Total Quality Management

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• Total quality management is both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization.

• Encompasses mobilizing the entire organization to satisfy the demands of the customers.

• TQM is focused on routine involvement and participation of everyone in the organization in the systematic improvement of quality.

• It involves each individual and group within all parts of the organization.


• TQM provides a way of life to constantly improve performance at every level and at in every activity, by creating a positive environment for continuous improvement based on

- Team work

- Trust and Respect

- Examining the processes in a systematic manner



Deming’s Chain Reaction

Improve quality

Decrease costs due to less rework, fewer mistakes, fewer delays and snags, and better use of time and materials

Improve productivity

Capture the market with better quality and lower prices

Stay in business Provide steady jobs and more jobs.


A shift from traditional approaches to quality


-Quality standards -Statistical quality techniques -Process performance -Treating quality problems


-Quality systems (ISO 9000) -Quality planning - Quality policy - Quality costing - Problem solving

INSPECTION -Error detection


-Involvement of all employees, customers and suppliers - Empowered employees - Teamwork - Quality strategy based upon a common mission and vision -Process oriented



• TQM can be perceived as being concerned with the following

- Meeting the needs and expectations of customers.

- Covering all parts of the organization

- Examining all costs which are related to quality - Doing things right the first time i.e. quality

designing rather than inspecting.

- Developing the systems and procedures which support quality and improvements

- Developing a continuous process of improvement


• TQM concerns incremental and ongoing improvement of yourself, your work, and your organization.

• The Kaizen philosophy is imbedded in the TQM concept and encompasses continuous and gradual improvement of all employees in the organization.

• Leads to improvement in employees’ personal output on a daily basis



Important Kaizen Rules

• Work with and according to guidelines

• Problems are opportunities for


• Retrieve information where it happens

• Consider the facts

• Work according to the plan

• Avoid waste

• Order and neatness

• Keep appointments


Deming Wheel- focal point in Kaizen


• In the Kaizen approach “Deming Wheel” is central, consisting of a cycle of activities necessary for effective quality improvement.

• The cycle consists of Plan, Do, Check, and Act. 1. Plan

- Define the problem, analyze the causes and draft an action plan for solving the problem.

- Determine the quality objectives, and critical success factors.

- Define performance indicators, collect and analyze the process data, generate the possible solutions.


2. Do

- Implement the plan on a limited scale or conduct an experiment to test the proposed improvement.

- Train all involved employees in the use of quality improvement methods and techniques.

- Describe the process which is considered for improvement and form project teams to lead the process.

3. Check

- Evaluate the trial project with performance indicators. - Verify whether the improvement has been successful. - What have we learnt?


4. Act

- Implement proven improvements.

- The improvements are documented in standard procedures so all employees involved are well informed on how to handle in future.

- Usually the cycle gets repeated under different circumstance and conditions to test how consistent the results are.



Quality Principles

A. Customer focus and customer involvement - Employees regularly visit their customers. - Customers are known and understood

- Customers’ needs are integrated in the activities.

- More is being done than the customer expects - Satisfied customers are priority number one.

- Changing customer needs are systematically collected and lead to improvement. 12


B. Involvement of all employees

• Voluntary total involvement of everyone.

• Teamwork that leverage the knowledge and provides synergy based on open communication, respect and trust.

• Skills are developed on the basis of “Learning

by doing”.

• Decisions on the basis of consensus.

• The present situation is open for discussion. • Investing in knowledge.

• Empowered employees



C. Consistency of purpose

- An inspiring mission and vision is developed and communicated to all organizational levels.

- SMART- goals are formulated and preserved. (Specific, Measurable, Achievable, Realistic, and Time specific).

- Managers are consistent in their behaviour regarding these goals.

- Guidance is given to quality improvement process. - There is commitment at top management.


D. Act according to facts

- Work according to facts and not based on rumours or feelings.

- The causes and consequences of problems are analyzed according to “measuring is knowing”.

- Goal oriented data is gathered and interpreted accordingly.

- Measurements are based on figures; verify everything with data.



E. Process oriented

- Internal customers are also satisfied.

- The process is more important than the results; address the means of work accomplishment and not the outcomes.

- The effectiveness of process is measured. - The output is standardized.

- The processes are documented in schemes and standard working procedures.

- Suppliers are regarded as partners and long term relationships are established.

- The TQM culture is expanded to suppliers.


F. Focus on continuous improvement.

- Employees improve themselves and their work and help others improve themselves and their organization. - Problems are regarded as a means for improvement and

a chance to improve processes.

- Emphasis on problem prevention instead of correction. - Improvements are based on cross-functional, structured,

and holistic approach, and are continuously documented.



- Multidisciplinary improvement teams

are established.

- There is a working climate in which

continuous improvement is a way of


- Improvement of whole and not just

the parts.


Deming’s and Crosby's 14 points for quality improvement

S.No. Demimg Crosby

1. Create constancy of purpose

towards improvement of product and service .

Establish management commitment

2. Adopt the new philosophy Form interdepartmental quality improvement teams.

3, Cease dependence on inspection Establish quality measurement. 4. End awarding business on the basis

of price tag Evaluate the cost of quality. 5. Improve constantly the system of

production and service. Establish quality awareness. 6. Institute training on the job. Instigate corrective action.



