TOTAL

QUALITY
MANAGEMENT
Corse Code: MGT-1010
Slot : A2 Class No.: 5005519 Venue: SJT-703
WINTER Semester (2017- 18)
Faculty : J P Majumdar, Professor
 QUALITY
QUALITY of the product means how satisfactory are its
functions & performance and how close or perfect it is to
its specifications, as recommended by the designer or required by
the consumers.
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Quality Criteria :
(i) Configuration/Shape, (ii) Size/Dimensions,
(iii) Tolerances, (iv) Finish, (v) Material of construction,
(vi) Physical Properties ((Hardness, Tensile/
Compressive/Bending Strength, etc,)
(vii) Performance characteristics like speed,
efficiency, cooling rate, heating rate, fuel
consumption-rate, power consumption-rate, etc.
(ix) Get-up/ Look /aesthetic, etc.
 Defining QUALITY
Quality has been defined by the quality-GURUs and by ISO as follow :

1) “Fitness for use” or “fitness for the purpose”  Juran

2) “Conformation to the customer’s requirements”  Crosby

3) “Total composite of the CHARACTERISTICS of products & services,

to meet the need and expectations of the consumer”  Feigenbum

4) TOTALITY of FEATURES and CHARACTERISTICS of

products/ services that bear on its ability to satisfy the (i) STATED
as well as (ii) IMPLIED NEEDS of the users.  ISO : 840
5) DEGREE of CAPABILITY of the product to FULFILL the consumer’s
requirement by the inherent characteristics and features of the
product.
 Definition of QUALITY
Finally, QUALITY of a product can be defined as
The MEASURE of the product’s CONFORMANCE (how close it is) to its
SPECIFICATIONs
– (i) based on the requirement / expectation of the customer /
consumer . or
– (ii) as specified by the designer, or
– (iii) as recommended by the relevant STANDARDS,

.
Therefore, the Quality can be measured and expressed as,
Product’s actual specification / Performance _______ .
QUALITY = Designed Specification or specified Expectation /Requirement
of the users
[It can be expressed in %].
 RELIBILITY
RELIBILITY of the product is the PROBABILITY that the
product will maintain its QUALITY & PERFORMANCE
– as per the product SPECIFICATION (as defined)
– during the SPECIFIED LIFE TIME
– under the SPECIFIED (i) OPERATING as well as
(ii) ENVIRONMENTAL CONDITION.

