MMVA ZG 522 Total Quality

Management
Rajiv Gupta
BITS Pilani
Lecture 16
 Agenda
• Module 1
– Recap of Lecture 15
• Module 2
– Quality Management Sytems and ISO
• Module 3
– Principles of ISO 9000
• Module 4
– Clauses in ISO 9000
• Module 5
– Summary

2
 Session 16
• Begin Module 1
– Recap of Lecture 15

3
 Recap of Lecture 15
• In this lecture we discussed quality function
deployment QFD
• QFD is a powerful, systematic tool to convert the
voice of the customer into product and process
design
• QFD employs the house of quality to help analyze
customer requirements and convert them into
design features and process steps in a systematic
fashion

4
 Recap of Lecture 15
• We also discussed Failure Mode Effects Analysis
FMEA
• FMEA is a proactive tool that allows us to look at
product and process designs to reduce the impact of
various failure modes
• FMEA looks at the severity of the impact of a failure
mode, its likelihood of occurrence, and the
probability of detection

5
 Lecture 16
• End of Module 1

6
 Lecture 16
• Begin Module 2
– Quality Management Systems andISO

7
 ISO 9000 Origin
• ISO = International Organization for Standardization
• ISO 9000 standard was originally developed in 1987
to standardize quality requirements for European
countries within the common market and those
wishing to do business with those countries.
• ISO 9000 was revised in 1994 and again significantly
modified in 2000 (called ISO 9000:2000)

8
 Purpose of ISO 9000
• To unify quality terms and definitions used by
industrialized nations
• To demonstrate supplier’s capability of
controlling its processes
• To demonstrate focus on improving
performance

9
 ISO 9000
• ISO 9000 is a series of Quality Standards to facilitate
international trade by establishing common set of
standards-- to identify the key elements of quality
system.

• Organizations find that they have to achieve the ISO

9000 certification to meet both domestic and
international competition.

10
 ISO 9000

• The ISO 9000 family is primarily concerned with

"quality management". This means what the
organization does to fulfill:
- the customer's quality requirements, and
- applicable regulatory requirements,
while aiming to
- enhance customer satisfaction, and achieve
continual improvement of its performance
in pursuit of these objectives.
11
 ISO 9000
• The standards provide minimum criteria for
a quality system. These documents provide
some assurance to potential customers that
an organization certified as meeting the
standard has an adequate quality system.

12
 Quality System
• The quality System is comprised of all the
organization's policies, procedures, plans,
resources, processes, and delineation of
responsibility and authority, all deliberately aimed
at achieving product or service quality levels
consistent with customer satisfaction and the
organization's objectives.
• When these policies, procedures, plans, etc. are
taken together, they define how the organization
works, and how quality is managed. (Goetsch and
Davis, 1998).

13
 Quality System
• A quality system is the agreed on, company-wide
and plant-wide operating work structure,
documented in effective, integrated technical and
managerial procedures, for guiding the coordinated
actions of the work force, the machines, and the
information of the company and plant in the best
and most practical ways to assure customer quality
satisfaction and economical cost of quality.
(Feigenbaum).

14
 ISO 9000 Certification
• You can implement ISO 9000 without seeking
to have your management system audited and
certified as conforming to the standards by an
independent, external certification body
(called the registrar).

15
 Generic Standard
• The ISO 9000 is a set of "generic management system
standards".
• "Generic" means that the same standards can be applied:
- to any organization, large or small, whatever its
product
- including whether its "product" is actually a
service,
- in any sector of activity, and
- whether it is a business enterprise, a public
administration, or a government department.

16
 Quality Management System (QMS)
• ISO 9000 system requires implementation of a QMS
that conforms to the standard).
• Generic specification (Applies to any size and type of
organization)
• Registration of QMS is voluntary.
• QMS registration ensures customers or potential
customers that a supplier has a quality system in
place and is being monitored (audited by a third
party, who is a registrar).

17
 Documentation and Actions
• The essence of complying with ISO 9000 is:
- Say what you do (Document it)
- Do what you say (Keep records, i.e.
document)
- Record what you did (Document the
facts)
- Check on the results (Analyze and
record, i.e. document
- Act on the difference (Document corrective
action)

18
 Lecture 16
• End of Module 2

19
 Lecture 16
• Begin Module 3
– Principles of ISO 9000

20
 ISO 9000 QMS Principles

• The revised ISO 9000:2000 document defines the eight quality

management principles on which the quality management
system standards of series are based. These principles can be
used by senior management as a framework to guide their
organizations towards improved performance.
* Principle 1 Customer focus
* Principle 2 Leadership
* Principle 3 Involvement of people
* Principle 4 Process approach
* Principle 5 System approach to management
* Principle 6 Continual improvement
* Principle 7 Factual approach to decision making
* Principle 8 Mutually beneficial supplier relationships
21
 Principle 1: Customer focus