S.No. Deming Crosby 8. Drive out fear, so that everyone

may work effectively for the company.

Supervise employee training.

9. Break down barriers between

departments. Hold a zero defects day to let all employees realize that there has been a change. 10. Eliminate slogans and exhortations. Encourage individuals to establish

improvement goals for themselves and their groups.

11. Eliminate quotas or work standards. Error cause removal.

12. Give people pride in their job. Recognize and appreciate those who participate.

13. Institute education and a

self-improvement programme. Establish quality councils to communicate on a regular basis. 14. Put everyone to work to accomplish


• Total quality management is a common method to improve the whole organization stepwise, structured and systematically according to hard work, discipline, intensive training, and consistent implementation of techniques and resources.

• The quality principles form the foundation of TQM and are expressed in the four pillars of the TQM-house, namely

1.Problem solving Discipline 2.Interpersonal skills




Employee involvement, Structured, Stepwise, Discipline, Consistency.

Problem solving discipline


Skills. Teamwork Qualityimprovement process


• The success of TQM improves proportionately in conjunction with the percentage of employees within the organization who master this quality attitude, mentality, and skills,

• TQM covers all parts of the organization.

• For an organization to be truly effective, every single part of it, each department, each activity, each person and each level must work properly together, because every person and every activity affects and in turn is affected by others.



What is Quality?

• Degree to which a set of inherent characteristics fulfills requirements.

• Many of us tend to equate quality with lluxury and expense.

• If asked to rank, for quality - A Rolls Royce

- A Formula One racing car or - A compact family saloon

• Most people would choose the Rolls Royce as possessing the highest quality of the three.


• To use the definition of quality given earlier and to arrive at a ranking decision we need to examine another definition of quality “Grade”.

• Grade is defined as “category or rank given to different quality requirements for objects having the same functional use”.

• For example, classes of airline ticket or categories of hotels.

• When planning the quality requirement for an object, the grade for quality requirement must be known.



• The examples of Rolls Royce, Formula One racing car and a compact family car have very different functional uses and it becomes necessary to compare each one of them with vehicles having the same functional use.

• This promotes an alternative definition of Quality as

“Fitness for Purpose”.

• The problems this raises are ‘Who is to judge the fitness for purpose”?

- Should it be the customer?

- Should it be the manufacturer or provider of service? - Should it be an independent auditor?


Working effectively to achieve quality

• A common agreement is required on what quality means.

• It does not mean that all products need to be “gold plated’.

• It does not mean when buying a family saloon car that all luxuries of a Rolls Royce need to be built into achieve quality.

• The basic quality objective is to provide products and services that meets the needs of the customers.


28 • Individuals, based on their experience with the

products, form an opinion about quality.

• From varying ideas and suggestions for defining quality one idea becomes clear in all cases-the need for customer satisfaction.

• The multitude of suggestions make it appear that quality is a moving target and is difficult to achieve.


Quality is “Conformance to


• Conformity is ‘Fulfillment of a requirement”

• The Rolls Royce that meets all its specified requirements is a quality product.

• The family saloon that meets all its specified requirements is equally a quality product.

• Dr. Deming defines quality as the need to “provide customers with what they need, when they need it and at a higher perceived value and



Prevention rather than detection to

achieve quality

• Traditional methods include inspection, tests, audits to detect errors and eliminating them by scrapping or reworking products to conform to specification.

• This system of appraisal is commonly categorized as “Quality Control”.

• Inspection is the king.

• During late 1950s and early 1960s the principle of achieving quality by inspecting-out reject products was challenged.


• It was realized that quality is inherent within the product and cannot be introduced once the product is made.

• The philosophy of “prevention rather than detection” provides the opportunity for eliminating the potential for error.

• It involves identifying opportunities for error and taking actions to eliminate those opportunities before a problem arises.

• It results in the contemporary quality expression of “Quality Assurance- Right First Time”



Prerequisites of TQM and

Possible Actions

1. Know your customers, both external and internal:

- Who they are, their current needs, and their future requirements.

- Respond to their changing needs. - Do not forget the users.

1.1 Possible Actions - Customer surveys - Functional analysis - Quality cost analysis


2. Know your competitors 2.1 Possible Actions

- Customer surveys - Competitor analysis - Bench marking

3. Know the cost of non-conformance (CONC) 3.1 Possible Actions

- Quality cost analysis - Functional analysis

4. Measure performance against key customer driven parameters 4.1 Possible Actions

- Customer surveys - Competitor analysis - Bench marking


34 5. Make sure that each employee understands and

commits themselves to the quality objectives of the business.

5.1 Possible Actions - Functional analysis

- Education and training - Communication

6. Management commitment to the continual improvement of quality within the business.


6.1 Possible Actions - Quality cost analysis - Functional analysis

- Education and training - Communication.

7. Define the purpose of each department and activity in terms of satisfying external and internal customer


7.1 Possible Actions - Functional analysis


8. Enable the employees to fulfill their commitment to quality by influencing the programme of continuous improvement.

8.1 Possible Actions

- Education and training - Communication

- Corrective action task force, corrective actions group.

- Error cause removal schemes. - Quality circles

- Problem solving


- Statistical process control - Recognition of performance - Suggestion programmes

- Self inspection programmes.

9. Wherever possible replace the inspection and correction techniques of quality control with effective preventive actions.

