TQM fundamentals for quality excellence

TOTAL QUALITY MANAGEMENT 12MBA42
DEPT OF MBA,SJBIT Page 1

Total Quality Management 12MBA42

TOTAL QUALITY MANAGEMENT
Sub Code: 12MBA42 IA Marks: 50
No. of Lecture Hrs/week: 04 Exam Hrs. 03 Hours
Total No. of Lecture Hrs. 56 Exam Marks: 100
Practical Component: 01 Hr/ Week

Module I (6 hours)
Introduction to TQM,Meaning of the terms quality, quality control and quality assurance,
importance of quality, quality dimensions of products and services, quality and competitive
advantage, cost of quality, TQM, Evolution of TQM, Basic principles of TQM, TQM VS
Traditional management, advantages of TQM

Module II (10 Hours)
Philosophical Framework to TQM Contribution of various gurus of TQM,Deming-Demings
chain reaction, Demings principles, deadly sins, PDCA cycle, Jurans Quality triology, Jurans
breakthrough sequence, Philips Crosby- Quality is free, Taguchis Quality loss function,
Ishikawas contributions and Quality Circles.

Module III (6 Hours)
Benchmarking Definition, reasons for benchmarking, types of benchmarking, process of
benchmarking what to benchmark, understanding current performance, planning, studying
others, using findings, Xerox model of Benchmarking, Advantages and pitfalls of benchmarking
Concept of Kaizen and its applications

Module IV (6 Hours)
Business Process Re-engineering (BPR) Introduction, Need for BPR, Implementing BPR, Steps
in BPR, Re-engineering vs. TQM, BPR Vs. Kaizen, Re-engineering the structure, change
management and BPR, BPR and IT, Advantages and Limitations, Indian examples of BPR

Module V (8 Hours)
Quality Management Systems(QMS) Introduction, meaning of QMS, ISO 9000, Benefits of ISO,
ISO 9000-2008 series, implementation of ISO 9000,Problems related to ISO 9000, QS 9000,
Need for QS 9000, QS 9000 series ENVIRONMENTAL MANAGEMENT SYSTEM (EMS),
ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000 & 14000, SEI-CMM level 5

Module VI (6 Hours)
Quality Awards : Introduction, Need for Quality Awards, Deming Prize and its features,
MBNQA and its features, European quality award and its features, Golden peacock award, TQM
models.

Module VII (8 Hours)
Quality Control tools: Introduction, 7 tools of quality control (Old & New), Poka-yoke, Quality
Function Deployment.



Module VIII (6 Hours)
Introduction to Six Sigma Historical developments, statistical framework for six sigma, DPU and
DPMO concepts, DMAIC methodology, Training for Six Sigma, Benefits of Six Sigma, Six
sigma and TQM.

Practical Component:
Students have to study any Indian organization which has won Deming prize and identify the
quality initiatives of that organization
Students are expected to study various quality awards given in India like CII Business excellence
award, Rajiv Gandhi national quality award and Tata groups Excellence Award and compare
with international awards
Students can identify any 2 products and 2 services and develop Quality attributes for the same.
Students can identify industry from any sector and conduct a benchmark study with respect to
best in the class.

RECOMMENDED TEXT BOOKS:
1. Management and Control of Quality, James R. Evans, 8/e 2012, Cengage Learning
2. Total Quality Management, Dale.H. Besterfield, 3rd Edition, Pearson Education
3. Total Quality Management Text and Cases, G. Nagalingappa&Manjunath VS, Excel books.
4. Total Quality Management, ShridharBhat, Himalaya Publication
REFERENCE BOOKS:
1. Total Quality Management by PoornimaM.Charantimath, Pearson Education.
2. Quality Control Handbook by JURAN, Mc.Graw Hill Publication



TABLE OF CONTENTS

MODULE NO CONTENT PAGE NO
1
Introduction to TQM 04 to 16
2
Philosophical Framework of TQM 17 to 36
3
Benchmarking 37 to 45
4
Business Process
Reengineering(BPR)
46 to 57
5
Quality Management
Systems(QMS)
58 to 74
6
Quality Awards 75 to 90
7
Quality Control 91 to 105
8
Six Sigma and other developments 106 to 113


MODULE I
Introduction to TQM,Meaning of the terms quality, quality control and quality assurance,
importance of quality, quality dimensions of products and services, quality and competitive
advantage, cost of quality, TQM, Evolution of TQM, Basic principles of TQM, TQM VS
Traditional management, advantages of TQM.

OBJECTIVE
To Understand and appreciate
Concepts and Practices of TQM
Meaning of the terms quality,
Quality control and
Quality assurance,
Importance of quality,
Quality dimensions of products and services,
Quality and competitive advantage,
Cost of quality,
TQM, Evolution of TQM,
Basic principles of TQM,
TQM VS Traditional man

INTRODUCTION TO TQM
Total quality management (TQM) refers to methods used to enhance quality and
productivity in organizations, particularly businesses. TQM is a comprehensive system
approach that works horizontally across an organization, involving all departments and
employees and extending backward and forward to include both suppliers and
clients/customers.
TQM is only one of many acronyms used to label management systems that focus on
quality. Other acronyms that have been used to describe similar quality management
philosophies and programs include CQI (continuous quality improvement), SQC
(statistical quality control),QFD (quality function deployment), QIDW (quality in
daily work), and TQC (total quality control). Despite the ambiguity of the popularized
term "TQM," that acronym is less important than the substance of the management


ideology that underlies it. TQM provides a framework for implementing effective quality
and productivity initiatives that can increase the profitability and competitiveness of
organizations.
Although TQM techniques were adopted prior to World War II by a number of
organizations, the creation of the total quality management philosophy is generally
attributed to Dr. W. Edwards Deming (1900-1993). In the late 1920s, while working as a
summer employee at Western Electric Company in Chicago, he found worker motivation
systems to be degrading and economically unproductive; incentives were tied directly to
quantity of output, and inefficient postproduction inspection systems were used to find
flawed goods.
Deming teamed up in the 1930s with Walter A. Shewhart (1891-1967), a Bell Telephone
Company statistician whose work convinced Deming that statistical control techniques
could be used to supplant traditional management methods. Using Shewhart's theories,
Deming devised a statistically controlled management process that provided managers
with a means of determining when to intervene in an industrial process and when to
leave it alone. Deming got a chance to put Shewhart's statistical quality-control
techniques, as well as his own management philosophies, to the test during World War
II. Government managers found that his techniques could easily be taught to engineers
and workers, and then quickly implemented in overburdened war production plants.
One of Deming's clients, the U.S. State Department, sent him to Japan in 1947 as part of
a national effort to revitalize the war-devastated Japanese economy. It was in Japan that
Deming found an enthusiastic reception for his management ideas. Deming introduced
his statistical process control, or statistical quality control, programs into Japan's
ailing manufacturing sector. Those techniques are credited with instilling a dedication
to quality and productivity in the Japanese industrial and service sectors that allowed
the country to become a dominant force in the global economy by the 1980s.
While Japan's industrial sector embarked on a quality initiative during the middle
1900s, most American companies continued to produce mass quantities of goods using
traditional management techniques. America prospered as war-ravaged European


countries looked to the United States for manufactured goods. In addition, a domestic
population boom resulted in surging U.S. markets. But by the 1970s some American
industries had come to be regarded as inferior to their Asian and European competitors.
As a result of increasing economic globalization during the 1980s, made possible in part
by advanced information technologies, the U.S. manufacturing sector fell prey to
more competitive producers, particularly in Japan.
In response to massive market share gains achieved by Japanese companies during the
late 1970s and 1980s, U.S. producers scrambled to adopt quality and productivity
techniques that might restore their competitiveness. Indeed, Deming's philosophies and
systems were finally recognized in the United States, and Deming himself became a
highly sought-after lecturer and author. The "Deming Management Method" became the
model for many American corporations eager to improve. And total quality
management, the phrase applied to quality initiatives proffered by Deming and other
management gurus, became a staple of American enterprise by the late 1980s. By the
early 1990s, the U.S. manufacturing sector had achieved marked gains in quality and
productivity. By the late 1990s several American industries had surpassed their
Japanese rivals in these areas.

MEANING OF THE TERMS QUALITY, QUALITY CONTROL AND QUALITY
ASSURANCE
CONCEPTS OF QUALITY
Q- Quest for excellence
U- Understanding customers needs
A- Action to achieve customers appreciation
L- Leadership-determination to be a leader
I- Involving all people
T- Team spirit to work for a common goal
Y- Yardstick to measure progress



Quality Definitions
The ability of a product or service to meet customer needs
The totality of features and characteristics of a product or service that bears on its ability to
satisfy stated or implied needs-American Society for Quality

Meeting or exceeding customer requirements now and in the future.
This means that the product/service is fit for customers use, Fitness for use is related to benefits
received by the customer and to ensure customer satisfaction.
Quality control
Quality control denotes all those activities which are directed to maintain and improve quality.
Quality control involves.
1. Setting of Quality targets
2. Appraisal of conformance (adhering to rules)
3. Taking any corrective action where any deviation is noticed
4. Planning for improvements in quality

Objectives of quality control

SQC (Statistical Quality control)
tems of the
manufactured product with the help of statistical knowledge.
assignable causes encountered in the production process.

Organising for quality control

Traditionally Quality control department has the role of a watchdog over production
department
employees
ch employee is responsible for quality
which is called as quality at source

Quality at source

ion b/n quality control department and production department


and product
rkers and managers to form a group called as Quality circle to analyze quality
problems and to solve quality problems.

Quality control strategy and policy
time which aims at continuous improvement of quality . To facilitate this Quality policy must
be formulated.

Quality assurance
quality
ntended to include of all activities performed to ensure that the product
performs to the customers expectations and many departments are involved in it.

Activities in Quality assurance

product
t

manuals
ndicates inadequate
quality

Quality assurance system
method of maintaining quality
as an assembly of elements such as organizational
structure, responsibilities, procedures, processes and resources for managing quality.


The quality assurance system must be documented in the form of a quality manual covering the
following areas:

The quality assurance system must be documented in the form of a quality manual covering the
following areas:
1. Quality planning
2. Quality advice and expertise
3. Training personnel
4. Purchase, process, service appraisal methodology
5. Customer complaints, warranty claims
6. Senior management
7. Marketing
8. Research and development
9. Product design
10. Production and operations
11. After sales/service
12. Stores/distribution/transport

Total quality control (TQC)
-wide-view of product quality to achieve competitive positions by
offering quality products to consumers covering from a shop floor to a board room is termed as
Total Quality control (TQC)
ality control is an effective system for integrating
quality development, quality maintenance and quality improvement efforts of the various groups
in an organization so as to enable marketing, engineering, production and service at the most
economic levels which allow for full customer satisfaction

Importance of quality

Producing superior quality products / service is vital to the continued growth success of a
company, therefore benefits of quality are given below.
1. It gives a positive company image
2. It improves competitive ability both nationally and internationally
3. It increases market share, which translates into improved profits


4. Overall it reduces costs which also results in profits
5. It reduces problems & avoids unnecessary costs
6. It creates an atmosphere for high employee morale, which improves productivity .

Quality Dimensions of products and services

Quality expected from a product (Tangible)
Eg: TV, Computers, Bikes
1. Performance: how well the product performs customers use eg: speed of a laser printer
2. Features: special characteristics that attracts a customer eg: power steering and central locking
system of an automobile
3. Reliability: frequency of malfunction, breakdown or repairs eg: cartridge of a xerox machine
4. Serviceability: speed , cost and convenience of repairs and maintenance eg: service of washing
machines
5. Durability: length of time of use before repairs/replacement eg: a car can be used for 5-10
years
6. Appearances: look, feel, taste , smell or sound of a product eg: look of a bike, smell of a
perfume, sound of a music system
7. Customer service: treatment received by customers before, during and after the product sale
eg: credit card
8. Safety: how well the product protects users during use eg: helmets

Quality concepts of Service
Quality expected from service sectors (Intangible)
Eg: Hotel, Hospitals, Banks

1. Reliability: consistency and dependability
2. Responsiveness: willingness to provide service
3. Competence: possession of skills and knowledge to perform
4. Access: approachability and ease of contact
5. Courtesy: politeness, respect, neatness and appearance
6. Communication: talking to customers in their language
7. Credibility: trust and belief
8. Security: freedom from danger, risk


9. Understanding the customer needs: learning customer requirement, providing individual
attention
10. Tangibles: physical evidence of service (facilities, tools and equipment) eg: a cinema theatre
with good seating arrangement
Quality and Competitive advantage.
1 Market route benefits
Continuous quality Improvement
Improved competitive position
Higher prices and increased market share
Increased revenue
Increased profits
2 Cost route benefits
Continuous quality Improvement
Improved defect-free output
Reduced costs of operations
Increased profits
Cost of quality

Cost of quality (COQ)/(COPQ) is the sum of cost incurred by an organization in preventing poor
quality. There are essentially 4 types of quality costs as below
These are certain costs which are associated with product and service quality. There are 4 major
categories of quality costs. They are

1. Prevention costs
2. Appraisal costs
3. Costs of internal failures
4. Costs of external failures

Prevention costs
Are associated with preventing defects before they happen. They include costs of

to increase quality of raw materials,


Appraisal costs

Internal failure costs

costs, replacement costs or new part costs

External failure costs

Total quality management
Total Quality covers

Earlier concept of quality related with a product is no more valid.
1. Quality is ultimately decided by all the processes which get included in the quality loop.
2. Total Quality covers every job , not just one involved in making of the product. Eg: secretaries
are expected not to make typing errors, accountants not to make accounting errors and CEOs are
expected not to make strategic errors.
3. Total quality recognizes each person is involved for the quality of the individual work and for
the quality of the team work.