Reliability is the PROBABILITY of successful

performance of the product (goods or services).
 INTRODUCTION to TQM
 Before implementation of the Quality Management concept, the manufacturing was
primarily INSPECTION-ORIENTED (ie ACCEPTANCE or REJECTION at the final Pre-
shipment Inspection.).
Total Quality Management (TQM) is the Quality Drive with:
 ALL OUT (i) “QUALITY awareness”, (ii) “QUALITY- commitment” &
(iii) “Participation & involvement” of
all employees of the organization
 at ALL LEVELS (management to workforce)
 in ALL DEPARTMENTs / SECTIONs of the organization,
 with close coordination among ALL the departments of the
organization and ALL the stakeholders including the Suppliers / Contractors
and the Customers / Consumers
 not only to MEET but also to EXCEED the customer need and expectations,
along with CONTINUOUS IMPROVEMENT,
 mainly for achieving the market competitiveness leading
towards the “business excellence”.
 Basic issues related to TQM Concept
1. A committed and involved Management to provide long term
organizational support
2. Effective Involvement & participation of entire workforce on
quality
3. Unwavering Focus on the Customers, both internal & external
4. Quality Planning & Quality Strategies
5. Maintaining the planned Quality Level
6. Establish Self-Performance Measurement and Monitoring, along
with the Process Control and Quality Control
7. Establish effective Quality Management System (QMS) to achieve
Quality Assurance
8. Continuous Quality Improvement * through improvement of
materials, business process and production process.
9. Close Coordination & Cooperation : inter-departmental and among
stakeholders (Customer, Suppliers/Contractors, Supply Chain members)
10. Information Management & Knowledge Management.
 FRAMEWORK required for
successful implementation of TQM
1. TQM Tools and techniques
2. Customer as well as Supplier Involvement
3. Management Leadership & Commitment
4. Training & Development at all levels
5. Awareness, Participation & Involvement of all
employees
6. Teamwork (cross functional and also within the functional
area)
7. Cross-functional Communication System, supported by
information & Feed-back system
8. Quality Management System (QMS) and Quality
Assurance
9. Statistical Quality Control
10. Performance measurement
11. Continuous Improvement
12. Self-assessment and Benchmarking
 TQM TOOLS & Techniques
1. Quality Planning
2. Statistical Quality Control (SQC)
3. QFD (Quality Function Deployment)
4. FMEA (Failure Mode & Effect Analysis)
5. FTA (Fault Tree Analysis)
6. QUALITY CIRCLE (for Continuous improvement)
7. Total Productive Maintenance (TPM)
8. Deming Wheel (PDCA Cycle) [Plan, Do, Check, Act]
for quality improve
9. Why-Why (Root Cause Analysis)
10. Brainstorming
11. Poka Yoke
12. (Ishikawa) Fish Bone Analysis (Root Cause Analysis)
13. Self Assessment & Benchmarking (for Continuous
improvement)
14. Six Sigma
 CAUSES of Failure of TQM implementation
1) Lack of Management commitment and Leadership
2) Inability to change towards good Organizational Culture
3) Management’s interest on Long Term Goal rather than
Short Term Benefits
4) Lack of effective Training & Development on Quality
Improvement techniques, Quality Problem
Identification solving, Quality management, etc.
5) Lack of integration and coordination : Incompatible
Organization structure with isolated individuals and departments.
6) Ineffective / Lack of Self Performance Measurement as
well as BENCH-MARKING.
7) Lack of Knowledge Management & Information Technology
& Management
8) Lack of Team work among the manpower.
9) Failure in having continuous improvement.
10)Unfavourable Industrial Relation
11)Lack of Quality Awareness & Quality Culture among the
employees
 BENEFITS of TQM :
1) Improvement of Quality of products and services,
2) Consistency of quality level with assured quality
3) Achieving Customer-satisfaction
4) Reduction of cost
5) Productivity improvement(Quality Cost is reduced)
6) Increase of PROFITABILITY and ROI (due to : (i) increase of
productivity, customer satisfaction & market demand, (ii) enhanced motivation
& involvement of employee and (iii) reduction in Quality Rejection)
7) Increase in Market Share (improvement of quality &
reliability of products & services and reduction of cost leading
to higher customer satisfaction and thus market-competitiveness)
8) Increase in Team work and coordination
9) Increase in Employees’ involvement and participation
10) Increase of Employees’ job-satisfaction & motivation
11) Improved Industrial Relation inside & outside
12) Improvement of Communication – both internal and external
13) Improvement of Delivery commitment
 JOURNEY OF TQM
Statistical Methods applied 1920s – 1940s Walter Shewhart, Father of Statistical
to Quality Control Quality Control & the pioneer in modern
Quality Approach
1940s
Edward Deming :14 Points Total
Increased emphasis on Quality Program, Management
Process Improvement Leadership, Deming Wheel (PDCA),
Continuous Improvement
Japan emerges as a Quality
1950s
Leader Deming assists Mac Arthur in Japan
Kaoru Ishikawa (Quality Circle, Fish Bone
Japan emerges as the World 1960s – 1970s Analysis) & Genichi Taguchi (Quality
Quality Leader Loss-Function, Robust Design, Signal-
Noise Ratio)
1950–19 70s
Total Quality Control in United Juran (Quality Triology & Quality Cost), &
States A. Feigenbum (Management Leadership &
commitment, Employees’ Involvement)