9.1 Possible Actions - Quality cost analysis - Functional analysis


- Quality Management Systems - Error Cause removal schemes - Quality Circles

- Problem solving

- Suggestion programmes.

10.Never accept a non-conforming output in the form of a product for external or internal


10.1 Possible Actions - Quality Cost Analysis


- Functional Analysis

- Education and Training - Communication.

11. Plan effectively before undertaking any actions. 11.1 Possible Actions

- Quality Improvement Team

→ Apparently, there is no end to improvement.

• The recognition of the necessity to continuously revise the quality thinking is essential to the ultimate success of business venture.


5 S of Housekeeping

• Housekeeping is given a lot of importance in the total quality management system.

• It reduces the wastage of time and improves the efficiency and effectiveness of work.

• Improper housekeeping may lead to accidents, dull working environment and other work related problems.


1. Seiri- Orderliness

• The orderliness of manufacturing aids, proper arrangement of raw materials near the machines and keeping the files and drawings in order to make working fast, effective and efficient without wastage of the effort or time and material.

2. Seiso- Clarity

• The clarity of work process, flow process charts, arrangement of raw materials, finished goods and intermediary services make the work place more efficient and effective.


3. Seiton-Tidiness

• Tidiness ensures adequate space for machines and movement of manpower is made easy.

• Tidiness avoids mixing of different materials and it makes product identification easy.

• The chances of rejection and rework gets minimized.

4. Seiketsu

• The cleanliness of the shop floor and the office are mandatory for good working environment, good product quality and elimination of accidents.


This also helps an organization to put up a decent appearance of the organization before the visitors.

5. Shitsuke-Discipline

• Recommends discipline in all the four housekeeping practices together to enhance the effectiveness of housekeeping.

• It ultimately leads to the self discipline of the organization.



Total Quality Management Pioneers

1.Walter Shewart

• Founder of P-D-C-A Cycle

• Originator of statistical process control at AT&T Bell Labs in 1930.

2. W.Edward Deming

• Led quality revolution in Japan during the post-world war II period.

• Quality is a key competitive advantage.

• Deming quality award by Japan is the most prestigious quality award.


• Deming’s fourteen points for excellence. • Deming’s seven diseases.

3. Joseph M.Juran

• Led quality revolution in Japan during the post-world War II period.

• He defined quality as fitness for use by customer.

• Juran’s triology of quality, quality control, and quality improvement.

• Started Juran’s Institute in USA. • Introduced cost of poor quality.


46 4. Philip B. Crosby

• Started Crosby quality college.

• Created the concept of ‘zero defect’.

• Defined quality as conformance to requirement. • Crosby’s 14 steps of quality improvement.

5. A.V. Feigenbaum

• Originator of QM concept

• His theory of three steps to quality

• Quality leadership, modern quality technology and organizational commitment.


6. Taiichi Ohno

• Formulated the flexible manufacturing systems (FMS)

• Father of the just-in-time and kanban manufacturing.

• Father of TPS or Toyota Production System. 7. Sheigo Shingo

• Originator of ‘Single minute exchange of dies” • Introducing the concept of modular



8. Kaoru Ishikawa

• Originator of fish bone or the cause and effect diagramme.

• Originator of Company Wide Quality Control (CWQC). • Responsible for initial deployment of quality circles.

• Remove the root cause and not the systems. 9. Masaaki Imai

• Popularized the Kaizen concept of continuous improvement.

10. E.Goldratt


Deming’s 14 points to reach World Class Performance Standards

1. Achieve constancy of purpose

• Top management must define the organization’s vision, mission and objective with the constancy of purpose .

• The goal integration between the organization and individuals working there is extremely important for individuals to give their best for the achievement of the organizational objectives.


50 2. Learn a new philosophy

• Challenge the status-quo.

• Today’s management is learning, unlearning and relearning that is relevant to the organization.

• The speed and frequency with which the organization and its employees learn new philosophy decide its growth rate and market leadership.

3. Do not depend on mass inspection (Use

statistical sampling technique).

• Emphasizes heavy deployment of statistical techniques in the area of inspection.


• Deming was of the opinion that the behaviour of the whole group is going to be more or less the same as that of the sample lot taken for the inspection.

• Therefore, why unnecessarily waste precious resources of manpower and time for 100% inspection.

4. Reduce the number of vendors for better control and


• Vendors need to be treated as part of the organization.

• There needs to be direct involvement of the organizations in the statistical process control of the vendors.

• This will lead to improve vendors’ process capability and there will be no need to do 100% inspection.


52 • If the vendors are changed frequently for

cheaper price, quality of supplies would never stabilize.

• Hence, number of vendors per component should be either one or two to have a better control and consistency in the supplies.

5. Recognize two sources of faults:

(a)management and production systems (b) production workers.

• There are two types of errors or faults.

• One is due to random causes and other is due to assignable causes.

• The random causes are due to faulty process design or inadequate machine capability.


• The management alone can solve such problems. • The assignable errors are due to workers and

occur due to faulty workmanship.

• This can be eliminated by providing training to the workers and motivating them properly.

6. Improve on the job training

• Deming always described on-the-job training as the best method of training where the absorption of knowledge imparted during training is the maximum.

• Identify the training needs and the skill level required for each operator and employees.



7. Improve supervision

• Improve the supervision at the process level so that not only errors or mistakes are minimized, but also on-the-job training to the operators is strengthened.