Total means that everyone in organisation is involved in the final product or service to the
customer.


Quality does not just mean luxury. The original definition was, quality means conformance to
requirements.
Todays marketplace is now demanding that we go beyond this definition. A powerful definition
of quality to meet these perceptions is quality means delighting the customer by continually
meeting and improving upon agreed requirements.
Management recognises that TQM will not happen by accident. TQM is a managed process
which involves people, systems and supporting tools and techniques.
TQM is therefore a change agent which is aimed at providing a customer-driven organisation.
TQM (Total quality management)
quality and achieve customer satisfaction
improvement or kaizen) and other is goal is customer satisfaction which involves meeting or
exceeding customer expectations
8 essentials of TQM

er selection and development

Evolution of TQM

In early 1990s F W Taylor the father of Scientific Management brought the concept of
product inspection .
In 1924 W Shewhart introduced statistical control charts to monitor production.
After the World War II a dramatic increase caused W Edwards Deming introduced
(SQC) methods to Japanese manufacturing.


Joseph Juran formulated his cost of quality concept emphasizing accurate and complete
identification and measurement of costs of quality.
In 1950s, Armand Fiegenbaum proposed quality control on the product design and
incoming raw material.
In 1960s, Philip Crosby coined the concept of Zero defects.
During 1970s there was a dramatic shift from reactive to proactive approach to quality,
this in turn giving importance to customer satisfaction with a drive of team work.
The US government ,safety regulations, product recall mandated by consumer product
safety commissions changed the society attitude from let the buyer beware to let the
producer beware.
Demings contribution to Japanese industry
(3 decades earlier) made the US companies seek his help and experience. As a result
Ford Motor ,General Motors and Procter and Gamble to take up revolution.
In 1985 ,NASA announced an excellence Award for quality and productivity.
The Malcolm Baldrige National Award was established in 1987.
In Japan, during the II World War the economy was completely disrupted.
In 1950 Dr Edward Deming ,introduced the SQC approach in Japan.
Dr K Ishikawa of Tokyo University gave his contributions.
As a result the rate of economic growth increased to 9 to 10 percent per year and the
national product doubled in 7 to 8 years .
From 1950 to 1970 ,in the course of 20 years the per capita income has increased roughly
by 4 times.
Walter Shewart ,the father of stastistical quality control, initiated the SQC movement
during 1947 48.
Dr Edward Deming also visited India in early 1950s
In 1982 due to the quality trigger in US the concept of quality circles came into
introduction in the public sector units like ,Bharat electronics and Bharat Heavy
Electricals.
QCFI Quality Circle Forum in India came into existence.
Prof. Ishikawa was invited to by CII confederation of Indian industries.
The year 1987 brought the ISO 9000 .
CII organized training course for ISO 9000 in 1989.


Companies practice TQM though Quality circles, Suggestion schemes, kaizen and JIT
Basic principles of TQM
Customer focused approach to all activities and processes in the organization should be
directed towards winning customer satisfaction.
Strategic planning and leadership :leadership should lead to strong customer orientation
in the organization and be willing to make long-term commitments to its customers,
employees, vendors, stockholders and to society.
Restructuring of vertical processes to cross functional horizontal processes to change
the work culture to teamwork and making everyone in the process responsible for the
quality.
Creating a culture of working through internal customer system, where each stage in the
processes and each person in the process can be linked as customers to each other.
Continuous improvement of all processes and activities ,leading to total customer
satisfaction and competitive advantage.
Training and development of people : it is the people who drive the processes under
TQM system. Therefore people should be trained and developed for understanding the
process of TQM,
Empowerment and teamwork of people : team approach to work and cross functional
process management is an important aspect of TQM work culture.
TQM V/S TRADITIONAL MANAGEMENT
TQM
Customer delight focused with respect to activities/processes.
Customer satisfaction through continuous improvement.
It is a proactive measure.
TQM aims at superior performance
Customer delight and benchmarking are the focus.
It is a self-driven and self-imposed culture.
Aims to satisfy all the stakeholders.

TRADITIONAL MANAGEMENT
Product/service focused.
Short term satisfaction.
It is often a corrective measure.
It aims at quality conformance.
State of control is the focus.
It is based on the QMS systems (ISO 9000).
Aims to satisfy customers essential needs.



ADVANTAGES OF TQM
Better product quality
Productivity improvement
Reduced quality costs
Increased market
Increased profitability
Reduced employee grievances
Effective teamwork
Enhancement of job interest
Improvement in human relation and work area morale
Participation culture
Customer satisfaction
Enhanced problem solving
Improved corporate health
Better image and goodwill.



Module 2: Philosophical Framework to TQM Contribution of various gurus of TQM,Deming-
Demings chain reaction, Demings principles, deadly sins, PDCA cycle, Jurans Quality triology,
Jurans breakthrough sequence, Philips Crosby- Quality is free, Taguchis Quality loss function,

OBJECTIVE
To Understand and appreciate the:
Philosophical Framework of TQM
Contributions of various gurus of TQM,Deming-Demings chain reaction, Demings principles,
deadly sins, PDCA cycle,
Jurans Quality triology, Jurans breakthrough sequence,
Philips Crosby- Quality is free,
Taguchis Quality loss function,

PHILOSOPHICAL FRAMEWORK TO TQM



Gurus
Shewhart
Deming
Juran
Fiegenbaum
Ishikawa
Crosby
Taguchi
Principles and Practices
Leadership
Customer satisfaction
Employee involvement
Supplier partnership
Tools and techniques
Benchmarking
Information technology
Quality management systems
Environmental management system
Quality by design
Management tools
Statistical process control
Quality engineering

CONTRIBUTION OF VARIOUS GURUS OF TQM
CONTRIBUTOR CONTRIBUTIONS
Deming 14 points, theory on special & common
causes of variation
Juran Quality is fitness for use, quality trilogy
,cost of quality
Feigenbaum Quality is a total field, customer defines
quality
Crosby Quality is free, zero defects
Ishikawa Cause and effect diagrams, quality circles
Taguchi Taguchi loss function



Figure 1 DEMING W EDWARDS
DEMING W EDWARDS
An associate of Shewhart, worked in Western electric company as a statistician.
He was invited to Japan to led the quality movement.
He modified PDCA cycle of Shewhart to the Plan ,Do ,Study and act.(PDSA).
He also advocated intensive use of Statistics and control charts and focused on product
improvement and service conformance by reducing variations in the process.
He joined the US census bureau in the year 1939 and proved that quality control methods
could lower costs even in an exclusive service organization.
Deming stressed on the importance of suppliers and customers for the business
development and improvement.
He believed that people do their best and it the system that must change to improve
quality.
This 14 points formed the basis for this advice to Japanese top management.
The 14 points are applicable to every industry in product and service sector



DR WALTER A SHEWHART

Worked in Western electric company and AT&T,USA.
He advocated Statistical quality
Control (SQC) and acceptable
Quality level (AQL).AQL is the foundation of today's SIX SIGMA.
He is considered to be the father figure of SQC, who developed control charts for quality
assessment and improvements.
DrShewhart also developed the Plan,Do,Check,Act (PDCA) cycle for continuous
improvement, which is in use even today



JOSEPH M JURAN

Juran also joined Western electric company and developed Statistical quality control
handbook.
JUSE invited him to Japan in 1954.
He identified fitness quality and popularized the same.
Jurans fitness of quality
1. Quality of design- through market research, product and concept.
2. Quality of conformance through management, manpower and technology.
3. Availability through reliability, maintainability an logistics support.
4. Full service through promptness, competence and integrity.
Jurans quality planning road map
1. Identify your customers
2. Determine their needs
3. Translate into your language.
4. Develop a product that can respond to the needs.
5. Develop processes which are able to produce those product features.
6. Prove that the processes can produce the product.


7. Transfer the result in plans to the operating forces

PHILIP B CROSBY

Crosby was vice President of international telephone and telegraph(ITT).
He four absolutes of quality are very relevant to TQM.
Four absolutes of quality
1. Quality is conformance to requirements, nothing more or nothing less and certainly not
goodness or elegance.
2. Quality has to be achieved by prevention and not by appraisal.
3. The performance standard must be zero and not something close to it.
4. The measurement of quality is the price of nonconformance ,ie, how much the defects in
design, manufacture, installation and service cost the company.



ARMAND V FEIGENBAUM

He was the president of American Society of Quality control.
He said Quality is in its essence way of managing the organization.
Feigenbaums cycle time reduction methodology
1. Define process
2. List all the activities.
3. Flowchart the process.
4. List the elapsed time for each activity.
5. Identify non value adding tasks.
6. Eminent all possible non value adding tasks.



KAORU ISHIKAWA

A quality guru from Japan.
He advocated the use of cause and effects diagrams to provide a true representation of the
organizational impacts and producers.
He developed fishbone or Ishikawa diagram for cause and effect analysis.
DEMINGS CHAIN REACTION

The theory states that improvements in quality leads to lower costs because they result in
less rework, fewer delays ,and better use of time and materials.
Lower costs ,in turn, lead to productivity improvements.
With better quality and lower prices, a firm can achieve a higher market share and thus
stay in business, providing more and more jobs.



DEMINGS 14 PRINCIPLES
1) Create constancy of purpose for improvement of product and service. importance of
stability in jobs ,long term plans as investment in innovation, training, R&D.
2) Adopt the new philosophy for economic stability. Customer driven approach as zero
defects,JIT.
3) Cease dependence on mass inspection to achieve quality. results in
bottleneck ,increases cost, measures only causes ,divides the responsibility between
production and quality people. Use appropriate tools to create a balance between quality
and production
4) End the practice of awarding business on price tag alone. Instead, minimize total cost -
move towards a single supplier for any item, on trust.
5) Improve Constantly and forever the system of production and service. Enterprise
systems and services must keep growing in order to catch up with the competitive
market.
6) Institute modern methods of training on the job.
7) Adopt and Institute modern methods of supervision and leadership.
8) Drive out fear : Change and survive.
9) Break down barriers between departments and staff . The workers in design, sales, and
production must work together to face problems and resolve them. open communication
,sharing knowledge.
10) Eliminate the use of slogans and posters . Slogans do it right the first time;;
concentrate on the root cause.
11) Eliminate work standards and numerical quotas. This focuses on quantity rather than
quality of product. Ex Targets
12) Remove barriers that hinder the hourly worker. Eliminate Monotonous tasks, Abolish
annual or merit rating.
13) Institute a vigorous program of education and training. A person must grow after
joining a company, and letting them learn new technology and techniques will increase
employee longevity.
14) Create a situation in top management that will push every day on the above
points. Just like products and services, every employee in a company must work to
accomplish the transformation.



DEMINGS DEADLY SINS
1. Lack of constancy of purpose; short term focus
2. Emphasis on short term profits; cost cutting to meet the quarterly dividend pay.
3. Over reliance on performance appraisals; self-centered NO mutual teamwork.
4. Mobility of management (job hopping); long-term plans are not effective
5. Overemphasis on visible figures; targets cannot give customer satisfaction.
6. Excessive medical costs for employee health care; absenteeism and health care costs
7. Excessive costs of warranty and legal costs ;

DEMING WHEEL/CYCLE(P-D-C-A)

The PDCA cycle is also known as a problem solving process
Plan
A plan can be to initiate a new process or improve an existing one
it should be based upon customer needs, and
resolve to more effectively fulfill the organizations mission
Do
Carry out the process /activities as per the plan
Check
Review the gathered data to determine if the planned and implemented change has
created the quality improvement intended
Act
Take action, either to implement the change or change variables to see if the process can
be made more effective, or
Standardize the new, successful process.



DEMINGS TRIANGLE

DEMINGS THEORY OF VARIANCE

The basic assumption of this theory is variation from the standard activity as a major
source of problems for all process.
Variance increases uncertainty and reduces control over the processes.
TQM assigns managers the task of finding the source of their variance and eliminating it
so that the process can be improved.
All the variance can be categorized into two :
Controlled variance and uncontrolled variance.
1 Controlled variance is a variation from standard process that a worker can correct/manage.


2 Uncontrolled variance is a variation from the standard process due to the impact of some
factor outside the limits of the employee.
Variances can be corrected by workers or managers by changing its common
causes/special causes.
Common causes are as follows
Weakness in the product design
Equipment malfunctions
Poor maintenance of machineries
Incomplete/inaccurate documents maintenance.
Special causes are short term variations in an operating process as follows
Lack of knowledge/skill and competency
Worker negligence

JURAN- QUALITY TRILOGY

Quality trilogy includes the following sequence of events:
1 Quality planning
2 Quality control
3 Quality improvement
Quality planning
1 Identify the customer both the external and internal.
2 Determine the customer needs
3 Develop product features that respond needs.