Zero-Defect Movement in the 1970 – 1980s Philip Crosby (Zero Defect, “Quality is
United States free”), Shigeo Shingo (Poka Yoke)
KANO (Customer-Voice), QFD, Six -Sigma,
TQM today 1980s – to-date FMEA, FTA, SERVQUAL, DOE, BPR, LEAN
concept
 EVOLUTION of TQM
1) WALTER SHEWHART (1920s): an employee of Bell Telephone developed
technical tools of Statistical Quality Control, which are foundation of modern
Quality Management. He is called “Father of Statistical Quality Control”. He
introduced the philosophy of “Quality Assurance”.
2) EDWARD DEMING (1940s): being a disciple of Shewhart, he changed the
focus of Quality Assurance from technical/statistical aspect to Managerial
commitment, support and responsibility.
He advocated “continuous improvement” of production process.
Deming discouraged inspection only at final stage and recommended quality
checking at every stage from the beginning (raw materials).
He also recommended extensive Involvement of operators (who knows the
machines, process and problems more deeply) in quality maintenance and
improvement.
He also prescribed the thorough Training of operators on Quality Control and
Improvement Techniques and methods.
“Deming Wheel” ie P-D-C-A Cycle is an important technique for solving quality
problem and continuous quality improvement.
Deming’s “14 Points Philosophy” has major influence on modern TQM.
 EVOLUTION of TQM - 2

3) JOSEPH JURAN (1950s) : Juran included Quality in the Strategic Planning

process. “ Juran Triology” is the three universal sequences or three phases of
application of quality, which is suitable for any industry. Juran Triology includes
(1) Quality Planning, (2) Quality Control and (3) Quality Improvement.
Juran’s COST OF QUALITY is an important concept for Quality decision.
4) A. FEIGENBUM (1960s) : emphasized on Management Leadership &
Commitment and introduced TQM as a “total committed effort, company-wide
from the management to employees throughout the organization”, to improve
quality continually.
5) PHILIP CROSBY (1970s) : He emphasized on “Cost of Poor Quality” (like
loss in cost of manpower, materials, machine-hour, loss of sales, cost of
Customer dissatisfaction, etc).
He advised for “ZERO DEFECT” production.
He indicated “Four Absolutes” of Quality Management as,
(1) Quality should be in conformance to requirements,
(2) Prevention of non-conformance is Objective but not appraisal,
(3) Performance Standard is Zero Defect, not ‘that is close enough’
(4) Measurement of quality is through Cost of Non-conformance.
He prescribed 14 point Prescription for Quality Improvement.
 EVOLUTION of TQM - 3

6) K. ISHIKAWA (1970s) : He promoted “QUALITY CIRCLE” and “FISH-BONE

DIAGRAM” of Cause & Effect Analysis. His philosophy that “a quality
organization is needed to create a quality product or service” has been
accepted as the base of modern TQM.

7) Genichi Taguchi (1980s) : He developed “QUALITY LOSS FUNCTION”

concept which combines Cost, Target and Variation in performance
Characteristics into one metric. Because Quality Loss Function is reactive, he
developed “Signal to Noise Ratio” as a proactive equivalent. Robust Design of
parameters & tolerance is the outcome of his philosophy.
QUALITY
COST
 QUALITY COST CONCEPT
Quality cost is the costs associated with providing quality of the product or
service ie cost incurred to ensure perfect / approved quality of product or
service.
Exposed part of quality cost : Cost of scrap, re-work, re-order, defects /
rejects, re-inspection & testing, etc.  which can be measured/estimated
immediately.
Hidden part of quality cost : Return of defectives, over-time for re-doing,
penalty / late-fee for failure, customer dissatisfaction, complaint-handling cost,
excessive inventory, field service cost, loss of sale, over-head cost, etc. 
whose effect / impact can be felt / indirectly measured after a considerable
period (not immediately).
JURAN’s Concept on QUALITY COST is the costs associated with providing
quality of the product or service (cost incurred to ensure perfect / approved
quality of product or service) and the cost of production of defectives as well as
the loss for generation of defectives.
QUALITY COST (QC)
= Cost of Conformance (COC) + Cost of Non-conformance (CON)

 QC = COC + CON
 QUALITY COST, QC = COC + CON
Where,
 Cost of Conformance (COC)
= Quality Prevention Cost + Quality Appraisal Cost
 Cost of Non-conformance (CON)
= QUALITY Failure COST (Cost of Defectives)
= Q Failure Tangible Cost + Q. Failure Intangible Cost

QUALITY COST (QC)

= Cost of Conformance + Cost of Non-conformance
= (Quality Prevention Cost + Quality Appraisal Cost) +
Q Failure Tangible Cost + Q. Failure Intangible Cost)
 QUALITY COST CONCEPT