• Organizations depend on their customers and therefore

should understand current and future customer needs,
should meet customer requirements and strive to exceed
customer expectations.
• Key benefits:
- Increased revenue and market share obtained
through flexible and fast responses to market
opportunities.
- Increased effectiveness in the use of the
organization's resources to enhance customer
satisfaction.
- Improved customer loyalty leading to repeat
business.
22
 Principle 1: Customer focus
• Applying the principle typically leads to:
- Researching and understanding customer needs and
expectations.
- Ensuring that the objectives of the organization are
linked to customer needs and expectations.
- Communicating customer needs and expectations
throughout the organization.
- Measuring customer satisfaction and acting on the
results.
- Systematically managing customer relationships.
- Ensuring a balanced approach between satisfying
customers and other interested parties (such as
owners, employees, suppliers, financiers, local
communities and society as a whole). 23
 Principle 2: Leadership

• Leaders establish unity of purpose and direction of the

organization. They should create and maintain the internal
environment in which people can become fully involved in
achieving the organization's objectives.

• Key benefits:
- People will understand and be motivated
towards the organization's goals and objectives.
- Activities are evaluated, aligned and implemented
in a unified way.
- Miscommunication between levels of an
organization will be minimized.
24
 Principle 2: Leadership
• Applying the principle typically leads to:
- Considering the needs of all interested parties
including customers, owners, employees, suppliers,
financiers, local communities and society as a whole.
- Establishing a clear vision of the organization's future.
- Setting challenging goals and targets.
- Creating and sustaining shared values, fairness and
ethical role models at all levels of the organization.
- Establishing trust and eliminating fear.
- Providing people with the required resources, training
and freedom to act with responsibility and
accountability.
- Inspiring, encouraging and recognizing people's
contributions. 25
 Principle 3: Involvement of people
• People at all levels are the essence of an organization and
their full involvement enables their abilities to be used for the
organization's benefit.
• Key benefits:
- Motivated, committed and involved people
within the organization.
- Innovation and creativity in furthering the
organization's objectives.
- People being accountable for their own
performance.
- People eager to participate in and contribute to
continual improvement.

26
Principle 3: Involvement of people

• Applying the principle typically leads to:

- People understanding the importance of their
contribution and role in the organization.
- People identifying constraints to their performance.
- People accepting ownership of problems and their
responsibility for solving them.
- People evaluating their performance against their
personal goals and objectives.
- People actively seeking opportunities to enhance
their competence, knowledge and experience.
- People freely sharing knowledge and experience.
- People openly discussing problems and issues.
27
 Principle 4: Process approach
• A desired result is achieved more efficiently when
activities and related resources are managed as a
process.
• Key benefits:
- Lower costs and shorter cycle times
through effective use of resources.
- Improved, consistent and predictable
results.
- Focused and prioritized improvement
opportunities.

28
 Principle 4: Process approach
• Applying the principle typically leads to:
- Systematically defining the activities necessary to obtain
a desired result.
- Establishing clear responsibility and accountability for
managing key activities.
- Analyzing and measuring of the capability of key
activities.
- Identifying the interfaces of key activities within and
between the functions of the organization.
- Focusing on the factors such as resources, methods, and
materials that will improve key activities of the
organization.
- Evaluating risks, consequences and impacts of activities
on customers, suppliers and other interested parties.

29
 Principle 5: System approach to
management
• Identifying, understanding and managing interrelated
processes as a system contributes to the organization's
effectiveness and efficiency in achieving its objectives.
• Key benefits:
- Integration and alignment of the processes that
will best achieve the desired results.
- Ability to focus effort on the key processes.
- Providing confidence to interested parties as to
the consistency, effectiveness and efficiency of
the organization.

30
Principle 5: System approach to
management
• Applying the principle leads to:
- Structuring a system to achieve the organization's
objectives in the most effective and efficient way.
- Understanding the interdependencies between the
processes of the system.
- Structured approaches that harmonize and integrate
processes.
- Providing a better understanding of the roles and
responsibilities necessary for achieving common objectives
and thereby reducing cross-functional barriers.
- Understanding organizational capabilities and establishing
resource constraints prior to action.
- Targeting and defining how specific activities within a
system should operate.
- Continually improving the system through measurement
31
and evaluation.
Principle 6: Continual improvement
• Continual improvement of the organization's overall
performance should be a permanent objective of the
organization.
• Key benefits:
- Performance advantage through
improved organizational capabilities.
- Alignment of improvement activities at all
levels to an organization's strategic intent.
- Flexibility to react quickly to opportunities.

32
Principle 6: Continual improvement

• Applying the principle typically leads to:

- Employing a consistent organization-wide
approach to continual improvement of the
organization's performance.
- Providing people with training in the methods
and tools of continual improvement.
- Making continual improvement of products,
processes and systems an objective for every
individual in the organization.
- Establishing goals to guide, and measures to track,
continual improvement.
- Recognizing and acknowledging improvements.
33
 Principle 7: Factual approach to
decision making
• Effective decisions are based on the analysis of data
and information
• Key benefits:
- Informed decisions.
- An increased ability to demonstrate the
effectiveness of past decisions through
reference to factual records.
- Increased ability to review, challenge
and change opinions and decisions.