4 Establish quality goals that meet the needs of customers and suppliers.
5 Develop a process that can produce the needed product
6 Prove the process capability.
Quality Control
1. Choose control subjects.
2. Choose the units of measurement.
3. Establish the measurement
4. Establish the standards of performance
5. Measure actual performance
6. Interpret the difference between the actual and the standard.
7. Take action on the difference
Quality improvement
1. Prove the need for improvement
2. Identify the specific projects for improvements.
3. Organize to guide the projects.
4. Organize for diagnosis for discovery of causes
5. Find the causes
6. Provide remedies
7. Prove that the remedies are effective under operating conditions.
8. Provide control mechanisms.

JURANS BREAKTHROUGH SEQUENCE

Juransbreakthrough sequence identifies a set of actions directed towards achieving major
leaps in quality.
The following are the steps
Step 1 :proof of need.
Identifies some fault in the current process that requires an immediate change.it
identifiescosts of not changing that exceed the costs of change.
Step 2 : project identification
Identifies specific project to bring about improvements which acts as a catalyst.
Step 3: organizing for improvements.


Organizes for successful completion of the selected projects. TOP MANAGEMENT
COMMITTEE resources ;task forces
Step 4 : diagnostic journey
Traces the root cause from the symptoms (systematic causes, random causes, wilful
causes)
Step 5 : Remedial action
The project team identifies a set of alternatives and select the appropriate one .it further
includes implementation and introducing inspection and testing
Step 6 :Resistance to change
Fear of unknown techniques, fear of excel in new environment create resistance among
the employees. Formulate actions to overcome fear.
Step 7 : Holding on to gains
Freeze the new methods and techniques to prevent any return back to old methodology.
PHILIP B. CROSBY
4 Absolutes of Quality Management:
Quality is defined as conformance to requirements , not goodness
The system for achieving quality is prevention, not appraisal
The performance standard is zero defects, not that is close enough
The measurement of quality is the price of non-conformance, not indexes

Crosbys 6 Cs
Comprehension (understanding)
Commitment (by all)
Competence (Attitude, skill and knowledge)
Correction (Elimination of errors)
Communication (Support of all people, customers and suppliers)
Continuance (improvement)



CROSBYS QUALITY VACCINE (CROSBYS TRIANGLE)

Integrity, Policies
Integrity represents an honest attempt by the management to eliminate bureaucracy, improve
performance and satisfy customers.
Systems and operations
Focus on designing new systems and operations to maintain the firms new quality environment.
Communication
Refers to the flow of information ( internal&external) both between the functional
departments ,firm ,suppliers and customers. The vaccine requires regular exchange of
information about
quality problems ,
performance on quality characteristics,
progress towards quality goals and
opportunities for improvement



CROSBY QUALITY IS FREE

Crosby's prescription for quality improvement was a 14 step program.
His belief was that a company that established a quality program will see savings more
than pay off the cost of the quality program ("quality is free").
Crosbys 14 Steps for quality improvement
1. Management commitment
2. Quality improvement team
3. Quality measurement
4. Cost of quality
5. Quality awareness
6. Corrective action
7. Zero Defects program
8. Supervisor training
9. Zero defects day
10. Goal setting
11. Error cause removal
12. Recognition
13. Quality councils
14. Do it all over again

TAGUCHIS QUALITY LOSS FUNCTION
Taguchis asserts the quality of a product is a function of key product characteristics
(performance characteristics ).
The ideal value is its target value.
Taguchis Quality loss function estimates loss to society from the failure of a product to
meet its target value for a particular performance characteristic.
A high quality product assures target values consistently throughout its life span under
all operating conditions


This loss can be incurred by the
1 Consumers (short product life, repair costs),
2 Company (increased scrap, rework and warranty costs) and
2 Society ( pollution , safety)

Quality loss function is expressed as
L=C (X-T)2
Where L = Total Loss
C= a constant
X= actual average value of quality
characteristics and
T= target value of quality characteristic

ISHIKAWA AND QUALITY CIRCLES.
Dr Ishikawa was instrumental to formulate
1 The concept of CWCQ (companywide quality control)
2 The audit process for selection a company to Deming award.
3 Teambased problem solving


4 Quality circles.
5 Cause and effect charts or fish bone diagrams
6 Bottom up view of quality

QUALITY CIRCLE
A quality circle or quality control circle (Q.C Circle) is a small group of employees 8 to
10 (average number of nine) who volunteer to meet regularly with a facilitator to solve
work related problems in their work area. The group with their leader usually meetonce
a week after their working hours.
Purpose:
To undertake work related projects designed to improve working conditions, enhance
mutual self developmentand to advance the company, all by using quality control
concepts.

HOW QC CIRCLE WORKS
Formation of QC circle
Registration of QC circle
Improvement of activities
QC circle grand meeting of each division


QC circle grand meeting of plant
Companywide QC circle grand meeting

Improvement of activities
Selection of the problem
Study the problem
Planning for improvement
Execution of the improvement
Confirmation of effect
Conclusion
Presentation
Characteristics of Quality circles.
Small group of employees : 8 to 10
Members are from the same work area or doing similar type of work
Membership of the quality circle is voluntary
Members meet regularly for about an hour every week
Members meet to identify, analyze and resolve work(quality) related problems.
Members resolve work related problems leading to improvement.
Quality circles enrich the work life of the employees.
Benefits of Quality Circles
Tangible benefits
Better quality
Improved productivity
Higher safety(reduced number of accidents)
Greater cost effectiveness
Better housekeeping
Increased profitability
Waste reduction
Reduced absenteeism
Reduced grievances.


Intangible benefits
Enriched quality of work life.
Attitudinal changes
Harmony ,mutual trust
Effective team working
Participative culture
Human resource development
Promotion of job knowledge
Greater sense of belonging.



Module 3
Benchmarking Definition, reasons for benchmarking, types of benchmarking, process of
benchmarking what to benchmark, understanding current performance, planning, studying
others, using findings, Xerox model of Benchmarking, Advantages and pitfalls of benchmarking
Concept of Kaizen and its applications

OBJECTIVE
To understand the meaning of Benchmarking
To identify the various reasons for benchmarking,
To list the types of benchmarking,
To explore the process of benchmarking
To know what to benchmark,
To understand current performance, planning, studying others, using findings,
To appreciate Xerox model of benchmarking,
To realize the advantages and pitfalls of benchmarking
To recognize the Concept of Kaizen and its applications

BENCHMARKING DEFINITION
Benchmarking is the process of continually searching for the best methods, practices
and processes, and adapting their good features and implementing them to become the
best of the best.
It is defined as measuring our performance against that of best-in-class companies,
determining how the best-in-class achieve those performance levels and using the
information as a basis for our own company's targets, strategies and implementation
EG: Microsoft, FMCG-HLL, Toyota, Ford
REASONS FOR BENCHMARKING
It acts as a tool to achieve business and competitive objectives.
It is a powerful and effective tool to take up right decisions and align with the
organizational strategies.
It helps organizations to take right decisions in choosing the appropriate markets.
It guides the organization to determine the strengths they need to gain competitive
advantage.


Benchmarking helps organization to develop strengths and reduce weakness.
Benchmarking helps organization to set goals based on the external environment.

TYPES OF BENCHMARKING
Performance or operational benchmarking
Process or functional benchmarking
Strategic benchmarking
Performance or operational benchmarking
Involves pricing, technical quality, features and other performance characteristics of products
and services
It also involves comparing competitors products, process and analyzing them
Process or functional benchmarking
Analyses work processes such as billing, order entry or employee training, manufacturing,
work /job design, techniques, procedure/process, sequence of operations.
This identifies the most effective best practices in companies that perform similar functions
Eg: Best practices of L.L.Beancompany was adopted by Xerox which reduced the cycle time
by 50 %
Strategic benchmarking
Examines the winning strategies of other companies and to construct a key success factor(KSF)


BENCHMARKING PROCESS



1 Getting started
Planning (work technique)
Organizing and ( funds, technical team, technology vendor, training team, top management)
Managing for benchmarking (adopting changes and adjustments)
2 Preparing to benchmark
Identify key processes which processes is to improved
Form team core workmen
Understand your own process KRA s strength /weakness
3 Conducting research
Collect information who is best and what is best org; brand image, market position,
competitive secret, competitors ,
4 Selecting whom to benchmark
Establish relationship
Plan to collect and share information
5 Collecting and sharing information
Surveys
Site visits
Determine any third parties( to collect the data)
6 Analyzing adapting and improving
Compare data
Plan to surpass
Implement and monitor
improve

Performance Measure Examples
Accounting
Percentage of Late Payments
Time to Respond to Customer Requests
Number of Billing Errors
Number of Payroll Errors



Information Services
Number of Errors / Code Line
Percent of Reports Received on Schedule
Number of Rewrites
Number of Errors Found After

Marketing
Accuracy of Forecast
Number of Incorrect Order Entries
Overstocked Supplies
Contact Errors
Purchasing
Purchase Order Errors
Downtime Due to Shortages
Excess Inventory
Cycle Time (from start of purchase to receipt in-house)
Product Engineering
Project Completion Cycle Times
Engineering Changes/ Document
Number of Errors Found During Design Review
Number of Errors Found in Design Evaluation
Quality Control
Percentage of Lots Rejected in Error
Number of Engineering Changes Detected After Design Review
Errors in Reports
Cycle Time for Corrective Action



XEROX 12-STEP BENCHMARKING PROCESS

Phase 1: Planning
1. Identify what to benchmark;
2. Identify comparative companies;
3. Determine data collection method & collect data.
Phase 2: Analysis
4. Determine current performance gap;
5. Project future performance levels.
Phase 3: Integration
6. Communicate finding and gain acceptance;
7. Establish functional goals.
Phase 4: Action
8. Develop action plans;
9. Implement specific actions & monitor progress;
10. Recalibrate benchmarks.
Phase 5: Maturity
11. Attain leadership position ;


12. Fully integrate practices into processes.

ADVANTAGES OF BENCHMARKING
It promotes a thorough understanding of company's processes, strength & weaknesses is well
understood.
2. Saves time and money as known practices are adopted as adopts the practices followed by
superiors competitors rather than invention
3. Identifies non-value added activities and plans for process improvement
4. Enables comparison of performance measures in different dimensions, like Return on assets,
cycle time, delivery time and etc..
5. It focuses on processes and not on products, it is not restricted to a company boundary
6. It allows organizations to set realistic ,new performance targets to do things in a better way
7. It defines specific gaps in performance and to select that process for improvement, and
redesigning the process
8. It provides a basis for training human resources
9.Brings in new changes and ideas.
10.It is a ongoing system.
11. It helps to set goals with reference to external perspective.

LIMITATIONS OF BENCHMARKING
it focus on the process not the situation.
It creates arrogance against competitors.
Best practices is not static , but a moving target.
Benchmarking is not a panacea (solution) that can replace all other quality efforts
Benchmarking is not a instant pudding. It will not the improve performance , if top
management is not providing all the resources and not adopting quality culture



KAIZEN AND ITS APPLICATIONS
Kaizen is a Japanese word for improvement, change for the better, or continuous
improvement.
the concept of Kaizen has evolved since the 1950s into a business strategy of making
small, but continuous changes for the better in company operations.
These changes can range from manufacturing steps to productivity, inventory or quality
control matters.
Kaizen involves every employee and strongly encourages suggestions for improvements

5S Kaizen Principles
Seiri means to straighten up
Seitonmeans putting things in order
Seisomeans to clean up
Seiketsumeans personal cleanliness
Shitsukemeans discipline.
Seiri means to straighten up /sort /clear out
Differentiate between the necessary and unnecessary and discard the unnecessary
It includes
Work in process
Unnecessary tools
Unused machinery
Defective products.
Papers and documents
Seitonmeans putting things in order/Set Things in Order
Keep the things in order so that they are ready to use when required.
This avoids waste of time due to searching for things like tools, parts, components.
everything should be at its place and there should be place for everything
Seisomeans to clean up /clean and shine
keep the work place clean
Every individual should clean the workplace every day before starting the days work
and also at the time of closing the work


Seiketsumeans personal cleanliness/Standardize
Having good housekeeping practices by personal attention to personal cleanliness
Shitsukemeans discipline.
Every worker and manager has to follow procedures in the work place with discipline.



Module 4
Business Process Re-engineering (BPR) Introduction, Need for BPR, Implementing BPR, Steps
in BPR, Re-engineering vs. TQM, BPR Vs. Kaizen, Re-engineering the structure, change
management and BPR, BPR and IT, Advantages and Limitations, Indian examples of BPR

OBJECTIVE
To understand the meaning of Business Process Re-engineering (BPR) & Introduction,
To realize the Need for BPR,
To explore the process of BPR Implementation & Steps in BPR,
To differentiate between Re-engineering vs. TQM,
To distinguish between BPR Vs. Kaizen,
To appreciate the need for Re-engineering the structure, change management and BPR,
To understand the relation among BPR and IT,
To recognize the advantages and Limitations of BPR,
To discuss Indian examples of BPR

INTRODUCTION TO BPR
Customer satisfaction has increasingly become the cardinal principle governing any successful
business
Despite emphasis on customer satisfaction, there has been complaints and disappointment , the
reasons for this lies in the process and systems
In many cases, present systems can no longer be fixed and improvements are not sufficient
Hence reengineering of the entire system is needed.

Michael Hammer of the US coined the term re-engineering .
the fundamental rethinking and radical design of business processes to achieve dramatic
improvements in critical contemporary measures of performance such as cost, quality, service and
speed
It is also known as process reengineering or business process re-engineering
It involves asking basic questions about business processes why do we do it? Why it is done in
this way?