• This will lead to continuous improvement, better productivity and enhanced quality of products, process and services.

8. Drive out fear

• Organization should be proactive and there should be employee involvement at all levels.

• Fear should not be the driving force to achieve the end results.


9. Improve communication

• The majority of the labour problems are due to lack of communication between the workers and the management.

• Communication should be immaculate in terms of training, learning of new technology, setting of new objectives etc.

10. Eliminate slogans and exhortations.

• This is quite similar to driving out fear and hence gets emphasized.

• Ensure employees are not exploited.

11. Consider work standards carefully and eliminate quotas • Examine each standard from functional point of view.


56 • Do not overdesign or keep tolerances too rigid . • If it is not required from customer’s point of

view and not adding any value, why unnecessary incur additional expenditure.

12. Teach statistical methods

• Implement statistical process control system in manufacturing leading to establishment of process capability

• This would lead to zero defects in products and services.


13. Encourage education and a self-improvement programme.

• A product innovation and development helps in increasing the market share.

• Innovations in process enhances productivity and quality and reduces the cost of production. • Organizations should have systems like

suggestion scheme, quality improvement teams to encourage new skills and their implementation.


14. Ensure total employee involvement.

• Put everyone to work to accomplish it. • Involvement should be voluntary.

• This would enable organization to achieve its objectives in minimum amount of time and cost.


Deming’s Seven Deadly Diseases

1. Lack of consistency of purpose to plan product and services that have a sufficient market to keep the company in business and provide jobs.

2. Emphasis on short-term profits; short term thinking that is driven by a fear of unfriendly takeover attempts and pressure from bankers and shareholders to produce dividends.

3. Performance appraisals, merit rating, and annual appraisal without providing resources to accomplish objectives.



4. Job hoping by managers.

5. Using only visible data and information in decision making with little or no consideration given to what is not known or cannot be known. 6. Excessive medical costs.

7. Excessive cost of liability driven up by lawyers that work on contingency fees.


What are Quality Costs?

• A particularly powerful technique in improving quality. • Quality costs are incurred in two ways

(a)The costs incurred in the design, implementation, operation and maintenance of quality management systems, and

(b)The costs incurred through failure of product manufacture or services.

• Quality management systems may range from simple inspection to systems which include consideration of all the management actions affecting the quality of the product or service.



• Production system failures can result in: (1)Production delays


(3)Rectification work (4)Late deliveries

(5)Defective products going undetected, and even (6)Obsolete stocks

• The outcome of these failures leads in turn to: (1)Warranty and product liability charges.

(2)Complaint administration and investigation (3)Late delivery penalty clause payments

(4)Product recall (5)Loss of goodwill


• Quality costs can also arise from varieties of activities which may not be connected with the quality of product or service; such as

- Sales and marketing

- Design and development - Purchasing

- Production (including planning & control) - Handling and storage



• The control of these activities may lie within or outside an organization.

• The outside influences will come from suppliers, sub-contractors, stockists, agents, dealers or consumers.

• The quality costs can be summarized as; (1)Cost of appraisal

(2)Cost of prevention (3)Cost of failure

• Studies have indicated quality costs range from 5% to 25% of company’s turnover depending upon the nature of industry, products or services and the level of quality management employed.


• Studies have also indicated that 95% of the costs stem from appraisal and failure.

• Neither of these costs add value to the product or service and therefore failure costs should be avoidable.

• If the causes of failure can be eliminated it will lead to a reduction in the need for appraisal with the consequent cost reduction.

• Studies have indicated that implementation of effective quality management systems can reduce quality costs to one third of their previous



Categories of Quality Costs

Quality Related Costs

Conformance Costs Non-conformance Costs Appraisal Costs Prevention Costs Internal failure Costs External failure Costs


• Appraisal Costs

- The cost of assessing the quality achieved.

- These costs include the costs of inspection and testing carried out during and on completion of manufacture.

• Prevention Costs

- The cost of any action taken to investigate, prevent or reduce defects and failures.

- These costs include the cost of planning, setting-up and maintaining the quality management system.



• Failure Costs-Internal

- The costs arising within the organization of the failure to achieve the quality specified.

- These costs include the cost of scrap, rework and re-inspection and also the consequential losses that result such as interruption in schedules, idle capacity.

• Failure Costs- External

- The costs arising outside the organization because of failure to achieve the quality specified.


- These include the costs of claims against warranty, replacement, consequential losses, loss of goodwill and penalty clause payouts for late delivery.

→When a quality costing is carried out, it is necessary to consider appraisal, prevention and failure costs in terms of

- Salaries and wage

- Consumable materials

- Capital equipment depreciation

- Various other costs directly related to department within the organization.

→ The loss of goodwill resulting from poor quality is difficult to analyze and could be very easily be the



Crosby's Theory on Quality

Management-6 Cs

• While Juran propagated that ‘higher quality costs less’, Philip Crosby tried to popularize the concept that ‘quality is free’.

• Crosby is famous for his 6 Cs. (1)Comprehension

- Ability to understand and absorb the quality related activities, its sustenance and improvements.


(2) Commitments

- Top management, employees, suppliers and the customers to get committed to work together towards quality management systems.

(3) Competence

- For improving the effectiveness and efficiency of the quality management system and then sustaining the improvement on a long-term basis.