Quality Cost

Cost of Conformance(COC) Cost of Non-conformance(CON)

[Cost for Quality drive] [Quality Failure Cost]

+ +
Quality Quality Quality Quality
Prevention Appraisal Failure Failure
Cost Cost Tangible Intangible
Cost Cost

Exposed part of Hidden part of

Quality Cost Quality Cost

s
 QUALITY COST COMPONENTs
1) Quality PREVENTION COST : Cost required to prevent the
generation of poor quality. It includes :
(i) Quality Planning Cost
(ii) Cost of Design & Review of product & process for Quality
improvementx
(iii) Cost of Training & Development of employees for quality
(iv) Cost of Review of Vendor Quality & Capability
(v) Cost of Process Improvement Cost
(vi) Cost of Information Management t (data collection, recording, data
processing & analysis)
(vii) Cost of Improvement of Equipment, Instrument,
Infrastructure

2) Quality APPRAISAL COST : Cost associated with quality

measurement like, Inspection, checking, testing, measuring, evaluating
and auditing of quality of product to ensure, whether the quality conforms to
quality specifications or quality requirements.
2) Quality FAILURE COST :
Cost associated with Quality Failure/Rejections It includes,
(i) SCRAP ie REJECTIONS which are not repairable/re-workable,
(to be disposed)
(ii) RE-WORKING / Repairing of quality-rejections,
(iii) Re-ordering for additional materials for Re-making/Re-working
/ Repairing
(iv) Servicing at site when the product fails in operation,
(v) REPLACEMENT of DEFECTIVE products by new ones (Re-making),
(vi) Process failure analysis to solve quality problems
(vii) Process-downtime (shutting down the production process to prevent
continuing generation of defects and to locate the problem
and then to fix / rectify the problem
(viii) Price discount (if any) the poor quality (may be sold at lower price as
“Second” grade products).
(ix) PENALTY for late delivery, caused from delay in delivery due to quality
failure.
(x) EXCESSIVE Inventory of material & components to replace the defectives.
 JURAN’s Quality-COST Optimization :
Juran expressed that Total Quality Cost has two components
(i) Cost of Conformance (COC): (Qlty Prevention Cost + Qlty Appraisal Cost)
(ii) Cost of Non-conformance (CON) : Quality Failure Tangible Cost +
Cost Quality Failure Intangible Cost

QUALITY COST (QC)

Min. Cost ● COC (Cost of Conformance)

CON (Cost of Non-conformance)

Quality
0 % quality Q* 100 % quality
(100% defectives) Optimum Quality (100% defect-free)
 QUALITY is FREE
QUALITY COST , QC = COC + CON
= Cost of Conformance + Cost of Non-conformance

• Cost of Conformance (COC)

