/ Flow Manufacturing Improvement teams Reducing product and service costs Systems to facilitate improvement Employee involvement and empowerment Recognition and celebration Challenging quantified goals and benchmarking Focus on processes / improvement plans This shows that TQM must be practiced in all activities, by all personnel, in Manufacturing, Marketing, Engineering, R&D, Sales, Purchasing, HR, etc.

Intangible Benefits of Implementing TQM:

Intangible Benefits of Implementing TQM Image of the organization has improved. Reduction in inventory. Shorter lead time in design, manufacturing, procurement service etc., Reduction in rejections and complaints. Customer satisfaction. Quality cost % to turnover reduction. Lower manufacturing cost. Reduction in deviation. Continuous improvement. Drastic reduction in defectives and number of defects.

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WHAT IS A PRODUCT? • People buy want satisfaction, not objects. • Example: Consumers buy televisions because they want entertainment, not because they want a box with a screen. • Product Bundle of physical, service, and symbolic attributes designed to satisfy a customer’s wants and needs. WHAT ARE GOODS AND SERVICES? • Services Intangible tasks that satisfy the needs of consumer and business users. • Goods Tangible products that customers can see, hear, smell, taste, or touch.

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Product & Service:

7 Product & Service MD.QUADIR MOHIUDDIN


Definitions Product Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. Service A form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

What is a Product?:

What is a Product? Products, Services, and Experiences Market offerings may consist of a combination of goods and services Experiences are used to differentiate offerings Levels of Product and Services Core benefit, actual and augmented product Product and Service Classifications Consumer products and industrial products

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Three Levels of Product

Product Classification Schemes:

Product Classification Schemes Durability Use Tangibility

Durability and Tangibility:

Durability and Tangibility Nondurable goods Services Durable goods

Product Classifications Consumer Products:

Unsought Products New innovations Products consumers don’t want to think about these products Require much advertising & personal selling i.e Life insurance, blood donation Product Classifications Consumer Products Specialty Products Special purchase efforts High price Unique characteristics Brand identification Few purchase locations i.e can be anything Shopping Products Buy less frequently Higher price Fewer purchase locations Comparison shop i.e Clothing, appliances Convenience Products Buy frequently & immediately Low priced Mass advertising Many purchase locations i.e Candy, newspapers

Product and Service Classifications:

Product and Service Classifications Consumer products Industrial products Materials and parts Capital items Supplies and services

Product and Service Decisions:

Product and Service Decisions Individual Product Product Line Product Mix Product attributes Quality, features, style and design Branding Packaging Labeling Product support services Key Decisions

Product and Service Decisions:

Product and Service Decisions Product line A group of products that are closely related because they may: function in a similar manner be sold to the same customer groups, be marketed through the same types of outlets fall within given price ranges Key Decisions Individual Product Product Line Product Mix

Product and Service Decisions:

Product and Service Decisions Individual Product Product Line Product Mix Product mix Also known as product assortment Consists of all the product lines and items that a particular seller offers for sale Key Decisions

Product and Service Decisions:

Product and Service Decisions Individual Product Product Line Product Mix Product mix width: Number of different product lines carried by company Product mix depth: Number of different versions of each product in the line Product mix consistency Key Decisions

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Four Services Characteristics

Characteristics of Services:

Characteristics of Services Intangibility Consumers look for service quality signals Inseparability Services can’t be separated from providers Variability Employees and other factors result in variability Perishability Services can’t be inventoried for later sale

The Concept of TQM:

The Concept of TQM Total – Made up of the whole(or) Complete. Quality – Degree of Excellence a product or service provides to the customer in present and future. Management – Act , art, or manner of handling , controlling, directing, etc. TQM is the art of managing the whole to achieve excellence.

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"TQM is a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society." Definition TQM is composed of three paradigms: Total : Organization wide Quality : With its usual Definitions, with all its complexities (External Definition) Management : The system of managing with steps like Plan, Organise, Control, Lead, Staff, etc.

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Definition Total Quality Management ( TQM ) is a management strategy aimed at embedding awareness of quality in all organizational processes.

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Explanation TQM requires that the company maintain this quality standard in all aspects of its business. This requires ensuring that things are done right the first time and that defects and waste are eliminated from operations.

Evolution of quality Era:

Evolution of quality Era 1900 1920 1940 1960 1980 1990 2000 Craftsman Foreman Inspection SQC TQC TQM TQC &QC Evolution Years

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Evolution of Total Quality Management Inspection Quality Control Quality Assurance TQM Salvage, sorting, grading, blending, corrective actions, identify sources of non-conformance Develop quality manual, process performance data, self-inspection, product testing, basic quality planning, use of basic statistics, paperwork control. Quality systems development, advanced quality planning, comprehensive quality manuals, use of quality costs, involvement of non-production operations, failure mode and effects analysis, SPC. Policy deployment, involve supplier & customers, involve all operations, process management, performance measurement, teamwork, employee involvement.

Evolution of quality –Means & Focus:

Evolution of quality –Means & Focus 1975 1980 1985 1990 1995 2000 Operation Customers Innovations Quality of Work life Quality Circle Productivity Employee Involvement Quality Employees Empowerment Total Quality Self Directed Teams TQC/TQM Self Directed/Managed Teams

Conventional Quality Management:

Conventional Quality Management Quality Element TQM Definition -Product Customer Priorities -Service &Cost Quality Decisions- Short Long Emphasis- Detection Prevention

Quality Element :

QM TQM Errors- Operations System Responsibility- QC Every Body Problem Solving - Managers Teams Procurement- Price Partners/JIT Manager’s Role- Plan Delegate Assign Coach Enforce Mentor Quality Element

Customer supplier focus in TQM:

Customer supplier focus in TQM

Customer and supplier:

Customer and supplier TQM focuses strongly on the importance of the relationship between customers (internal and external) and supplier. These are known as the "quality chains” and they can be broken at any point by one person or one piece of equipment not meeting the requirements of the customer. Failure to meet the requirements in any part of a quality chain has a way of multiplying, and failure in one part of the system creates problems elsewhere, leading to yet more failure and problems, and so the situation is exacerbated.