Radical redesigning involves tossing out existing procedures and reinventing the process.
The goal is to achieve quantum leaps in performance
Principles of BPR
Rule 1: Organise around outcomes, not tasks
Rule 2: Have those who use the output of the process perform the process (work should be
carried where it is)


Rule 3: Merge information processing work into real work that produces the information
Rule 4: Treat geographically dispersed resources as though they work centralized
Rule 5: Link parallel activities instead of integrating their results
Rule 6: Put the decision point where the work is performed and build control into the process
Rule 7: Capture information once-at the source

NEED FOR BPR

Develop business vision and process objectives
Identify processes to be redesigned
Understand and measure existing processes
Identify information technology levels
Design and build a prototype of the process
THE IMPLEMENTATION OF BUSINESS PROCESS REENGINEERING
As more organizations undertake business process reengineering (BPR), issues in implementing
BPR projects become a major concern. This field research seeks empirically to explore the
problems of implementing reengineering projects and how the severity of these problems relates
to BPR project success. Based on past theories and research related to the implementation of
organizational change as well as field experience of reengineering experts, a comprehensive list
of sixty-four BPR implementation problems was identified. The severity of each problem was
then rated by those who have participated in reengineering in 105 organizations. Analysis of the
results clearly demonstrate the central importance of change management in BPR
implementation success. Resolutions of problems in other areas as technological competence and
project planning were also determined to be necessary, but not sufficient, conditions for
reengineering success. Further, problems that are more directly related to the conduct of a project
such as process delineation, project management, and tactical planning were perceived as less
difficult, yet highly related to project success. This situation was also true for human resource
problems such as training personnel for the redesigned process. These findings suggest that
reengineering project implementation is complex, involving many factors. To succeed, it is
essential that change are more contextual (e.g., management support and technological
competence) as well as factors that pertain directly to the conduct of the project (e.g., project


management and process delineation). As one of the first pieces of empirical evidence based on a
field study, this research emphasizes the importance of addressing BPR implementation within
the broader context of organizational change in a complex sociotechnical environment.

IMPLEMENTING BPR, STEPS IN BPR

Step 1: Formulate / Modify business visions, policies, objectives
Step 2: Formulate / Modify business strategies according to changing customer requirements,
technology changes and competition
Step 3: Analyze the existing business process cycles & workflows and determine how they may
be modified or refined
Step 4: Apply IT to setup an optimal Business Information Management Architecture (BIMA) to
support the reengineered business process
Step 5: Modify or redesign the existing processes according to the reengineering strategies and
develop refined Business Process Automation Systems (BPAS)
Step 6: Apply IT strategies to map BIMA onto an Enterprise Information Management System
(EIMS) that is integrated across the enterprise and that fits into and supports the reengineered
Business process cycles and workflows.
Step 7: Integrate the EIMS with the BPAS to build up the completed reengineered business
system
Understanding
the process

Stream-
lining

Measurement
& controls

Continuous
improvements

Understanding
the process

Understanding
the process

Understanding
the process

Understanding
the process



Step 8: Repeat steps 1-7 for continuous BPR due to changing customer demands, technology
changes and business strategies, which leads to business stability

Reengineering in a service industry
Make the customer the starting point for change
Design work processes in light of organizational goals
Restructure to support frontline performance

3 Rs of reengineering
Rethink: this phase requires examining the organizations current objectives and underlying
assumptions to determine how well they incorporate the renewed commitment to customer
satisfaction
Redesign: This phase requires an analysis of the way the organization produces the products
or services it sells-how jobs are structured, who accomplishes what tasks and the results of each
procedure. Which element to be redesigned is determined to make the customer satisfied.

Retool: This phase requires a thorough evaluation of the current use of advanced
technologies, especially electronic data processing systems, to identify opportunities for
change that can improve quality of services and customer satisfaction

RE-ENGINEERING VS. TQM
It is very important to understand that Reengineering is not a separate discipline. It is, in fact, a
subset of TQM. The essential difference between (Business Process) Reengineering and TQM is
that reengineering aims at quantum gains on the order of 30 to 50 percent or more, whereas Total
Quality Management programs stress incremental progress, striving for inch-by-inch gains again
and again.
The two approaches to improve performance are not mutually exclusive; it makes sense to use
them in tandem. Reengineering can be used to first produce good basic design that dramatically
improves a business process. Total quality programs can be used to work out bugs, perfect the
processes, and gradually improve both efficient and effectiveness.
Such two-pronged approach to implementing organizational and strategic change is like a
marathon race where you run fast four laps as fast as you can, then gradually pick up speed the
remainder of the way.
Both TQM and BPR are customer-oriented. They both aim on improving the customer
satisfaction. Also, they both suggest thinking outside in. On the other words, they both suggest to


think from the customer's viewpoint. Also, both TQM and BPR are process-oriented. They both
target to alter the processes, but not just on the product. Moreover, they both take team approach.

Nearly all BPR projects are initiated by top-down approach. Since BPR would results great
changes, staff resistance is obvious. Therefore, top management's support and commitment are
very important. For TQM, both top-down approach and bottom-up approach are possible.
The basic assumptions of TQM and BPR are different. TQM assumes that the existing practices
or systems are principally right and useful. The target of TQM is to improve on the basis of the
existing system. However, BPR takes an opposite assumption. BPR assumes the existing system
is useless and suggests starting it over. Unlike TQM that aims on smoothly and incremental
improvements, BPR aims on dramatic results.
TQM emphasis on total involvement, including all the stakeholders. The involvement even
extends to suppliers and customers. Also, TQM also suggests involving all the processes in the
company, including human resources management, order fulfilling, manufacturing, marketing
and customer management and others. However, for BPR, the project can be controlled to a
specified area only.
Standardization is one of the key points of TQM. TQM aims on standardize the practices, thus
achieving a consistent performance. It also makes that there is a certain degree of documentation
for TQM. However, BPR emphasis on flexibility and believes that standardization would
increase the complexity of the process. Therefore, standardization is rare in BPR and the level of
documentation is much lower.
TQM emphasis on the use of statistical process control. However, there is no similar concern for
BPR. On the other hand, BPR emphasis more on the enabling role of information technology.
TQM is a cultural issue. Once the culture is built, TQM is absorbed in the daily operation.
However, BPR is a project. It is with a clear target that should be achieved as soon as possible.
In fact, BPR is a risky project that is suitable for organizations in deep trouble or facing great
challenges. However, an organization cannot always be under BPR. TQM, on the other hand, can
be treated as a consolidation approach for the organizations to maintain continuously
improvements.
BPR VS. KAIZEN
BPR assumes lack of processes as the basis of change that might not be true in all cases.
Kaizen accepts current state of processes and works towards gradual improvement.



BPR starts the process of improvement from a clean slate, i.e. totally ignore current status
as opposed to kaizen.

BPR is hard to implement, technology oriented and requires and considerable change
management ,opposed to kaizen which is simpler, people oriented and long term oriented.

RE-ENGINEERING THE STRUCTURE
Restructuring the firm consists of altering its decision-making, operating divisions, and
management culture. Reengineering entails changing the procedures by which the work is
accomplished and products delivered.
Process restructuring, as championed by Michael Hammer and James Champy in their
Reengineering the Corporatio, can deliver costs reductions of 50 percent or more. Corporate
restructuring, as portrayed by John Womack and colleagues in The Machine that Changed the
World, also suggest a law of halves. Womack and his colleagues studied the Japanese
automobile industry, and their research revealed that Toyota and other makers by applying the
principles of teamwork, quality control, customer focus, minimal buffers and continuous
improvement had cut product defects by half, factory space by half, work-time by half, and
development time by half.
While diversification had been a hallmark of good management during the 1960s, shedding
unrelated business had become the measure during the 1980s and 1990s. De-diversification,
back to basics, and a return to core competencies emerged as restructuring drivers for good
reason. More focused firms, as Robert Hoskisson and Michael Hitt show in Downscoping,
display superior performance.
Restructuring actions taken in single areas tend to achieve few enduring gains. Downsizing the
workforce generates short-term cost savings, but in the absence of a broader reorganization, it
brings only temporary relief. Reengineering business process creates immediate gains, but the
gains are short-lived without changes in performance measures, compensation incentives,
information technologies, employee skills, and organizational structure. Restructuring and
reengineering, then, should be seen as a multi-faceted revamping of the corporation.


Company restructuring has both worsened and improved the lot of those who work there. Lean
redesigns, cost reductions, and repeated downsizings have terminated careers and decimated
communities. At the same time, reengineering, flexible work, and streamlined hierarchies have
improved employee productivity and product quality. The process of restructuring frequently
brings long work weeks and high stress levels, but the product of restructuring also often results
in greater autonomy and more challenging work. One study of restructuring experience revealed
heightened loads, diminished morale, and reduced employee commitment, but it also found
enhanced quality, customer service, risk taking, workforce competence, and productivity.
The dual impact of corporate restructuring on those who experience and manage it accounts for
some of the schizophrenia toward restructuring. Work environments can be filled with high
anxiety and low morale. At the same time, however, the quality of work life often improves,
with more variety, responsibility, and teamwork. Executives experience stress as they manage
the transformation, but in doing so they are also laying a framework for improved company
performance, richer compensation packages, and enhanced shareholder return.

CHANGE MANAGEMENT AND BPR
BPR is all about the process. Change Management is all about the people.
In a BPR context, unless you've completely automated the process then you won't get 100% of
your ROI until 100% of the people involved have internalized the new process! One of the key
reasons that many Hammer and Champy style BPR initiatives failed miserably was that their
total focus was on the Q component, to the exclusion of the A component. Alas, for most
business initiatives you don't get dollar one of ROI until somebody's behavior changes. I
won't repeat the most excellent rant extended polemic of the previous post, but there's more
discussion of the topic there if you're interested.
All of these three terms relate to change, but to different levels and types of change. The problem
with the fuzzy definitions is that it leads to people applying the wrong practice to their business
challenge. Its like someone saying, We need to dig a tunnel from England to France; let me get


my Black & Decker rechargeable drill. Or equally bad, We need to place a screw in the living
room wall to hang a mirror; hold on while I get the dynamite.
Change Management, Process Reengineering and Corporate Transformation are clearly diffent.
They are distinct processes, require special capabilities, and are applied in different ways.
Change Management is geared towards communications and training on some specific shift in
the use of an information system or process.
Business Process Reengineering (BPR) relates to taking an entire end-to-end business process,
like billing and collecation or sales as examples, breaking it down to component steps,
realignigng the steps to be more efficient and effective, and implmenting the new process. The
implementation of BPR projects typically entail major systems changes and significant changes
to the organization and how business is conducted.
Corproate Transformation is more focused on changing the business overall. A transformation
effort is centered on clarifying the corporate strategy and putting a process and discipline in
place to drive strategy execution, alignment of the orgnaization and disciplined follow through
for performance.
The most common mistake we see in selecting the right tool for change is underestimating the
level of change that is being called up. What may seem to management as a minor tweak in
business process is often received by sales and operations as a major shift that is disruptive to the
daily operations and requires much more preparation and considerations to accomplish. My
ChangeThis artice titled, People Dont Hate Change, They Hate How Youre Trying to Change
Them became one of the fastest downloaded pieces on their site. The team at ChangeThis said
that they knew that trying to get corporate change right was one of the biggest frustrations people
have and so this was no surprise to them.



BPR AND IT
IT has penetrated the office and services environment since the 1978.The shift from mainframe
to PC based technology is breaking down communication barriers between employees and
customers. Now managers and employees from various departments are designing and
controlling complex business information systems. IT capabilities involve improving information
access and coordination across organizational units. It is so powerful that it can actually create
new process design options, rather than simply support it. In his book, Business the Speed of
Thought, Bill Gates argues that if the 1980s were about quality and the 1990s were about
reengineering, then the 2000s will be about velocity. Gates advocates complete digitalization of
all aspects of life. He argues that to be successful in the digital age, companies need to develop a
new digital infrastructure similar to the Human nervous system. This new digital system enables
companies to run smoothly and efficiently, makes them respond quickly to emergencies and
opportunities, provides a mean for quickly getting valuable information to the people in the
company who need it. This in turn empowers employees to make decisions and interact with
customers .What is the Relation between BPR & Information Technology? Hammer considers IT
as the key enabler of BPR . Davenport & Short argue that BPR requires taking a broader view of
both IT and business activity, and of the relationships between them. IT capabilities should
support business processes, and business processes should be in terms of the capabilities IT can
provide. They believe IT's promise and its ultimate impact is to be the most powerful tool for
reducing the costs of coordination .It has been argued that innovative uses of IT would inevitably
lead many firms to develop new, coordination -intensive structures, enabling them to coordinate
their activities in ways that were not possible before. Such coordination -intensive structures may
lead to strategic advantages.



IT Roles in Initiating and Sustaining Reengineering

Before the Process Design

During the Process Design

During the Implementation

Create infrastructures and
manage information that
support evolving organization

Bring vast amounts of
information into the process

Create a digital feedback
loop

Foster process thinking in
organizations

Bring complex
analytical
methods to bear on the process

Establish resources for
critical evaluation of the
reengineered process

Identify and select process for
redesign

Enhance employees ability to
make more informed decisions
with less reliance on formal
vertical information flows

Improve IT processes to
meet increasing needs of
those divisions that have gone
under reengineering
processes

Participate in predicting the
nature of change and
anticipate the information
needs to support that change

Identify enablers for process
design

Institute a program of
cleanup and damage
control in case of failure

Educate IT staff in non
- technical issues such as
marketing, customer
relationships, etc.