(4) Corrections

- Fool proofing the quality management systems by rectifying the mistakes and deviations and putting the quality management system back on the track for world-class performance.


72 (5) Communications

- In order to ensure support to the quality management system from employees, suppliers and customers alike, communication in the organization should be clear without ambiguity. (6) Continuance

- The organization’s good performance and its continuous improvement is the essence of a world-class organization and its successful operation.


Four Absolute Requirements for

attainment of quality-Crosby

1. The definition of quality is conformance to requirements

- The objective of the quality improvement programme is to get everyone to do it right the first time.

- To achieve this, an organization must get its employees to understand the requirements clearly.



- The management has to perform three tasks

to accomplish this:





requirements that employees are to meet.

(b)Supply the resources needed by the

employees to meet these requirements.

(c)Encourage and help the employees to meet

these requirements.

(2) The system of quality is prevention

- Inspection, testing and checking after the

job is over is an expensive and unreliable

way of getting the quality.


- What is required is ‘prevention’.

- The concept of prevention is based on

understanding the process that needs

preventive action.

- The preventive activities are to look at the

processes and identify opportunities for the


- The errors can be controlled by eliminating

the cause of the problem.



3. The performance of the standard is zero


- Organizations with millions of individual

actions cannot afford to have a percent or

two to go astray.

- Less than complete compliance with

required level of performance could cause

big trouble in the organization.

- Companies try all sort of ways to help

people not to meet the requirements by

declaring things like ‘Accepted Quality



- The concept has to be ‘zero defect’ that is

absolute conformance to the requirement.

- There cannot be a grade or percentage of


- The employees should be aware of what

they are supposed to do and do exactly


- The employees have to do it right first time

to make the organization hassle free.



4. The measurement of quality is the price of non-conformance

- The price of conformance consists of costs like all prevention efforts, training and education on quality.

- Normally it should not be more than 2% of the sales.

- The price of non-conformance consists of faulty handling of a customer’s enquiry to loss of orders, rejection, delayed delivery, rework, salvaging, etc.


- It can be as high as 20% and it can eat up

the organization’s profits.

- The price of non-conformance is

everything that the organization would not

have done if it was done right the first


→Philip B.Crosby’s theory on ‘zero defect’ and ‘do it right first time’ has been accepted worldwide even though he practiced management mainly in the USA.



Muri, Mura and Muda- Three Magic Wands

of Japanese Management System.

• The three Japanese mantras of ‘muri’ ‘mura’

and ‘muda’ known as ‘3M practice’ is an

integral part Japanese manufacturing system.

• The 3M practice brought down the cost of

production to bare minimum without

affecting the quality or user friendliness of

the product.


• The effect of elimination of muda or wastage is immediately experienced and the results are visible.

• The impact of mura and muri are subtle and not visible but equally significant in attaining the end objective of customer satisfaction and cost reduction.


- The word ‘muri’ means ‘unreasonable’ or ‘irrational’ approach to any field of operation.



(a) Things or activities that are extremely

difficult to do and at the moment

beyond the reach should be identified

and eliminated from our activities as

there is no meaning behind pursuing

these activities annd currently beyond

the individual’s or organization's


(b) There is futility in pursuing and doing

activities that do not make much sense

or it is difficult to find reasons for.



) Eliminate the activities that are done because you are told to do so without understanding the reason for doing the same or its underlying benefits from performing such activities.

(d) Eliminate irrational actions or operations that cause undue or excessive fatigue due to a lot of physical effort, frequent stress to body movement, mental fatigue due to unwarranted work place stress, remembering a lot of things, worrying about defects or breakdowns, struggling to read illegible words and symbols etc.


Application of muri- A case study

• A case of Japanese automobile and machine tool industry.

• American and European car and machine tool industry designed a car or two-wheeler or a machine tool to last for next twenty to thirty years and to give consistent performance.

• Therefore, they multiplied the calculated dimensions by the factor of safety of two.

• This led to increasing dimensions of the


• Therefore, the cost of raw materials was double, the weight of the automobile or machine tool was heavier and less flexible and difficult to handle.

• As per the thumb rule, half of the cost of a automobile or a machine tool consists of raw materials and if it doubles the price of the final product also nearly doubles as all other costs are directly or indirectly related to the processing of raw material.


• Their view point was

(a)Is the customer going to use the same ‘car’ or the ‘two-wheeler’ for the next twenty or thirty years?

(b)Is the customer going to use the same ‘machine tool’ or the ‘manufacturing technology’ for the next twenty or thirty years? (c)Is the product development and upgradation of

technology going to be negligible in next two to three decades?


• Why design and manufacture a car or a

two-wheeler for twenty to thirty years

when you know that you are going to use

the same maximum for a period of four to

five years?

• Why manufacture a machine tool to last for

thirty to forty years when you know that

the technology for manufacturing is going

to change every five years.


• Thus, Japanese designed a car or two-wheeler for five years because that is normally the life span for which the product is effectively used.

• Therefore, Japanese used a ‘Factor of Safety’ of 1.25 instead of two.

• Their raw material cost was about 62.5% of the western design.

• The end product was identical in terms of product features and user friendliness.

• The price of the end product was proportionately lower by almost 30% to 35%.


• The automobiles were also lighter in

weight due to lower percentage of the raw

material used.