Customer supplier focus in TQM:

Customer supplier focus in TQM The core of TQM is the customer –supplier interfaces, both internally and externally There are two distinct types of customers i.e. external and internal. Internal customers are within the company-the colleagues working together for delivering a service or product for the external customer. An external customer may be an individual or an enterprise that hires or purchases the product(s) or service(s) from another person or business  in exchange of money. One of the most important factors for the success of an enterprise is its customers. Without them, a business cannot exist. But to capture customers, a business must try to find out what people want, how much and how often they will buy and how their post-purchase satisfaction will be ensured .

Customer types:

Customer types External and Internal customers External – current, prospective and lost customers Internal – Every person in a process is a customer of the previous operation.( applies to design,manufacturing,sales,supplies etc.) [Each worker should see that the quality meets expectations of the next person in the supplier-to-customer chain ] TQM is commitment to customer-focus - internal and external customers.

Customer/supplier chain:

Customer/supplier chain Inputs from external customers Internal customers Outputs to external customers

Internal customer/Supplier relationships:

Internal customer/Supplier relationships What do you need from me? What do you do with my output? Are there any gaps between what you need and what you get? Good team-work and inter-Departmental harmony is required. Also the leaders role in supervising the internal customer-supplier chain.

Customers (internal and external) :

Customers (internal and external) • Who are my customers? • What are their true needs and expectations? • How do, or can, I find out what these are? • How can I measure my ability to meet their needs and expectations? • Do I have the capability to meet their needs and expectations? (If not, what must I do to improve this capability?) • Do I continually meet their needs and expectations? (If not, what prevents this from happening when the capability exists?) • How do I monitor changes in their needs and expectations?

Suppliers (internal and external) :

Suppliers (internal and external) Who are my internal suppliers? What are my true needs and expectations? How do I communicate my needs and expectations to my suppliers? Do my suppliers have the capability to measure and meet these needs and expectations? How do I inform them of changes in my needs and expectations?

Supplier Involvement:

Supplier Involvement TQM pays attention to the suppliers or vendors of an organization Maintaining close and long-term relationships with suppliers results in achieving the best economy and quality Maintaining a close relationship with the suppliers help them to have a good understanding and a feel for their customers’ requirements Deming emphasized the importance of maintaining special relations with suppliers Deming stresses this and states: End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost by working with a single supplier.”

Benefits of TQM:

consistency Reduced production time Improvement in customer perceptions of the organization Reduction in the quantity of goods damaged in transit Reduced delivery time Benefits of TQM Customer Satisfaction Increase in sale Decrease in costs

Benefits of Quality:

Benefits of Quality Higher customer satisfaction Reliable products/services Better efficiency of operations More productivity & profit Better morale of work force Less wastage costs Less Inspection costs Improved process More market share Spread of happiness & prosperity Better quality of life for all.

The Cost of TQM:

The Cost of TQM Cost of TQM Benefits of TQM

The Cost of TQM:

The Cost of TQM Higher quality means higher cost The cost of improving quality is less than the resulting savings An enhancement in quality requires investment in terms of labor, materials, design and other resources. the additional benefits from improved quality do not compensate for the additional expenses the saving resulting from less rework, scrap, and other direct expense related to defects is the drive for continuous improvement of process. Costs include the indirect (hidden cost) costs such as lost customers, lost market share, and many hidden costs and opportunities, which are not identified by cost accounting systems Quality costs are those incurred in excess of those that would have been incurred if the product had been built

History of quality management:

History of quality management … To know the future, know the past ! Before Industrial Revolution, skilled craftsmen served both as manufacturers and inspectors, building quality into their products through their considerable pride in their workmanship . Industrial Revolution changed this basic concept to interchangeable parts . Likes of Thomas Jefferson and F. W. Taylor (“scientific management” fame) emphasized on production efficiency and decomposed jobs into smaller work tasks. Holistic nature of manufacturing rejected!

History of quality management:

History of quality management Statistical approaches to quality control started at Western Electric with the separation of inspection division. Pioneers like Walter Shewhart, George Edwards, W. Edwards Deming and Joseph M. Juran were all employees of Western Electric. After World War II, under General MacArthur's Japan rebuilding plan, Deming and Juran went to Japan. Deming and Juran introduced statistical quality control theory to Japanese industry. The difference between approaches to quality in USA and Japan: Deming and Juran were able to convince the top managers the importance of quality .

History of quality management:

History of quality management Next 20 odd years, when top managers in USA focused on marketing, production quantity and financial performance, Japanese managers improved quality at an unprecedented rate. Market started preferring Japanese products and American companies suffered immensely. America woke up to the quality revolution in early 1980s. Ford Motor Company consulted Dr. Deming to help transform its operations. (By then, 80-year-old Deming was virtually unknown in USA. Whereas Japanese government had instituted The Deming Prize for Quality in 1950.)

History of quality management:

History of quality management Managers started to realize that “quality of management” is more important than “management of quality.” Birth of the term Total Quality Management (TQM) . TQM – Integration of quality principles into organization’s management systems . Early 1990s: Quality management principles started finding their way in service industry . FedEx, The Ritz-Carton Hotel Company were the quality leaders. TQM recognized worldwide : Countries like Korea, India, Spain and Brazil are mounting efforts to increase quality awareness.

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