Capture the nature of proposed
change and match IT strategy to
that change

Communicate ongoing results
of the BPR effort

Participate in designing
measures of success/ failures
of reengineering

Capture and disseminate
knowledge and expertise to
improve the process

Help to build commitment to
BPR

Communicate ongoing results
of the BPR effort

Evaluate the potential
investment and return of
reengineering efforts

Transform unstructured
processes into reutilized
transactions

Reduce/replace labor in a
process

Define clear performance goals


and objectives to drive the
implementation

Define the boundaries and
scope of the process

ADVANTAGES OF BPR
1. Organization can achieve radical changes in performance by cost , cycle time, service and quality
2. It boosts competitiveness in the operations through simpler, leaner and more productive processes
3. Encourages organization to problem solving thinking approach
4. It helps organizations to make noticeable changes in the pace& quality to respond to customer
needs
5. An organization can be transformed from rule driven organization to a marketing structured
organization to focus on customer
6. It helps to get better market share and profitability
7. Workers are encouraged to make suggestions and creates a TQM culture
8. It helps in creating challenging and more rewarding jobs with broader responsibilities

LIMITATIONS OF BPR
1. It is not a panacea, application of it matters a lot.
2. It is not simple or easy to do. Hence companies do not invest time and money on BPR
3. Corporate strategy support is needed
4. BPR cannot be realized without Information technology
5. Processes in functional areas must be improved
6. It requires teamwork from all the employees

Example of FORD company-BPR
FORD Company has employed 500 people in North America for Accounts Department
The Staff were spending more time in resolving problems between purchase orders,
receiving documents and invoices


FORD reengineered the Accounts payable process, introducing a system of online database
for purchase orders and other documents processing
This BPR brought a very good change in FORD company
Staff members were reduced by 75% and faster processing was possible which saved time
and cost



Module 5
Quality Management Systems(QMS) Introduction, meaning of QMS, ISO 9000, Benefits of ISO,
ISO 9000-2008 series, implementation of ISO 9000,Problems related to ISO 9000, QS 9000,
Need for QS 9000, QS 9000 series ,ENVIRONMENTAL MANAGEMENT SYSTEM (EMS),
ISO 14000 series, Benefits of ISO 14000, Integrating ISO 9000 & 14000, SEI-CMM level 5.

OBJECTIVE
To understand the importance of
Quality Management Systems (QMS) Introduction, meaning of QMS,
ISO 9000,
Benefits of ISO, ISO 9000-2008 series,
Implementation of ISO 9000,
Problems related to ISO 9000,
QS 9000, Need for QS 9000, QS 9000 series
ENVIRONMENTAL MANAGEMENT SYSTEM (EMS), ISO 14000 series,
Benefits of ISO 14000,
Integrating ISO 9000 & 14000,
SEI-CMM level 5

QUALITY MANAGEMENT SYSTEMS(QMS) INTRODUCTION, MEANING OF QMS

A quality management system (QMS) is a collection of business processes focused on
achieving your quality policy and quality objectives i.e. what your customer wants and
needs.It is expressed as the organizational structure, policies, procedures, processes and
resources needed to implement quality management. Early systems emphasized predictable
outcomes of an industrial product production line, using simple statistics and random sampling.
By the 20th century, labour inputs were typically the most costly inputs in most industrialized
societies, so focus shifted to team cooperation and dynamics, especially the early signaling of
problems via a continuous improvement cycle. In the 21st century, QMS has tended to converge
with sustainability and transparency initiatives, as both investor and customer satisfaction and
perceived quality is increasingly tied to these factors. Of all QMS regimes, the ISO 9000 family
of standards is probably the most widely implemented worldwide - the ISO 19011 audit regime
applies to both, and deals with quality and sustainability and their integration.



ISO 9000

ISO 9001: 2000
A revolution occurred in 1947 in the management of quality worldwide when ISO (Geneva,
Switzerland) bought out a set of standards pertaining to the practice of quality assurance methods
within a company.
Termed as ISO 9000 standards, these standards proved their value around the globe. Many
countries including India have adopted ISO.
ISO 9000 is not a mandatory system or it is not a government regulation. However it is a very
important customer regulation. It provides assurance to a wide variety of customers about an
organizations quality assurance methods and quality management practices

5 objectives of ISO 9000
1. Achieve, maintain and seek to continuously improve product quality including service
relationships
2. Improve the quality of operations to continuously meet customers and stake holders stated and
implied needs
3. Provide confidence to internal management and other employees that quality requirements are
being fulfilled and that improvement is taking place

4. Provide confidence to customers and other stake holders that quality requirements are being
achieved in the delivered product
5. Provide confidence that quality system requirements are fulfilled

Structure of ISO Quality standards ISO 9000



ISO 9001:2000 Model



ISO requirements
1. Management responsibility
2. Quality system
3. Contract review
4. Design control
5. Document and data control
6. Purchasing
7. Control of supplied products
8. Product identification and traceability
9. Process control
10. Inspection and testing
11. Control of inspection, measuring and test equipment


12. Inspection and test status
13. Control of nonperforming products
14. Corrective and preventive action
15. Handling, storage , packaging, preservation and delivery
16. Control of quality records
17. Internal quality audits
18. Training
19. Servicing
20. Statistical techniques

Quality Management System (QMS)- Principles of new standard for ISO

Principles of new standard



Quality Manual
It is a document containing the quality policy, quality objectives, structure chart, and description
of the quality system of an organization. A quality manual often explains how the requirements


of a quality standard are to be met and identifies the person responsible for quality management
functions.

BENEFITS OF ISO CERTIFICATION
International competition and customer demands
Market realities and perceptions
Internal Organisational Health

Advantages of ISO 9000 certification
Marketing muscle: ISO company offers a better product and service which gives the marketing
strength to a company

Contractor selection : ISO certification helps in the Selection of contractors in abroad which
otherwise becomes difficult to search for a contractor
Supplier : Selecting a new supplier can be time consuming and costly. If a supplier is ISO
certified , it is easy to select the supplier
Benefits for all the parties like companies, suppliers, contractors and customers
Continual improvements
Criticism (Disadvantages) of ISO
Bureaucratic
Costly
No guarantee that a company that is certified provides a quality service or product
Quality certification only provides a book of procedures and not necessarily better quality
Many companies such a s Hewlett-Packard , Marc and Spencer enjoyed a reputation for quality
before certification of ISO
People are demotivated because certification puts a block on individual initiative
Systematic controls and written procedures are considered as being unnecessary policing of
activities of workers.
Demands more work from employees and hence more human resources are required



ISO 9001:2000 -Transition Process

Implementation of ISO
Establishing a Quality Policy
Developing a corrective action process to monitor and control non-conformance (NC)
Writing document control procedures (work instructions)
Completing drafts of detailed procedures for each ISO element, reviewing and approving
them
Completing Quality manual which consolidates all procedures
Training all employees on the quality policy and audit procedures of the company
Conducting internal audits
Preparing for registration audit



Registration of ISO
o Registration is done through a Third party auditor known as registration agency (registrar)
o Registrar certifies the company and this certificate is accepted by all of the companys
customers

Registration process
1. Document review : of the quality system documents or quality manual by the registrar
2. Pre assessment : identifies potential non-compliance on the quality system
3. Assessment : of quality system by 2-3 auditors
4. Surveillance : of periodic reaudit to verify conformity with the practices

PROBLEMS RELATED TO ISO 9000
Overemphasis on Inspection
Questions of Safety
"Not a True Quality Program"
Administration and Control
Required for Basic Survival
Employee and Customer Impacts
Relationship with Quality Award Programs
Lack of Management Support

QS9000
QS 9000 is a quality standard developed by a joint effort of the Big Three automakers, General
Motors ,Chrysler and Ford. It was introduced to the industry in 1994. It has been adopted by
several heavy truck manufacturers in the U S as well. Essentially all suppliers to the domestic
automakers need to implement a QS9000 system.



Description
The standard is divided into three sections with the first section being ISO 9001 plus some
automotive requirements.
The second section is titled "Additional Requirements" and contains system requirements that
have been adopted by all three automakers - General Motors, Chrysler and Ford.
The third section is titled the "Customer Specific Section" which contains system requirements
that are unique to each automotive or truck manufacturer.
On December 14, 2006, all QS9000 certifications were terminated. With QS9000, the middle
certification between ISO 9001 and ISO/TS 16949, no longer valid, businesses had a choice
between either ISO9001 or TS16949. QS9000 is considered superseded by ISO/TS 16949.



Need for QS 9000
QS-9000 will help companies to stay ahead of their competition. It will do this by filling gaps in
the business and quality systems that can cause problems. QS-9000 eliminates redundant and
unnecessary work practices. QS-9000 tells current and potential customers that the product has
consistent quality and is manufactured under controlled conditions. This system is globally
accepted as proof of quality in the automotive industry and is also a major customer requirement.
QS-9000 is sometimes seen as being identical to ISO 9000, but this is not true. Even though each
element of ISO 9000 is an element of QS-9000, QS-9000 adds clauses to the majority of the ISO
9000 elements. For example, QS-9000 adds requirements for a business plan, tracking customer
satisfaction and bench marking to element 4.1 of ISO 9000, Management Responsibility. QS-
9000 also uses sector-specific requirements. The following requirements are not based on ISO
9000:
production part approval process
the requirements for gaining approval from the customer to run a new or altered part or
process
continuous improvement
automotive suppliers are required to have systems in place to ensure that organized,
measurable improvement activities take place for a variety for business aspects
manufacturing capabilities
requirements for planning and effectiveness for equipment, facilities and processes
requirements for mistake proofing, and tooling management.
Advantages of QS 9000
Companies minimize deficiencies in supply and support of products and services.
Companies identify problem areas and address them quicker.
Companies identify customer needs more accurately.
Companies become more consistent in their product and services.



ISO 9000 series
glossary

ion, installation and
servicing of products or services

g the elements of the Quality Management system

ENVIRONMENTAL MANAGEMENT SYSTEM
Systematic way of managing an organizations environmental affairs
Based on Plan-Do-Check-Act Model (PDCA)
Focused on Continual Improvement of system
Addresses immediate and long-term impact of an organizations products, services and
processes on the environment.
A tool to improve environmental performance

To get your environmental ducks in a row!
Struggling to stay in compliance and keep track of regulations/laws
Environmental management just one of many responsibilities
Establish a framework to move beyond compliance
Vehicle for positive change; improved employee morale, enhanced public image
To reduce Employee turnover

ISO 14000

ISO 14000 Family
A series of guidance documents and standards to help organizations address environmental
issues. Ones below deal with EMS.
14001: Environmental Management Systems


14004: EMS general guidelines
14010: Guidelines for Environmental Auditing
14011: Guidelines for Auditing of an EMS
14012: Auditing - Qualification criteria

To Whom Do the Standards Apply?
Standard is Voluntary
Large and Small Business & Industry
Service Sectors (hospitals, hotels, etc.)
City and Country Government
Applicable to all types of organizations, of all sizes anywhere in the world

Companies who have ISO 14000 system

EMS is implemented in companies like
o IBM
o Xerox
o Ford and GM
o Toyota
ISO 14001 Key Elements
1. Policy Statement
2. Identification of Significant Environmental Impacts
3. Development of Objectives and Targets
4. Implementation Plan to Meet Objectives and Targets
5. Training
6. Management Review



INTEGRATION OF ISO 9000 AND 14000

Quality Systems Inter-Relationships

Documentation is much talked about. There are different types. At Motorola, for example, there
are SOPs (standard Operating Procedures) and maintains a Quality Systems Manual. There is
process documentation in the manufacturing areas.
Everyone uses documentation outside of work. If you buy something (like a clock), there are
instructions in the box. That is documentation.
Think of documentation as instructions. Documentation explains how to do things.
The auditors job is to make sure everyone is Following Instructions.