• This led to the reduction of dead weight to

be carried by the vehicle thereby

increasing the pick-up of the vehicle as

well as reduction in fuel consumption.

• The end result of practicing ‘muri’ was a

better performing product which is more

user friendly and priced much lower than



• The Japanese word ‘Mura’ means irregular, uneven or inconsistent.

• Either due to lack of interest or over enthusiasm we tend to deviate from the laid out standards leading to inconsistent actions.

• Such inconsistencies can lead to irrationality and waste.

• ‘Bottleneck Theory’ or ‘Theory of Constraints’ originate from the principle of mura.


• The bottleneck theory states that the neck

of a bottle or the least diameter of a bottle

decides the rate of flow out of the bottle.

• When applied to industry, this theory states

that the department in manufacturing chain

with least capacity decides the plant


• The corrective action is strengthening this

weak department by increasing its capacity

by minimum investment.


• The result will be quantum jump in overall

performance of organization as the extra

capacity is already lying unutilized in other


• Goldratt’s “theory of constraints’ also

tends to be developed around the same

principle of ‘mura’.

• The theory states ‘the weakest link in a

chain decides the weight that can be lifted

by the chain.’


• The objective is to identify this weakest link and keep on strengthening it to make organization stronger and stronger and make it grow steadily. • Kaizen also uses ‘mura’ as a powerful

improvement tool.

• He prefers to use discrepancy instead of inconsistency.

• Discrepancy can be identified in areas like men, method, time, facilities, manufacturing aids, materials, production volume, inventory, place etc.


• Once this discrepancy is identified, it is

analyzed, and solution is found out to

eliminate the discrepancy leading to

culture of continuous improvement.

• Mura calls for minimum deviation

between the best and the worst product or


• Minimizing the range of deviation and

minimizing the standard deviation in the

statistical process control.



• ‘Muda’ means waste.

• Waste is any activity that does not add value.

• Juran has called all the activities that do not add value the Cost of Poor Quality (COPQ).

• Taichi Ohno of Toyota Motor Company has identified seven mudas or seven wastes which have been further modified to nine mudas.

• Elimination of these wastes reduces the cost of production, enhances productivity, reduces cycle


• These wastes are

1.Waste from overproduction 2.Wastes due to waiting time

3.Waste due to unwarranted transportation 4.Waste due to excess inventories

5.Processing waste or useless operation in processing waste.

6.Waste of motion due to unnecessary human movement.

7.Waste from product defects or defective parts.


1. Waste from overproduction

- Normally, the tendency of an organization is always to overproduce to ensure no shortage of material in the market under anny circumstance. - Or to fill up the idle plant capacity during lean


- In today’s dynamic environments, products and services have shorter life cycle.

- If a product is in inventory for a long time, it may become obsolete in the market.


- It also may occupy plant capacity for products that are already there in the stock whereas some of the products for which customers are waiting cannot be produced due to this blockage of capacity.

- It leads to piling up of excess inventory, occupying more storage space, excessive material handling cost, interest cost on unsold stock etc.


2. Waste due to waiting time

- Any time wasted in waiting for the parts to arrive due to improper line balancing, or

- Waiting for job instructions due to improper planning. - These waiting time has to be identified and eliminated

from the system.

3. Waste due to unwarranted transportation

- Unwarranted transportation happens due to unplanned and improper plant layout leading to parts/materials being moved multiple times.


- If materials are not properly placed, they are difficult to find leading to further wastages.

4. Waste from excess inventories

- Normally, buffer inventories are kept to take care of inefficiencies like faulty sales forecasting, late deliveries from suppliers, delayed production etc.

- In the just-In-Time production system the inventory is progressively reduced to increase the operational efficiency.

- Excess inventory leads to increase in ICC .


- ICC consists of interest cost on capital invested in extra inventory, storage space, extra material and product handling, insurance, product pilferage and obsolescence.

5. Processing waste or useless operation in processing waste

- Processing waste occurs due to inefficient process design and improper technology.

- This can be improved by proper work study, method study, work measurement, incorporating proper technology and training to operators.


6. Waste of motion due to human movements.

- Unnecessary human motions can be eliminated by studying ergonomics and motion study.

- Incorporating simple human motions, proper arrangement of work place, proper location of operating switches, simultaneous and opposite movement of both hands leads to reduction of fatigue i.e. ‘Motion Muda’

7. Waste from product defects or defective parts

- The waste from product defects or defective part is major muda which not only affects the cost of production but also leads to the loss of sales due to customer dissatisfaction.


- This involves major cost of rejection, rework and replacement.

- The cost of an external failure is ten times the cost of detecting the same failure internally which is again ten times the cost of detecting the failure at the point of origin. - Hence the emphasis should be in the process control or implementation of the six-sigma practice which makes it almost impossible to produce a defective part.

8. Waste in the development of products

- Product features that do not add value to the product or service from the customer’s point of view or his needs and expectations are considered as waste.


9. Waste of opportunities

- A new organization may be performing better in terms of market share, purchasing prices, quality of goods produced, new technology, cheaper and better substitute raw material.

- Any loss due to not utilizing this potential area of gain could be classified as an area of muda.

→ The elimination of muri, mura and muda can be done as under:

(a) Benchmarking

(b) Strategic planning

(c) Business Process reengineering


Quality Circles

• Quality Circles were the logical consequence of the various waste elimination programmes that were run in many Japanese corporations in early fifties.