= Quality Prevention Cost + Quality Appraisal Cost
• Cost of Non-conformance (CON)
= Q Failure Tangible Cost + Q. Failure Intangible Cost
CON > > COC
--------------------------------------------------------------------------------------------------------------------------------
Q) Quality Guru CROSBY said “Quality is FREE”, justify.
As, per unit product, CON >> COC , because COC is
negligibly small with respect to QC ( QC =CON+COC);
ie Quality conformance cost (COC) is negligible.
The cost of Quality drive is almost zero. As such, it may
be concluded that Quality ie Quality drive is free.
 Determinants (Customer Attributes) for
PRODUCT QUALITY
1) CONFORMANCE : Closeness to the specified Design charac-
teristics and relevant Standards as well as good Industrial Practice
& Workmanship
2) PERFORMANCE : How better are Basic Performance charac-
teristics of the product like, dimensions and fits & tolerances, capacity,
efficiency, max. speed, speed pick-up rate, energy consumption rate, Heating
rate, cooling rate, etc.
3) FUNCTIONAL FEATURES : Secondary (additional) FUNCT-
IONAL Features added to the product, like (i) remote control to air
conditioner or TV or car door lock; (ii) high memory, camera & inter-net to
cell phone, (iii) Grinder, juicer, mincer, etc. attachment to Mixer.
4) RELIABILITY : Probability that the product will perform properly (as
per specifications) throughout its specified life, under specified operating &
environmental conditions.
5) DURABILITY (SPECIFIED LIFE) : Specified useful Life of Performance
(may be with repair & maintenance)
 Determinants (Customer Attributes) for Product Quality Contd….
6) SERVICEABILITY : Degree of ease to have repair & mainte-nance,
responsiveness to complaints and speedy redressal / solution of the problems
on workability.
7) OCCUPATIONAL SAFETY : safety for the (i) user / operator in working
area, (ii) surroundings and (iii) the society.
8) USER-FRIENDLINESS : Easy and quick to use / operate, and not
requiring any special skill or knowledge.
9) ENVIRONMENT-FRIENDLINESS : (i) not polluting the environment
and (ii) less depleting the natural resources
10) RESPONSIVENESS : human to human interface (courtesy and care ) toward
customer & consumer during & after order execution.
11) AESTHETICS : look, finish, taste, smell, feel and sensory characteristics
12) Customizability / Flexibility for modification as per the change in
customer taste & requirement on quality, quantity and other terms
 Determinants (Dimensions) of SERVICE QUALITY
1. TIMELINESS : Promptness and speed in rendering service (less waiting time)
2. COMPLETENESS : of job covering full (complete) scope of work / responsibility (not
half-done service)
3. RELIABILITY : (i) Accuracy of bills, (ii) keeping records correctly,
(iii) Performing at designated time
4. COMPETENCE : Adequate (i) knowledge, (ii) skill & (iii) experience of the
service personnel
5. CREDIBILITY : (i) Trustworthy-ness and (ii)) Honesty in rendering services
6. SECURITY : (i) Physical & occupational safety, (ii) Confidentiality,
(iii) Financial Security, (iv) against any other risk
7. COURTESY : Employee’s treatment with and care to the customer, like
(i) Politeness, (ii) friendliness, (iii) cooperation, (iv) paying regard and importance to
Customer, (v) neat & pleasing appearance of operating & contact personnel
8. CONSISTENCY : Maintaining same level of effectiveness and quality of service,
9. ACCESSIBILITY : Ease of customer to access for getting the service in
(i) simple way, (ii) Less waiting time (not long queue) , (iii) convenient hours for
contact / access /service, (iv) convenient location of service facility
10. ACCURACY : How rightly / correctly the service is performed
11. RESPONSIVENESS : How efficiently, effectively and promptly the employee and
company REACT against the service requirement or complaints.
12. COMMUNICATION : explaining clearly on (i) the service itself, (ii) cost of service, (iii)
time of service, (iv) status/progress of the service, (v) any other problem with assuring
that it will be taken care of and solved at the earliest.
 QUALITY INDEX
Quality Cost can be expressed / interpreted in a meaningful way by QUALITY
INDEX which is the ratio of QUALITY COST and a BASE cost-value (like
Sales Turnover or Total Production Cost)
QUALITY – SALES Index = Total Quality Cost
Total Sales Revenue
QUALITY – COST Index = Total Quality Cost
Total Production Cost
[Index shows the trend of quality improvement.
REDUCTION of QUALITY INDEX indicates “quality improvement”.]
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QUALITY – PRODUCTIVITY Ratio (QPR)

QPR = QUANTITY of Good quality units .

Total PROCESSING COST + Total RE- WORKING COST
= Quantity of Good quality units .
(Processed quantity x Processing cost per unit) +
(Re-workable quantity x Re- working cost per unit)
[ It measures the trend of Productivity improvement. QPR can be increased by
the way of
(i) Quality improvement , and/or (ii) reducing of re-working cost,
and/or (iii) reducing the processing cost.]
Example-1 on QPR
H S Motor Co. produces electric motors at a processing cost of $30 per unit and
defective ones can be reworked at an average cost of $12 per unit.
The Co. produces 100 motors/day out of which 80% are of good quality and 50% of
the defective products can only be reworked to acceptable quality level.
The Co. wants to improve the productivity and ask you to give your impression on the
effect of following 4 different proposals on productivity improvement :