Typical Types of Records
o Contract Review
o Purchasing
o Identification and Traceability
o Process Control


o Inspection and Test
o Control of Measurement and Test Equipment
o Non-conforming Product
o Corrective and Preventive Action
o Internal Quality Audits
o Training

SEI - CMM LEVEL 5
Introduction
Customer satisfaction has become the motto of many organisations , in todays competitive
world.

exceeds budget and ends up in chaotic project
effective process
mature disciplined process
practices for planning, engineering, and managing software development &
maintenance.
product quality
of an organisations software process
to the state of the practice of the industry

CMM guides software organisations to gain control of their processes for developing and
maintaining software and to evolve of software engineering and management excellence



Capability Maturity Model (CMM)
CMM General Description
What is CMM?
Snapshot in business evolution based on evaluation of product or service.
Framework for process improvement
Emphasizes standardization of business process to yield a consistent product or service
Identifies areas of relative strength and weakness of the process through the quality of the product
or service
Qualities of change that improve a business process
Basis for a Gap Analysis

What CMM is not?
Not a cookbook recipe
Not bound by specific technology
No single answer to achieve process improvement

Evolution of CMM
The software Engineering Institute (SEI) developed an initial version of a maturity model and
maturity questionnaire at the request of the government with advice from the experts from the
software industry

Objectives of CMM
Objective has been to provide a model that
1. Is based on actual practices
2. Reflects the best of the state of the practice
3. Reflects the needs of individuals performing software process improvement, software process
assessments or software capability evaluations

4. Is documented
5. Is publicly available
Additional knowledge from practice has enriched the CMM concept and CMM version 1.1 is created



TQM and CMM
Organised strategy for improvement is essential for the product success
The structure of CMM is based on the quality principles of Walter Shewart, Deming and Juran to
establish a project management and engineering foundation for qualitative control of the software
process, which is the basis for continuous improvement process (CIP)

Capability Maturity Model (CMM)
Functional Background
CMM is divided into 5 Levels of Process Maturity
CMM focuses on systematic process improvement by:
Developing tools to measure maturity (i.e. maturity questionnaire)

Focus on the overall model, not catering to specific questions
Questionnaire identifies both the strengths and weaknesses
Improvement in the process yields an improved product (goods and/or services)



Module VI
Quality Awards : Introduction, Need for Quality Awards, Deming Prize and its features,
MBNQA and its features, European quality award and its features, Golden peacock award, TQM
models.
OBJECTIVE
To realize the need and importance of Quality Awards:
Quality Awards : Introduction,
Need for Quality Awards,
Deming Prize and its features,
MBNQA and its features,
European quality award and its features,
Golden peacock award,
TQM models.
INTRODUCTION
The award promotes awareness of performance excellence as an increasingly important element
in competitiveness. It also promotes the sharing of successful performance strategies and the
benefits derived from using these strategies. To receive a Baldrige Award, an organization must
have a role-model organizational management system that ensures continuous improvement in
delivering products and/or services, demonstrates efficient and effective operations, and provides
a way of engaging and responding to customers and other stakeholders. The award is not given
for specific products or services.
In the early and mid-1980s, many U.S. industry and government leaders saw that a renewed
emphasis on quality was necessary for doing business in an ever-expanding and more
competitive world market. But many U.S. businesses either did not believe quality mattered for
them or did not know where to begin.
The Malcolm Baldrige National Quality Improvement Act of 1987, signed into law on August
20, 1987, was developed through the actions of the National Productivity Advisory Committee,
chaired by Jack Grayson. The nonprofit research organization APQC, founded by Grayson,
organized the first White House Conference on Productivity, spearheading the creation of the
Malcolm Baldrige National Quality Award in 1987. The Baldrige Award was envisioned as a
standard of excellence that would help U.S. organizations achieve world-class quality.


In the late summer and fall of 1987, Dr. Curt Reimann, the first director of the Malcolm Baldrige
National Quality Program, and his staff at the National Institute of Standards and Technology
(NIST) developed an award implementation framework, including an evaluation scheme, and
advanced proposals for what is now the Baldrige Award. In its first three years, the Baldrige
Award was jointly administered by APQC and the American Society for Quality, which
continues to assist in administering the award program under contract to NIST.
NEED FOR QUALITY AWARDS
Do it to drive excellence, not to win the award.
Many organizations have gotten off track by making the award the ultimate goal. This
can result in gaming the system to look better than you actually are. In the meantime, the
organizations lose sight of their true purpose of providing value adding products and
services to customers.
Use your company language, not the award language.
The terms and phrases used in award criteria may be good for a generic application, but
they may not be the best fit in your company. Company taxonomy is part of company
culture. For example, if you refer to employees as associates, then you do not need to
change just because the application asks for employee related information. Integrate the
concepts into the way you do things, using words that make sense for your organization.
Use a long term focus.
Once and done is almost always a wasted effort. It is not enough to reach award winning
levels of quality leadership. The real goal is to sustain quality leadership performance.
Most quality award winning organizations will self assess and apply multiple times over
several years. They recognize that achieving and sustaining quality leadership is a
journey.
Use the feedback.
It is always amazing when an organization goes all the way through the process of
compiling and submitting an application and then ignores the feedback they receive from
the evaluation process. This is the gold nugget. This can be some of the best advice an
organization will ever receive from a team of industry leading experts. Smart


organizations use this feedback as a major component of strategic and business planning
to identify areas of focus.
Focus on process.
The results will follow. Most quality award criteria seek information related to business
processes and business results. The key to success is to understand how processes drive
results and focus on improving the processes so better results can be attained.
Involve leaders.
Leadership for Quality cannot be delegated. It must be led from the top. Accordingly,
organization leaders need to understand the awards process and criteria. Leaders need to
use quality award assessment feedback in deciding where to put focus and resources.
Develop internal expertise.
The awards cycle will provide valuable feedback to the organization, but it can take a
long time to get the information. Organizations which develop internal expertise can
strengthen their own assessment processes. This enables the organization to get regular
and timely information for improving processes and performance.
DEMING PRIZE AND ITS FEATURES
The Deming prize, established in December 1950 in honor of W. Edwards Deming, was
originally designed to reward Japanese companies for major advances in quality improvement.
Over the years it has grown, under the guidance of Japanese Union of Scientists and Engineers
(JUSE) to where it is now also available to non-Japanese companies, albeit usually operating in
Japan, and also to individuals recognized as having made major contributions to the
advancement of quality. The awards ceremony is broadcast every year in Japan on national
television. Two categories of awards are made annually, the Deming Prize for Individuals and
the Deming Application Prize.
Tata Steel is the first integrated steel company in the world, outside of Japan, to win the Deming
Application Prize.

The steel giant won the 2008 prize for achieving distinctive performance improvements through
the application of total quality management (TQM). Avneesh Gupta, chief (TQM) at Tata Steel
spoke to Gayatri Kamath about the journey of enlightenment and the sense of responsibility that


comes with winning this coveted prize awarded by the Japanese Union of Scientists and
Engineers (JUSE).

FEATURES
The Deming Application Prize is considered to be the highest award in the area of TQM. Total
quality stands for not just quality of products and services, but also the processes and activities
that are needed to achieve quality. In the world of quality awards, this prize is like a gold
standard.

The prize was started in 1951 in memory of Edward Deming who was instrumental in teaching
the concepts of quality to the Japanese. The Deming Application Prize tests the application of
TQM within a company. The criteria include:
Objectives and strategies of the company and whether they are challenging and customer-
focused
How TQM has been applied to achieve these objectives, and the thoroughness,
consistency and depth of its application across the organisation
The outstanding effects achieved as a result of the application of TQM
The focus here is on application what sort of systematic methods and activities have been
applied to achieve our objectives and strategies and what is the effect of this. The concept is that
we need to demonstrate our ability to use TQM to achieve our desired goals rather than our
capability (potential).

Firstly, outside Japan, no steel company has won this award. We are the first. Secondly, in the
past many years smaller sized companies have won this prize. Its been almost 20 years since a
company the size of Tata Steel has won the award an indication of the effort that is necessary.
Thus the impact is significant and lasting.

Tata Steel has been practising TQM since the late 1980s which was when the company initiated
several quality activities quality circles, ISO certification, quality improvements using Juran
methods, etc. After winning the JRD QV Award in 2000, the question we faced was how to
achieve the next quantum jump in performance and improvements. By going through the
Deming process, we discovered the deeper meaning of TQM.

Tata Steel has been preparing for this prize for about four years. In 2005, we conducted a TQM
diagnosis along with the JUSE team; that gave us the status of our TQM implementation and


helped us uncover a lot of areas that required improvement in both our processes and culture.
The TQM diagnosis gave us deeper understanding and clarity on our approach to quality: what
areas should be addressed, who should get involved in what activities, etc. We specifically
looked at:
Strategic aspects or policy management: relooking at the balanced score card, looking at
areas needed to change the business, etc
Daily management: managing the day-to-day operations, ensuring that they are stable,
looking for incremental improvements, etc
People involvement: involving people in thinking about improvement activities such as
quality circles, suggestion management, knowledge manthan, etc.
The short term impact is that this has galvanised the organisation. Our people had rallied behind
the goal of winning the Deming prize and a lot of improvement activities had been further
refined.

The long term impact is that we have been able to push forward in our excellence journey. More
importantly we have put in place some fundamental approaches in the organisation which will
help us to leverage them for the performance improvement of Tata Steel. We have established
that TQM is necessary for achieving business goals. Our revised half-yearly (H2) plan has
identified enablers that address savings and benefits for the company; many of these methods use
TQM approaches for instance, how to optimise use of consumables such as lime, zinc, etc, how
to reduce turnaround or shut down times through critical chain project management, etc.
Basically, what has changed is our approach, how we apply TQM to attain our business targets.
We are looking at more than double the improvements we have achieved in the past years.

It started with the top leadership and the TQM team, but later on nearly everyone in the
organisation was a part of it. We were able to engage many of the front line or operating units in
this; there were champions in each of the departments.

The most fundamental challenge was to create a mindset that looks at improvement activities as
essential for achieving targets and goals. This is where the examiners focus. The biggest


challenges lay in creating this understanding across the organisation, dealing with 35,000
employees, in explicitly stating and documenting improvement targets and how to go about
achieving these in a systematic manner, in standardising approaches and creating alignment to
profits and goals, and so on. Equally challenging was to bring quality to the forefront, which was
addressed by formulating customer focused objectives and strategies in the various divisions and
departments.

The other problem was that for Tata Steel there were six examination units the corporate unit
and the five major divisions (raw materials, coke, sinter and iron, flat products, long products
and shared services). Each unit had two applications one for the overall unit, and one
representing each of the departments of the division. We had to create guidelines and reference
manuals to have uniformity and alignment.

The difference is in the focus rather than the content. The Deming award criteria looks for
application which runs vertically cutting across processes/ items, rather than looking at processes
horizontally the way TBEM criteria are applied. They test the application rather than only the
approach. Deming looks at applying the basic principle of TQM the Plan-Do-Check-Act
method.

The other key difference is the rigour of the examination process. It looks for application both in
business units and the corporate functions. For us there were six examination units covering 52
departments in all. Each unit was examined for two days, so there were 12 days of examination
which spread for about a month (4th of August to the 5th of September). There were 26
examiners, each having a lot of experience and expertise both in theory and application in their
field.

As far as we know no company applies for this award every year. It is a very intense and time
consuming effort both for the company and the examination body. Usually organisations
continue to reap benefits out of one such effort for many years and put some internal diagnosis
(assessment) system in place. Tata Steel will also not apply again for the Deming award in 2009.


There is a next level called the Japan Quality Medal. You become eligible three years after
winning the Deming prize. We will decide in due course.

Malcolm Baldrige National Quality Award (MBNQA)
o Helped to improve quality in U.S. companies
o To Recognize achievements of excellent firms and provide examples to others
o To Establish criteria for evaluating quality efforts
o To Provide guidance for other companies

Criteria for Performance Excellence
Leadership
Strategic Planning


Customer and Market Focus
Information and Analysis
Human Resource Focus
Process Management
Business Results

The Baldrige Framework A Systems Perspective



Baldrige Award Evaluation Process

The Baldrige Award Scoring System
Three evaluation dimensions - Approach, Deployment, and Results
Scoring is linked to the importance to the applicants business

Self Assessment and the Baldrige National Quality Program
A primary goal of the Program is to encourage many organizations to improve on their own by
equipping them with a standard template for measuring their performance and their progress
toward performance excellence.



EUROPEAN QUALITY AWARD MODEL (EQA)

Chapter 1. LEADERSHIP
1-1 How does the Management team lead the implementation of Quality Approach within the
Organization ?
1-2 How does the Management team show the examples through internal and external actions ?
1-3 How does the Management Team encourage effort and success as regard to quality, with
individuals and teams ?
1-4 How does the Management team interact with customers, partners and representatives of
society ?
Chapter 2. - STRATEGY AND QUALITY OBJECTIVES
2-1 How does the Organizations strategy integrate its Policy on quality ?
2-2 How is the quality policy translated into measurable goals throughout the entire Organisation
?
2-3 How does the Organization improve its strategy and action plans ?
2-4 How is the Policy and strategy on quality communicated and deployed through a framework of
key processes ?