34
 Principle 7: Factual approach to
decision making
• Applying the principle typically leads to:
- Ensuring that data and information are
sufficiently accurate and reliable.
- Making data accessible to those who
need it.
- Analyzing data and information using
valid methods.
- Making decisions and taking action
based on factual analysis, balanced
with experience and intuition.

35
 Principle 8: Mutually beneficial
supplier relationships
• An organization and its suppliers are interdependent and a
mutually beneficial relationship enhances the ability of
both to create value
• Key benefits:
- Increased ability to create value for both parties.
- Flexibility and speed of joint responses to changing
market or customer needs and expectations.
- Optimization of costs and resources.

36
 Principle 8: Mutually beneficial
supplier relationships
• Applying the principle typically leads to:
- Establishing relationships that balance short-
term gains with long-term considerations.
- Pooling of expertise and resources with
partners.
- Identifying and selecting key suppliers.
- Clear and open communication.
- Sharing information and future plans.
- Establishing joint development and
improvement activities.
- Inspiring, encouraging and recognizing
improvements and achievements by suppliers.

37
 Lecture 16
• End of Module 3

38
 Lecture 16
• Begin Module 4
– Clauses in ISO 9000

39
ISO 9001 Standard includes eight
clauses:

40
 ISO 9001 Standard: clauses
1. Scope: The purpose of the standard is demonstrate
an organization’s ability to provide a
product/service that meets customer and
regulatory requirements and achieves customer
satisfaction.
2. Normative Reference: ISO 9000:2000 provide
fundamentals and vocabulary.
3. Terms and Definitions

41
 ISO 9001Standard: clauses
4. Quality Management System
– General Requirements The organization shall establish,
document, implement and maintain a QMS and
continually improve its effectiveness.
– Documentation: Documentation shall include: quality
policy, quality manual, required documented
procedures, needed documents to ensure effective
planning, operation, and control of processes, and
required records.

42
 ISO 9001Standard: clauses
5. Management Responsibility: Top
management shall provide evidence of
commitment to the development,
implementation, and continual
improvement of QMS by communication,
quality policy, quality objectives,
management reviews, and availability of
resources.

43
 ISO 9001Standard: clauses
6. Resource Management: The organization
shall determine and provide resources
needed for QMS (implementation and
continual improvement) and to enhance
customer satisfaction. Resources may be
people, infrastructure, work environment,
information, suppliers, natural and financial
resources.

44
 ISO 9001Standard: clauses

7. Product Realization: The organization shall plan and

develop the processes for product realization.

7.1 Planning and Product Realization

7.2 Customer-related processes
7.3 Design and development
7.4 Purchasing
7.5 Product and Service Provision
7.6 Control of monitoring and measuring
devices

45
 ISO 9001Standard: clauses

8. Measurement, Analysis and Improvement:

The organization shall plan and implement the monitoring,
measurement, analysis, and improvement processes
needed to demonstrate conformity of product, to ensure
conformity to QMS, and to continually improve the
effectiveness of the QMS.
8.1 General
8.2 Monitoring and measurement
8.3 Control of non-conforming product
8.4 Analysis of data
8.5 Improvement
46
 Advantages of Commonized
Standards

• Enhanced customer/supplier communications &

relationships
• Platform for continuous improvement
• Efficient management of external audits
• Worldwide standards
• Increased competitiveness which results in overall
cost reduction
• Industry benchmarks for performance / progress
metrics
47
 Quality Management System
(QMS)
• Organization shall establish, document, maintain a
QMS and continually improve its effectiveness.
• Identify processes (activities, resources,
measurements)
• Determine their sequence and interaction
• Determine criteria and methods for effective
operation and control of the processes

48
 Quality Management System
(QMS)
• Ensure availability of resources and information to
support and monitor the processes
• Implement actions to achieve planned results
• Document quality policy, procedures, quality manual,
document control and recording procedures
• Top management shall provide evidence of its
commitment to QMS.

49
 Documentation
• Documents form the basis of ISO 9000 registration.

• ISO 9000 requires that documented procedures be in place

and that records be kept to verify that procedures be
followed. Audits will focus on documentation. Documents
include procedures, process flow diagrams, plans, contracts
with specifications, all telling what you are going to do, and
written records, logs, organization charts, internal audit
reports, and the like all telling what you actually did.

50
 Lecture 16
• End of Module 4

51
 Lecture 16
• Begin Module 5
– Summary

52
 Summary of Lecture 16
• In this lecture we discussed Quality
Management Systems and ISO
• ISO is a worldwide quality standard that helps
customers and suppliers ensure standard
processes that help improve the quality of the
product and services
• It is important that companies do not just
focus on obtaining the certification, but also
practice QMS on a daily basis
53
 Lecture 16
• End of Module 5

54