(i) Increase the production rate to 200 motors/day,

(ii) Reduce the processing cost to $27 and reworking cost to $10 per unit,
(iii) Increase the yield of good quality product to 95%, by process
improvement, with increase in processing cost to $ 30.20 per unit,
(iv) Increase the product yield of good quality to 85% by process
improvement, along with reduction of reworking cost to $10 per unit.
Solution-1
Existing QPR, QPR0 = 80 + 0.5 x 20 = 0.0289
100x$30 + 10x$12
Proposal-1 : Increase the production rate increased to 200 motors/day,
QPR1 = 160 + 0.5 x 40 = 0.0289 QPR1 = QPR0
200x$30 + 20x$12
Proposal-2 : Reduce the processing cost to $27 and reworking cost to $10,
QPR2 = 80 + 0.5 x 20 = 0.03214 QPR2 > QPR0
100x$27 + 10x$10
Proposal-3 : Increase the product yield of good quality by quality improvement to 95%, with
increase in processing cost to $ 30.20 per unit,
QPR3 = 95+ 0.5 x 5 = 0.03197 QPR3 > QPR0
100x$30.20 + 2.5x$12 QPR3 < QPR2
Proposal-4 : Increase the product yield of good quality by quality improvement to 85%, along
with reduction of the reworking cost to $10,
QPR4 = 85+ 0.5 x 15 = 0.03008 QPR4 < QPR3
100x$30 + 7.5x$10

QPR2 > QPR3 > QPR4 >QPR1 & QPR0

QPR is maximum in Proposal-2 (by Reducing the processing cost to $27 and reworking cost to
$10). So, proposal-2 may be adopted for Productivity improvement.
Example-2 on QPR
H S Motor Co. produces electric motors at a processing cost of $30 per unit
and defective ones can be reworked at an average cost of $12 per unit.
The Co. produces 100 motors/day out of which 80% are of good quality and
50% of the defectives can only be reworked to acceptable quality level.
The Co. wants to improve the productivity and ask you to give your impression
on the effect of following 4 different proposals on productivity improvement,
(i) Increase the production rate to 200 motors/day,
(ii) Reduce the processing cost to $26 and reworking cost to $10,
(iii) Increase the product yield of good quality to 95%, by process
improvement,
(iv) Increase the product yield of good quality to 95% by process
improvement, along with reduction of the processing cost to $26
and reworking cost to $10.
Solution-2
Existing QPR, QPR0 = 80 + 0.5 x 20 = 0.0289
100x$30 + 10x$12
Case-1 : Increase the production rate increased to 200 motors/day,
QPR1 = 160 + 0.5 x 40 = 0.0289 QPR1 = QPR0
200x$30 + 20x$12
QPR is unchanged and Productivity will not improve.
Case-2 : Reduce the processing cost to $26 and reworking cost to $10,
QPR2 = 80 + 0.5 x 20 = 0.0333 QPR2 > QPR1
100x$26 + 10x$10
QPR is increased and Productivity will improve by reducing the processing cost and reworking cost.
Case-3 : Increase the product yield of good quality by quality improvement to 95%,
QPR3 = 95+ 0.5 x 5 = 0.0322 QPR3 > QPR0
100x$30 + 2.5x$12 QPR3 < QPR2
QPR is increased and Productivity will improve by quality improvement.
Case-4 : Increase the product yield of good quality by quality improvement to 95%, along with
reduction of the processing cost to $26 and reworking cost to $10,
QPR4 = 95+ 0.5 x 5 = 0.0371
100x$26 + 2.5x$10
QPR4 > QPR2 > QPR3 >QPR1 & QPR0

QPR is maximum improved in case-4 (by quality improvement along with reducing the processing cost and
reworking cost ) and so may be selected for Productivity improvement.
 Example-3 on QPR ASSIGNMENT -1
H S Motor Co. produces electric motors at a processing cost of $30 per unit
and defective ones can be reworked at an average cost of $12 per unit.
The Co. produces 100 motors/day out of which 75% good quality and 40% of
the defectives can only be reworked to acceptable quality level.
The Co. wants to improve the productivity and ask you to give your impression
on the effect of following 4 different proposals on productivity improvement,
(i) Increase the production rate by 50%,
(ii) Reduce the processing cost to $25 and reworking cost to $10,
(iii) Increase the product yield of good quality by quality improvement to 85%,
(iv) Increase the product yield of good quality by quality improvement to 95%,
by increase of the processing cost to $31.