Chapter 3. PEOPLE MANAGEMENT
3-1 How are people informed on the Organizations strategy, quality policy and results ?
3-2 How are people trained to embrace the quality processes and to achieve quality objectives ?
3-3 How does the Organization encourage individual commitment into the implementation of
quality ?
3-4 How does people propose improvements to quality ?
Chaper 4. RESOURCES MANAGEMENT
4-1 How are financial resources managed ?
4-2 How are informations resources managed ?
4-3 How are Partners associated with the Quality approach?
4-4 How are all the other resources managed ?
Chapter 5. PROCESSES
5-1 How are key processes identified, which one are they ?
5-2 How does the Organization listen to the Customers ?
5-3 How are all the customers needs integrated ?
5-4 How does the Organization manage innovation ?
5-5 How are competitors performances or similar organizations results known ?
5-6 How is products and/or Services Quality controled ?
5-7 How are indicators selected and used to improve quality ?
5-8 How are quality improvement actions managed ?
Chapter 6. CUSTOMER SATISFACTION
6-1 What are the results of external measurements of customers perception of products and/or
services and relationship ?
6-2 What are the results of internal measurements to evaluate customer satisfaction ?
Chapter 7. PEOPLE SATISFACTION
7-1 What are the results of direct measurements of people satisfaction ?
7-2 What are the results of indirect measurements to evaluate people satisfaction and
involvement ?
Chapter 8. INTEGRATION INTO THE COMMUNITY


8-1 What actions and results show that the Organization provides answers to local Communitys
needs and expectations ?
8-2 What are the results of the societys perception of the organization obtained from surveys,
press articles, public meetings, public and governmental authorities ?
Chapter 9. OPERATIONAL RESULTS
9-1 What are the results in terms of global performance ?
9-2 What are the results coming from internal management indicators ?
GOLDEN PEACOCK AWARD
Golden Peacock Awards, instituted by the Institute of Directors, India in 1991, are now regarded
as a benchmark of Corporate Excellence worldwide.
Today Golden Peacock Awards Secretariat receives over 1,000 entries per year for various
awards, from over 25 countries worldwide. The achievement of the Golden Peacock Award is
the most powerful way to build your brand. The Award winners are eligible to use the Golden
Peacock Awards logo on all printed and promotional materials for next one year, which
evidences to all its customers and suppliers the highest accolade acclaimed by the company. No
business award today receives the kind of recognition and adulation among peers that the Golden
Peacock does. They provide not only worldwide recognition and prestige, but a competitive
advantage in driving business in this tumultuous world .All sector of our business both in
manufacturing and service, whether Public, Private ,Government , NGOs self accounting
Institution , Business Units , are eligible to apply for the award . Individual leadership awards are
determined through nomination only, based on complete career profile and achievements.
Justice P.N. Bhagwati, former Chief Justice of India and acting Chairman, UN Human Rights
Committee, is the Chairman of the Golden Peacock Awards Committee.
The Award applications are assessed at 3 three levels by independent assessors and finally by a
grand Jury. The Global Awards are finalized by a Jury headed by Dr. Ola Ullsten, former Prime
Minister of Sweden.


All institutions whether public, private, non-profit, government, business, manufacturing and
service sector are eligible to apply. Leadership Awards are determined through nomination. They
provide not only worldwide recognition and prestige but also a competitive advantage in
driving business in this tumultuous world under Golden Peacock Award models.
The Awards are bestowed annually and are designed to encourage total improvement in each
sector of our business.
The only award, which has a meticulously defined and transparent selection criteria and
is determined by a highly elaborate and independent assessment process.
The award builds your BRAND EQUITY and worldwide recognition.
Award winners are eligible to use the Golden Peacock Awards LOGO on all
promotional literatures.
Preparation for award application helps to inspire and align the entire workforce and
rapidly accelerates the PACE OF SYSTEM IMPROVEMENT .
Even, if you dont win the award, the PREPARATION & FEEDBACK helps your
strategic learning process to put you, on your way to achieving world-class status.

The Awards Secretariat has constituted an Expert Evaluation Committee comprising from
various sectors are invited to examine the applications. Each of the applications is reviewed
independently by two assessors those satisfies the basic review requirements and are short listed
for Awards. The applications are assessed on an exhaustive set of parameters as mentioned in the
guidelines for a total score card of 1000 marks. Cut-off applied on each application is 80 percent.
Entries occupying top positions are recommended for consideration of the Jury.
In some cases the short listed finalist companies by the Assessors for Award are also asked to
make a 10 min presentation followed by questions and answers for 5 min during the Jury
meeting for the final consideration of Grand Jury.
The phenomenal interest that Companies have shown in competing for these awards and the
quality of entries is evidence of their commitment to achieve world-class status. Golden
Peacock Awards have given boost to the Industry worldwide.


TQM MODELS
The roots of Total Quality Management (TQM) go back to the teachings of Drucker, Juran,
Deming, Ishikawa, Crosby, Feigenbaum and countless other people that have studied, practiced,
and tried to refine the process of organizational management. TQM is a collection of principles,
techniques, processes, and best practices that over time have been proven effective. Most all
world-class organizations exhibit the majority of behaviors that are typically identified with
TQM.
No two organizations have the same TQM implementation. There is no recipe for organization
success, however, there are a number of great TQM models that organizations can use. These
include the Deming Application Prize, the Malcolm Baldrige Criteria for Performance
Excellence, the European Foundation for Quality Management, and the ISO quality management


standards. Any organization that wants to improve its performance would be well served by
selecting one of these models and conducting a self-assessment

The simplest
model of TQM is shown in this diagram. The model begins with understanding customer needs.
TQM organizations have processes that continuously collect, analyze, and act on customer
information. Activities are often extended to understanding competitor's customers. Developing
an intimate understanding of customer needs allows TQM organizations to predict future
customer behavior.
TQM organizations integrate customer knowledge with other information and use the planning
process to orchestrate action throughout the organization to manage day to day activities and
achieve future goals. Plans are reviewed at periodic intervals and adjusted as necessary. The
planning process is the glue that holds together all TQM activity.


TQM organizations understand that customers will only be satisfied if they consistently receive
products and services that meet their needs, are delivered when expected, and are priced for
value. TQM organizations use the techniques of process management to develop cost-controlled
processes that are stable and capable of meeting customer expectations.
TQM organizations also understand that exceptional performance today may be unacceptable
performance in the future so they use the concepts of process improvement to achieve both
breakthrough gains and incremental continuous improvement. Process improvement is even
applied to the TQM system itself
The final element of the TQM model is total participation. TQM organizations understand that
all work is performed through people. This begins with leadership. In TQM organizations, top
management takes personal responsibility for implementing, nurturing, and refining all TQM
activities. They make sure people are properly trained, capable, and actively participate in
achieving organizational success. Management and employees work together to create an
empowered environment where people are valued. All of the TQM model's elements work
together to achieve results.



Module 7
Quality Control tools: Introduction, 7 tools of quality control (Old & New), Poka-yoke, Quality
Function Deployment.
OBJECTIVE
To understand the meaning & importance of Quality Control tools: Introduction,
To appreciate the applications of 7 tools of quality control (Old & New),
To recognize the practices of Poka-yoke and its benefits,
To know about Quality Function Deployment(QFD)
INTRODUCTION
The tools and techniques along with management practices and the organisational infrastructure are
fundamental components of TQM. Many of these are associated with the practice of process
management.
In TQM design tools ,managers have a set of procedures and techniques that can help them to
design either a product or a process to ensure consistent quality
TQM practitioners use design tools to prevent quality problems by eliminating variance in
products/processes and to enhance customer satisfaction by meeting customers requirements

TQM involves other areas like

Marketing: must identify exactly what the targeted customers wants and are willing to pay for
Accounting : contributes product costing support
Purchasing: must identify outside resources that might enhance the product or process
development activities
Engineering and R&D: must identify what is technically possible
Organisational design: must provide the type of learning organisation to effectively utilise TQM
design tools

Various techniques or tools for improving design process are

Statistical experimentation or experimental design or design of experiments (DoE)
Taguchis methods/Taguchi loss function
Quality function Deployment (QFD) and Poka yoke or fail safing or fool proofing
Statistical experimentation


A products performance is affected by manufacturing imperfections, environmental factors and
human variations in operating the product.
A high quality product performs consistently under all operating conditions.
Good design identifies the settings of products or process parameters that minimise the
sensitivity of design or sources of variation in use.
Products that are not sensitive to external sources of variation are called robust
Ex: a television whose picture quality varies with environmental conditions such as room
temperature and humidity is not a robust product. A television must function in different room
temperatures to be called as a robust product
A Japanese engineer,Dr Genichi Taguchi, proposed the use of statistically planned experiments
for parameter design. Experimental design is one of the most powerful techniques for improving
quality and increasing productivity.
Through experiments changes are intentionally introduced into the process or system in order to
observe their effects on the performance of the products
Any experiment that has the flexibility to make desired changes in the input variables of a
process to observe response is known as experimental design.
Goals of a designed experiment are to
Determine the variables and their magnitude that influence the response (output)
Determine the levels for these variables
Determine how to manipulate these variables to control the response
According to Taguchi, it is not sufficient to control only process, inspect output, identify and
remove defects, it also necessary to have a quality design
This approach is called as design of experiments (DoE)



7 TOOLS OF QUALITY CONTROL (OLD & NEW), POKA-YOKE

Elementary Statistical Methods
Dr K. Ishikawa considers them as seven indispensable tools to be used by everyone i.e. Company
Managing Directors, Company Directors, Middle Management, Foreman and line workers.

It can be used anywhere. According to him 95% of all the problems in a company can be solved
by these tools. In Japan these tools are used effectively by top management to line workers.
Along with these tools, facilitators and workers must also be trained in the following basic
concepts for efficient functioning of Quality Circles.
a. The concept of quality.
b. Principles and implementation concerning management and improvement. '
c. Statistical way of thinking.
As Dr K Ishikawa says
It was due to the use of this that the quality level has risen, reliability has risen, and cost has
fallen. The key has been the dogged use of process analysis and quality analysis without fanfare
for a long period of time.
This has brought about improvement in technology. Some contend that engineering technology
enhances technology and management technology maintains it. I do not subscribe to that claim. I
cannot see any difference between engineering technology and management technology. The so-
called control technique is part of proper technique.
One must utilize all the technology at his disposal to strive towards advancing quality and
efficiency. After the Second World War, Japan imported many new technologies from the West.
Nowadays, Japan can export her technologies to the West as well. This is in large measure a
result of the introduction of statistical quality control and the use of statistical analysis, process
analysis and quality analysis.
Elementary Statistical Methods- (7 QC-tools)

1. Check-sheet (for data collection)
2. Graph and Control Chart
3. Stratification



4. Pareto Chart
5. Cause and Effect Diagram
6. Histogram
7. Scatter Diagram

Check sheet

Data collection: To understand the magnitude of the problem and understand the problem. It
is the foundation for statistical analysis.


2. Graphs : Presentation of large amount of data in a cohesive manner in the pictorial form to enable
better understanding of the data and the problem and also to comprehend the trend at a glance.

Control Charts :For maintaining running control on a process. It is a tool for on-line quality control.

3 Stratification: To segregate data according to contributing sources (suppliers, machines, operators
etc.).



4. Pareto Chart: For identification/selection of major problem or area for improvement or control, to
differentiate between vital and trivial problems.

5 Cause & Effect Diagram: To map out all probable causes and relate the logical linking of causes
to the problem to help narrow down to the cause or causes.



6. Histogram : For study of process variation and assess process capability. This is an off-line
quality control method.

7. Scatter Diagram : For examining relationship between two variables, nature and strength of
relationship between process factors and product quality. In a way it is also a cause and effect
approach between two variables.



7 Advanced (new) Quality Control Tools
1. AFFINITY DIAGRAM
2. INTERRELATIONSHIP DIAGRAPH
3. MATRIX DIAGRAM
4. TREE DIAGRAM
5. ARROW DIAGRAM
6. PDPC(PROJECT DECISION PROGRAM CHART)
7. MATRIX DATA ANALYSIS

Process Capability

Capability is a measure of the ability of a process to meet specified requirements, usually
expressed as an index.
Process capability measurement can be made using the data that is obtained for the control chart.
The capability assessment compares the process spread with the specified requirements.
The process chart does not make any reference to the specified requirements.

Process capability is determined by a comparison of process performance versus specification.
Process capability:
Depends on specification limits;
Is assessed with respect to a single characteristic;
Depends on process spread (i.e. the standard deviation);
Depends on the process average;
Is determined by use of control charts;
Can be described by capability indices.



Process Capability Types
re are two types of process capability study:

-going Process Capability Study.
process.
-going Process Capability Study uses data from a longer time period to include all common
causes of process variation.

Potential and Capability
Process Potential is an estimate of the ability of a process to generate consistently a specific
characteristic, relative to specification.
Process Potential:
Measures the best that the process can do;
Depends on the process variation and spread;
The spread is taken to be 6s;


Depends on the width of the specification;
Compares the spread of the process with the width of the specification.

Process Capability measures how well a process is generating a specific characteristic with respect to
specification limits.
Process Capability:
Assesses the process spread with respect to the width of the specification;
Assesses the process average with respect to the specification;
Depends upon process location and spread.

Capability Indices

-going Process Potential
-going Process Capability
Poka-yoke
The term poka-yoke was applied by Shigeo Shingo in the 1960s to industrial processes designed
to prevent human errors. Shingo redesigned a process in which factory workers, while
assembling a small switch, would often forget to insert the required spring under one of the
switch buttons. In the redesigned process, the worker would perform the task in two steps, first
preparing the two required springs and placing them in a placeholder, then inserting the springs
from the placeholder into the switch. When a spring remained in the placeholder, the workers
knew that they had forgotten to insert it and could correct the mistake effortlessly.
Shingo distinguished between the concepts of inevitable human mistakes and defects in the
production. Defects occur when the mistakes are allowed to reach the customer. The aim of
poka-yoke is to design the process so that mistakes can be detected and corrected immediately,
eliminating defects at the source.
Poka-yoke can be implemented at any step of a manufacturing process where something can go
wrong or an error can be made. For example, a jig that holds pieces for processing might be
modified to only allow pieces to be held in the correct orientation, or a digital counter might


track the number of spot welds on each piece to ensure that the worker executes the correct
number of welds.
Shigeo Shingo recognized three types of poka-yoke for detecting and preventing errors in a mass
production system:
1. The contact method identifies product defects by testing the product's shape, size, color, or
other physical attributes.
2. The fixed-value (or constant number) method alerts the operator if a certain number of
movements are not made.
3. The motion-step (or sequence) method determines whether the prescribed steps of the process
have been followed.
Either the operator is alerted when a mistake is about to be made, or the poka-yoke device
actually prevents the mistake from being made. In Shingo's lexicon, the former implementation
would be called a warning poka-yoke, while the latter would be referred to as a control poka-
yoke.
Shingo argued that errors are inevitable in any manufacturing process, but that if appropriate
poka-yokes are implemented, then mistakes can be caught quickly and prevented from resulting
in defects. By eliminating defects at the source, the cost of mistakes within a company is reduced
poke yoke is a Japanese term that means "mistake-proofing". A poka-yoke is any mechanism in a
lean manufacturing process that helps an equipment operator avoid (yokeru) mistakes (poka). Its
purpose is to eliminate product defects by preventing, correcting, or drawing attention to human
errors as they occur.The concept was formalised, and the term adopted, by Shigeo Shingo as part
of the Toyota Production System. It was originally described as baka-yoke, but as this means
"fool-proofing" (or "idiot-proofing") the name was changed to the milder poka-yoke.