• It provided a platform for the workers to get together and use techniques for their quest for continuous self-development and organizational improvement.

• In 1980, the first Quality Circle was launched in Hyderabad plant of Bharat Heavy Electricals



Definition and Meaning

• Quality Circle is a small group of employees in the same work area or doing a similar type of work who voluntarily meet regularly for about an hour every week to identify, analyze and resolve work related problems, leading to improvement in their total performance ad enrichment of their work life.

• This definition is quite comprehensive and most commonly accepted.


→ Why small group of employees?

- Experience indicates that the optimum number of a Q.C. is about eight to ten.

- If a circle is formed with less than five members, one can imagine the strength of the group when absenteeism is high.

- Interaction and participation becomes more pronounced when group members are more than say, six.



→ Why in the same work area or doing similar type of work?

- This ensures Q.C. to be a homogeneous and cohesive group

- The discussion that takes place remains interesting to everyone only if members are from the same background.

- It also helps the members to understand the intricacies of the problem.

- Also the application of QC tools that are recommended require the expertise in the field.


→ Why is participation voluntary?

- ‘Voluntary’ in the Japanese context has a different interpretation as compared to what is normally understood in the Indian context.

- To the Japanese , the very word ‘voluntary’ implies 100% participation.

- Hence, when a company in Japan decides to implement Quality Circle, every body has to enroll as a member.

- Japanese have refrained from using from using the word ‘compulsory’ as it indicates not just 100% participation but achievement of targets as well.



• Quality circle requires some amount of creativity that is not under control, therefore, the word voluntary is used to indicate that achieving targets is not mandatory, but participation is compulsory.

• In India the term ‘voluntary’ has been used to circumvent the possible opposition from the trade unions.

→ Why to meet regularly for an hour every week?

• Meeting regularly is absolutely essential for the success of Q.C.


• If the meetings are kept at longer intervals

then cancellation of one or two meetings will

further lengthen the interval leading to

complete stoppage of work.

→ Why to analyze and resolve work related


• As employees know more about their own

work area than any body else, they are in a

better position to solve problems occurring




Structure of Quality Circle

Steering Committee /Departmental Committee Top Management TM Steering Committee Facilitator Leader/Deputy Leader Member Non Member Coordinating centre


Role of Each Element

1. Non-Members

- Initially, all the employees in a particular work area may not volunteer in joining QC activity.

- Some others may not be interested in activity but prefer not to get directly into it.

- QC members must understand that solutions they find cannot be implemented without the cooperation of these non-members.

- Members must encourage non-members to participate in activities so that they change their attitudes and form circle on their own.



2. Members

- Members must be restricted to grass root level persons. - If membership is kept open only to officers and

executive, the very purpose of QC gets defeated.

- Members actively participate in selecting problems of their concern, analyzing it, finding solution to it and finally making presentation to the management.


3. Leader/Dy. Leader

- In Japan, first line supervisors are nominated as leaders.

- However, in India, it is advisable to make members choose their own leader.

- Earlier there used to be only one person as leader. - But considering heavy absenteeism that prevails in

our country, there can be one deputy leader who will take charge in absence of leader.



• The leader or the deputy leader’s endeavour is - To maintain cohesiveness of the team.

- To plan agenda for meetings.

- To ensure participation from every member by assigning them work.

- To encourage consensus decision making process. 4. Facilitator

- Facilitator is the senior officer of the department where QC is working and is nominated by management.


• The facilitator

- Can facilitate more than one QC.

- Is responsible for success of QC’s

operating in his area.

- Ensures necessary facilities are available to

the team for operation.

- Joins Steering Committee meetings and

gives results of activities of QC.



5. Steering Committee

- The committee comprises of heads of major functions as members and chief executive as the chairman.

- The committee makes top management’s support visible.

• Steering committee

- Meets regularly once in two months.

- Takes overview of QC activity in entire organization.

- Gives policy guidelines fr the propagation of movement


6. Coordinating Agency

- The job of coordinating agency is similar to facilitator but on a large scale.

- It coordinates QC activities throughout the organization.

- Steering committee decides the composition of coordinating agency.

• Coordinating agency

- Organizes a training programme for members when QC is formed.



- Prepares budget for QC activity.

- Arranges guest speaker or library facility for members. 7. Top Management

- Top Management does not fall within the formal structure of QC.

- Its main job is to

• Convey its commitment to all employees

• Extend necessary support by attending conventions and sanctioning funds.

• Form quality council and establish a conducive atmosphere.


Reasons of failure of the Quality


• Quite contradicting results as far as Quality Circle movement is concerned have been observed.

• At one extreme are the highly successful cases of Japan whereas on the other extreme there are some total failures in other parts of the world including India.

• Most of the times it is the corporate culture that governs the success or failure of Quality Circle.



Western Management Japanese Management

QC is made formal staff

organization QC is an informal group of workers. Managers appoint facilitator to get

rid of his job. Manager himself serves as the facilitator, guide and consultant. Meeting is held strictly during

working hours. Meeting is held anytime, during working hours, or lunchtime, or after the working hours.

Manager proposes the project. QC members select their own projects.

