TOTAL QUALITY MANAGEMENT - Part 1

1

Total Quality Management (TQM) is an enhancement to the traditional way of doing business.

Total - Made up of the whole

Quality - Degree of Excellence a Product or Service provides.

Management - Art of handling, controlling, directing etc.

TQM is the application of quantitative methods and human resources to improve all the processes within an organization and exceed CUSTOMER NEEDS now and in the future.

DEFINING QUALITY : Quality can be quantified as follows

Q = P / E

where,

Q = Quality

P = Performance

E = Expectation

DIMENSIONS OF QUALITY :

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Dimension                   Meaning and Example

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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 of 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

QUALITY PLANNING

The following are the important steps for quality planning.

1. Establishing quality goals.

2. Identifying customers.

3. Discovering customer needs.

4. Developing product features.

5. Developing process features.

6. Establishing process controls and transferring to operations.

IMPORTANT POINTS TO BE NOTED WHILE QUALITY PLANNING :

1. Business, having larger market share and better quality, earn returns much higher than their competitors.

2. Quality and Market share each has a strong separate relationship to profitably.

3. Planning for product quality must be based on meeting customer needs, not just meeting product specifications.

4. For same products. We need to plan for perfection. For other products, we need to plan for value.

QUALITY COSTS

1. PREVENTION COST

Ø Marketing / Customer / User.

Ø Product / Service / Design Development.

Ø Purchasing

Ø Operations (Manufacturing or Service)

Ø Quality Administration.

2. APPRAISAL COST

Ø Purchasing Appraisal Costs.

Ø Operations Appraisal Costs

Ø External Appraisal Costs

Ø Review of Test and Inspection Data

Ø Miscellaneous Quality Evaluations

3. INTERNAL FAILURE COST

Ø Product or Service Design Failure Costs (Internal)

Ø Purchasing Failure Costs

Ø Operations (Product or Service) Failure Costs

4. EXTERNAL FAILURE COST

Ø Complaint Investigations of Customer or User Service

Ø Returned Goods

Ø Retrofit and Recall Costs

Ø Warranty Claims

Ø Liability Costs

Ø Penalties

Ø Customer or User Goodwill

Ø Lost Sales

ANALYSIS TECHNIQUES OF QUALITY COST

Ø The purpose of quality cost analysis is to determine the cost of maintaining a certain level of quality.

Ø Such activity is necessary to provide feedback to management on the performance of quality assurance and to assist management in identifying opportunities.