Poka-yoke example: Ethernet cable plug is designed to be plugged in in only one direction.
More broadly, the term can refer to any behavior-shaping constraint designed into a process to
prevent incorrect operation by the user. Similarly, a constraint that is part of the product (or


service) design is considered Design for Manufacturability or Design for X. A modern Poka-
Yoke application is when a driver must press on the brake pedal (a process step, therefore a
poka-yoke)) prior to starting an automobile. The interlock serves to prevent unintended
movement of the car. An additional poka-yoke would be the switch in the car's gear shift that
requires the car to be in Park or Neutral before the car can be started. These serve as behavior-
shaping constraints as the sequence of "car in park (or neutral)" and/or "Foot on brake" must be
performed before the car is allowed to start. Over time, the driver's behavior is conformed with
the requirements by repetition and hab

QUALITY FUNCTION DEPLOYMENT.

Products are- designed by cross-functional teams, translating customer requirements into detailed
technical product specifications can be very difficult

Japanese developed an approach called Quality function deployment (QFD) to meet customer
requirements throughout the design process and also in the design of production systems
QFD is a method by which cross-sectional teams translate customer requirements into
appropriate design requirements at each stage of the product development process
A Means of integrating the design process
Voice of the Customer
Priorities of Marketing
Product design knowledge of the Engineer
(Production Planning and Design)

House of Quality



The four Houses of Quality



Building a House of Quality

ibutes

Using the House of Quality

attribute



o Parts characteristics
o Key process operations
o Production requirements

QFD- Disadvantages

o Prioritize on important attributes
o Analyzes independent subsystems independently

o Consider segmenting market
o Customers stated preferences and actions differ
o Use revealed preference techniques if you suspect a problem
o QFD is messy
o Not QFD, but rather the interaction between diverse groups is cause
o Stick with it, the results are worthwhile



Module 8
Introduction to Six Sigma Historical developments, statistical framework for six sigma, DPU and
DPMO concepts, DMAIC methodology, Training for Six Sigma, Benefits of Six Sigma, Six
sigma and TQM.
OBJECTIVE
To understand the meaning, applications and Importance of:
Introduction to Six Sigma
Historical developments, statistical framework for six sigma,
DPU and DPMO concepts, DMAIC methodology,
Training for Six Sigma,
Benefits of Six Sigma,
Six sigma and TQM.

INTRODUCTION TO SIX SIGMA HISTORICAL DEVELOPMENTS
Six Sigma at many organizations simply means a measure of quality that strives for near
perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating
defects (driving toward six standard deviations between the mean and the nearest specification
limit) in any process from manufacturing to transactional and from product to service.
The statistical representation of Six Sigma describes quantitatively how a process is
performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million
opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A
Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can easily
be calculated using a Six Sigma calculator.
The fundamental objective of the Six Sigma methodology is the implementation of a
measurement-based strategy that focuses on process improvement and variation reduction
through the application of Six Sigma improvement projects. This is accomplished through the
use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC
process (define, measure, analyze, improve, control) is an improvement system for existing
processes falling below specification and looking for incremental improvement. The Six Sigma
DMADV process (define, measure, analyze, design, verify) is an improvement system used to
develop new processes or products at Six Sigma quality levels. It can also be employed if a
current process requires more than just incremental improvement. Both Six Sigma processes are
executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma
Master Black Belts.


According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per
project and can complete four to 6 projects per year. (Given that the average Black Belt salary
is $80,000 in the United States, that is a fantastic return on investment.) General Electric, one of
the most successful companies implementing Six Sigma, has estimated benefits on the order of
$10 billion during the first five years of implementation. GE first began Six Sigma in 1995
after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of
companies around the world have discovered the far reaching benefits of Six Sigma.
Many frameworks exist for implementing the Six Sigma methodology. Six Sigma Consultants
all over the world have developed proprietary methodologies for implementing Six Sigma
quality, based on the similar change management philosophies and applications of tools.
STATISTICAL FRAMEWORK FOR SIX SIGMA
Six Sigma is a business strategy and a systematic methodology, use of which leads to
breakthrough in profitability through quantum gains in service quality, product performance,
productivity and customer satisfaction.Today SixSigma has been considered as a strategic
approach to achieve excellence in operations and service performance through the effective
utilization of statistical and non-statistical tools and techniques .Like other programs emerging
under the TQM umbrella,Six Sigma requires a transformational change in an organizations
culture, structure, and processes. The emergence of Six Sigma as a distinct approach to TQM
occurred in 1987 at Motorola ,Six Sigma is a disciplined approach to define, measure, analyze,
improve and control processes that result in variability and defect reduction. Six Sigma is a
business improvement strategy that seeks to find and eliminate causes of defects or mistakes in
business processes by focusing on outputs that are of critical importance to customers. It is a
powerful approach to process improvement, reduced costsand increased business profitability
and revenue growth. Six Sigma originated at Motorola in the early 1980s in response to a
challenge to achieve ten-fold reduction in product failure levels in five years. Six Sigma has both
management and technical components. The focus of management component is to select the
right people for Six Sigma projects, select the right process metrics, provide resources for Six
Sigma training, provide clear direction and guidance with regard to project selection, etc. The
focus of technical component is on process improvement by reducing variation, creating data
which explains process variation, using statistical tools and techniques for problem solving, etc.


In statistical terms, Six Sigma means 3.4 defects per million opportunities (DPMO), where sigma
is a term used to represent the variation around the average of a process. Today, Six Sigma is
exploited by many organisations such as GE, Honeywell, Sony, Caterpillar, J P Morgan,
American Express, Common Wealth Health Corporation, Lloyds TSB, City Bank, Jaguar,
Kodak, Ford and Starwood Hotel Group . These contrast results make Six Sigma implementation
a complex and central process, where the CSFs in its implementation must be recognised.
Although different resources are now available on Six Sigma subjects, it seems there are only a
few, in which CSFs are addressed. In the following, the efforts made in the literature are
reviewed in case of CSFs for successful implementation of Six Sigma projects; then, a case study
is presented in which a set of CSFs are analyzed in major car maker companies in Iran..
DPU AND DPMO CONCEPTS
Defects Per Unit - DPU
Total Number of Defects
DPU = ------------------------
Total number of Product Units

The probability of getting 'r' defects in a sample having a given dpu rate can be predicted with
the Poisson Distribution.
Total Opportunities - TO
TO = Total number of Product Units x Opportunities
Defects Per Opportunity - DPO
Total Number of Defects
DPO = ------------------------
Total Opportunity
Defects Per Million Opportunities - DPMO
DPMO = DPO x 1,000,000
Defects Per Million Opportunities or DPMO can be then converted to sigma values using Yield
to Sigma Conversion Table given in Six Sigma - Measure Phase.



DMAIC METHODOLOGY



TRAINING FOR SIX SIGMA
Six Sigma Business Improvement training, Lean, FMEA, SPC
Six Sigma gives your company a global competitive edge and with a certified quality framework
in place, you can be confident in
Cutting costs,
Improving efficiency and
Meeting your business targets
Six Sigma training courses
Lean Six Sigma Transactional Black Belt
Lean Six Sigma Transactional Green Belt
Six Sigma Green Belt Certificate
Six Sigma Yellow Belt
Lean Practitioner
Failure Mode and Effect Analysis
Statistical Process Control

BENEFITS OF SIX SIGMA, LIMITATIONS ,.

Cost reduction
Productivity improvement
Market share growth
Cycle time reduction
Defect reduction
Culture change
Product / service development



SIX SIGMA AND TQM

Six Sigma employs some of the same tried-and-true tools and techniques of TQM. Both
Six Sigma and TQM emphasize the importance of top-down support and leadership. Both
approaches make it clear that continuous improvement of quality is critical to long-term business
success. The PDSA cycle used in TQM is not fundamentally different than the Six Sigma
DMAIC cycle.
But there are differences. Critical differences. And these differences explain why the
popularity of TQM has waned, while Six Sigmas popularity continues to grow.
The difference, in a word, is management. TQM provided only very broad guidelines for
management to follow. Guidelines so abstract and general that only the most gifted leaders were
able to knit together a successful deployment strategy for TQM. Business magazines and
newspapers reported widespread failure of TQM efforts. True, solid research showed that
organizations which succeeded in successfully implementing TQM reaped substantial rewards.
But the low probability of success deterred many organizations from trying TQM. Instead, many
organizations opted for ISO 9000. ISO 9000 promises not world-class performance levels, but
standard performance. But it provides clear criteria and a guarantee that meeting these criteria
will result in recognition. In contrast, TQM offered a mushy set of philosophical guidelines and
no way to prove that one had accomplished their quality goals.


Unlike TQM, Six Sigma was not developed by techies who only dabbled in management.
Six Sigma was created by some of Americas most gifted CEOs. People like Motorolas Bob
Galvin, AlliedSignals Larry Bossidy, and GEs Jack Welch. These people had a single goal in
mind: to make their businesses as successful as possible. Once they were convinced that the tools
and techniques of the quality profession could help them do this, they developed a framework to
make it happen. Six Sigma.
Speaking as a member of the quality profession, we knew that we had a winning set of
tools that could solve quality problems in manufacturing. Total quality control, invented in 1950,
showed that product quality could be improved by expanding quality efforts into upstream areas
such as engineering and purchasing. We even had limited success in using our tools to improve
quality in administrative areas by reducing errors in service transactions. But despite these
successes we suffered from a number of shortcomings. For example:
We focused on quality and ignored other critical business issues. Quality trumped
everything else. Of course, this made no business sense and often lead to organizations
that failed despite improved quality.
We created a quality specialty that suffered from all of the same suboptimization
problems as other functions within the organization. Despite all of our talk about a
systems perspective, when push came to shove we fought for our point of view (and our
budget) just like everyone else. In the typical organization this resulted in other
departments considering quality to be the turf of the quality department. Thus, they
backed off of-or never started-efforts of their own.
We emphasized minimum acceptance requirements and standards, rather than striving for
ever increasing levels of performance.
We never developed an infrastructure for freeing up resources to improve business
processes.
We developed a career path in quality. Quality professionals tended to lack subject matter
expertise in other areas of the company. This division of labor, combined with
functionally specialized organization, made it difficult to improve quality beyond a
certain level. (I estimate that this type of organization tops out at about 3.5 sigma.)
The CEOs were able to see what the problems were, and to create an approach that fixed
them. Six Sigma addresses all of these issues:
Six Sigma extends the use of the improvement tools to cost, cycle time, and other
business issues.
Six Sigma discards the majority of the quality toolkit. It keeps a subset of tools that range
from the basic to the advanced. Six Sigma discards esoteric statistical tools and
completely ignores such staples of the quality professional as ISO 9000 and the Malcolm
Baldrige criteria. Training focuses on using the tools to achieve tangible business results,
not on theory.
Six Sigma integrates the goals of the organization as a whole into the improvement effort.
Sure, quality is good. But not independent of other business goals. Six Sigma creates top-
level oversight to assure that the interests of the entire organization are considered.


Six Sigma strives for world-class performance. The Six Sigma standard is 3.4 PPM
failures per million opportunities. It goes beyond looking at errors. The best of the Six
Sigma firms try to meet or exceed their customers expectations 999,996.6 times out of
every million encounters.
Six Sigma creates an infrastructure of change agents who are not employed in the quality
department. These people work full and part-time on projects in their areas or in other
areas. Six Sigma Black Belts do not make careers in Six Sigma. Instead, they focus on
Six Sigma for two years and then continue their careers elsewhere. Green Belts work on
Six Sigma projects while holding down other jobs. These subject matter experts are
provided with training to give the skills they need to improve processes. Six Sigma
belts are not certified unless they can demonstrate that they have effectively used the
approach to benefit customers, shareholders, and employees.
There are many other differences as well. Having worked with organizations that have
done TQM well and Six Sigma well, I can tell you that successful programs of both types look
very much alike. But Six Sigma, by clearly defining this look, makes it easier for organizations
to succeed by providing a clear roadmap to success. Dont get me wrong; Im not saying that
succeeding at Six Sigma is easy! But organizations are more willing to invest the effort if they
know that a pot of gold awaits them at the end.

TQM fundamentals for quality excellence

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TOTAL QUALITY MANAGEMENT 12MBA42

DEPT OF MBA,SJBIT Page 1

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