Monetary rewards for suggestion


Important Tools and Techniques

1. Brainstorming 2. Affinity diagramme 3. Benchmarking 4. Fishbone diagramme 5. Check sheet 6. Flow chart 7. Line graph 8. Run chart



9. Histogram

10. Pareto-diagramme

11. Failure Mode and Effect Analysis 12. Scatter diagramme

13. Control charts

14. Quality Function Deployment 15. Tree diagramme.

→ These tools and techniques are essential for the clear establishment of quality improvements.



• Brainstorming encompasses the systematic and structured generation of possible ideas, on the basis of the creative thinking of a group of people.

• The rules of the game are: (1)Criticism is prohibited

- The participants of a brainstorming session should try not to think of usefulness, importance, feasibility and relevance, and may certainly not comment on these.



• Therefore, review of ideas should be


• Strictly adhering to this rule is essential

to prevent team members from feeling


(2) Generate ideas freely

- Each team member must express an idea.

- Each idea that surfaces has to be shared


• In brainstorming session, an environment has to be created that gives team members a feeling of confidence and freedom.

(3) Build upon ideas of others

• The team members have to generate ideas by building on ideas of others.

• One should look for combinations and improvements of ideas.

(4) Try to generate as many ideas as possible • Quantity is more important than quality.



→ Execution of brainstorming process

• Often the idea generation process lasts up to forty-five minutes.

• Group and cluster similar ideas.

• Establish selection criteria e.g. feasibility, costs and relevance.

• Appoint a group for each cluster of ideas to evaluate the ideas after ending the brainstorming session.

• Groups should organize separate follow-up meetings to eliminate unusable ideas themselves on the basis of selection criteria.


Affinity Diagramme

• Affinity diagramme is a tool to group a large amount of ideas generated by means of brainstorming.

• It is used to group a large amount of ideas based on existing relationships between the various ideas, and also

• To stimulate creativity and teamwork during the brainstorming process.


130 →An Example: To improve the motivation and

labour productivity of the employees, the management of a company organized a brainstorming session using the affinity diagramme.

(A) An improvement team was put together which formulated the following problem;

“How can a work climate be created within the organization in which there is active participation of everyone, open communication and a high labour productivity?”


(B) On the basis of the already mentioned brainstorming rules, the team members generated some ideas, whereby each idea was written on a board, and placed in random on th board as indicated.

How can a work climate be created within the organization in which there is active participation of everyone, open



Introduce judging &

functioning tasks Introduce an effective reward system Formulate clear function descriptions Introduce job rotation Introduce work consultation Handle sanctions Purchase air conditioners Description of administrative processes Intensive internal communication

Introduce a career plan

Make personnel statistics

Introduce flexible hours

Job and function oriented training

Training in effective meeting

Organize excursions and sports activities.

Develop an incentive plan

Introduce a time clock

Improve the ergonomic condition

Create job satisfaction

Build a common canteen


(C) Next, all participants were called to the front and they clustered the notes without discussions or comments.

- They also moved the incorrectly placed notes.

- These clustered comments were re-written on the board.

How can a work climate be created within the organization in which there is active participation of everyone, open communication and a high labour productivity?”



Introduce judging and functioning talks

Introduce job-rotation Introduce work consultation Introduce an effective reward system Make personnel statistics Develop an incentive plan Introduce a career plan

Introduce a time clock

Handle sanctions

Improve the ergonomic condition

Introduce flexible hours

Create job satisfaction

Job and function oriented training Purchase air conditioners Intensive internal communication Formulate clear function description Training in effective meeting Organize excursions and sports activities Build a common canteen

Description of the


D. The previous step resulted in the following clusters of ideas:

• Judging/remuneration. • Working conditions • Communication

- A header was placed above each cluster of notes.

- For each cluster a group was then put together which arranged the ideas according to their priority.

- The ideas with the highest priority worked out more accurately by the groups concerned and reported to the management.

- Further, interim meetings were organized to establish synergy between the three groups.



Judging/remuneration Working conditions Communication Introduce judging and

functioning talks Introduce an effective reward system Make personnel statistics Develop an incentive plan

Introduce a career plan

Introduce a time-clock Handle sanctions Introduce job-rotation Improve ergonomic conditions Introduce flexible working hours

Create job satisfaction

Job and function oriented training Purchase air conditioners Introduce work consultation Intensive internal communication Formulate clear function description Training in effective meeting Organize excursion and sports activities.

Build a common canteen



• Benchmarking is the systematic and continuous process of determining what the best performances and underlying skills of leading organizations are in their strive for excellence.

• And based on above, stimulate the organization’s own strive for excellent performances at all organizational levels.



The Benchmark Process

1.What is to be benchmarked 2. Identify the benchmark partners 3. Gather data 4. Analyze the data 5. Determine the performance gap. 6. Formulate functional goals 7. Develop action plans 8. Implementation & Monitoring


When do you use Benchmarking?

• Benchmarking is mostly used to compare processes and performances against those of recognized leaders.

• Based on this, the performance gap between the organization and the best competitor is evaluated.

• Organizational processes usually used for benchmarking are: (a)Marketing,



(d)Technology development, (e)Product development, and (f)Logistics


Types of Benchmarking

1. Internal Benchmarking

- Internal benchmarking involves comparison of internal activities and processes within own company.

- Usually of interest to large organizations where it is determined as to how far other departments and divisions execute similar activities within their own organizations more efficiently and effectively.