satya Acharya Bangalore B-School

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4.03 Total Quality Management
MODULE 1
Introduction
TQM is a management approach for an organization, centered on quality, based on the
participation of all its members and aiming at long-term success through customer satisfaction,
and benefits to all members of the organization and to society.".
Total Quality Management (TQM) is a management strategy aimed at embedding awareness of
quality in all organizational processes
Definition of quality The concept and vocabulary of quality are elusive. Different people
interpret quality differently. Few can define quality in measurable terms that can be proved
operational zed. When asked what differentiates their product or service;
The banker will answer‖ service‖
The healthcare worker will answer ―quality health care‖
The hotel employee will answer ―customer satisfaction‖
The manufacturer will simply answer ―quality product‖
Dimensions of quality,
Product- TV
Performance - Primary Characteristics, such as brightness
Features –Secondary Characteristics, Remote Control
Conformance-Meeting Specifications or Standards
Reliability –Consistency of Performance over time-fail
Durability- Useful life includes Repair.
Service-Resolution of problems, ease of repair
Response- Human relations with Customers
Aesthetics-Sensory Features
Reputation- Past performance, Company Image

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Inspection,
• Definition: It is defined as a function whose purposes are to interpret specifications,
verify conformance to these specifications and communicate the information obtained to
those responsible for making necessary corrections in the manufacturing process
• Inspection is verification of conformance of goods or services to the design specifications
• Inspection is a postmortem operation carried out after the product is manufactured
• Inspection segregates well from the bad and defective items may be either rectified or
scrapped and ensures that defective items are not sent to further stages of manufacture
Inspection does not add to the value or quality of the product. It only ensures that
substandard products are not supplied to the customer
• Quality control helps to minimize the costs of inspection and rejection
• and finished products with defects are not sold to customers
Quality control,
• Quality control refers to all those functions or activities that must be performed to fill the
company‘s quality objectives
• Inspection is one phase of quality control. It provides information required by other
phases of quality control
• Quality control includes establishment of criteria for the selection of production
equipment, tooling and personnel. It often involves statistical analysis(SQC)
• QC aims at investigating the root cause for defects identified by inspection and take
corrective action to overcome the defects for future production
• Defects may be because of due to defective design, defective machine or defective
workmanship
• QC is an effective system for integrating the quality development, quality maintenance
and quality improvement

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Quality assurance,
• It is the sum total of all lab activities that are undertaken to ensure generation of accurate
and reliable results.
• What is the Objective?
To ensure credibility of the lab and generate confidence in lab results
Quality management,
TOTAL QUALITY MANAGEMENT is a thought revolution in management where the entire
business is operated with customer orientation in all activities all the time by everyone in the
organization.
TQM is an integrated system and methodology throughout the organization that helps to design,
produce and service quality products or services which are most economical for their value, most
useful and always satisfactory to the customer
Benefits of TQM,
 Improved Quality
 Employee Participation
 Team Work
 Internal & External Customer Satisfaction
 Productivity ,Communication
 Profitability & Market Share
 Greater customer loyalty
 Market share improvement
 Higher stock prices
 Reduced service calls
 Higher prices
 Greater productivity

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Concept of Big Q
Old quality is small q New quality is Big Q
About products About organizations
Technical Strategic
For inspectors For everyone
Led by experts Led by management
High grade Appropriate grade
About control About improvement
FMEA
Failure modes and effects analysis (FMEA) is a step-by-step approach for identifying all possible
failures in a design, a manufacturing or assembly process, or a product or service.
―Failure modes‖ means the ways, or modes, in which something might fail. Failures are any
errors or defects, especially ones that affect the customer, and can be potential or actual.
―Effects analysis‖ refers to studying the consequences of those failures.
Failures are prioritized according to how serious their consequences are, how frequently they
occur and how easily they can be detected. The purpose of the FMEA is to take actions to
eliminate or reduce failures, starting with the highest-priority ones.
Failure modes and effects analysis also documents current knowledge and actions about the risks
of failures, for use in continuous improvement. FMEA is used during design to prevent failures.
Later it‘s used for control, before and during ongoing operation of the process. Ideally, FMEA
begins during the earliest conceptual stages of design and continues throughout the life of the
product or service.
Begun in the 1940s by the U.S. military, FMEA was further developed by the aerospace and
automotive industries. Several industries maintain formal FMEA standards.

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What follows is an overview and reference. Before undertaking an FMEA process, learn more
about standards and specific methods in your organization and industry through other references
and training.
MODULE 2
Deming PDCA cycle,
• Plan – Study the current system; identifying problems; testing theories of causes; and
developing solutions.
• Do – Plan is implemented on a trial basis. Data collected and documented.
• Study – Determine whether the trial plan is working correctly by evaluating the results.
• Act – Improvements are standardized and final plan is implemented.
Deming 14 point philosophy,
1. Create and publish to all employees a statement of the aims and purposes of the
company. The management must demonstrate their commitment to this statement.

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2. Learn the new philosophy.
3. Understand the purpose of inspection – to reduce the cost and improve the processes.
4. End the practice of awarding business on the basis of price tag alone.
5. Improve constantly and forever the system of production and service.
6. Institute training
7. Teach and institute leadership.
8. Drive out fear. Create an environment of innovation.
9. Optimize the team efforts towards the aims and purposes of the company.
10. Eliminate exhortations for the workforce.
11. Eliminate numerical quotas for production.
12. Remove the barriers that rob pride of workmanship.
13. Encourage learning and self-improvement.
14. Take action to accomplish the transformation
Juran quality trilogy,
1. Quality planning: Process of preparing to meet quality goals. Involves understanding
customer needs and developing product features.
2. Quality control: Process of meeting quality goals during operations. Control parameters.
Measuring the deviation and taking action.
3. Quality improvement: Process for breaking through to unprecedented levels of
performance. Identify areas of improvement and get the right people to bring about the
change.
Phil Crosby 14 point philosophy,
1 Management Commitment for Process Improvement .Top management must communicate it
has a zero defect strategy if it wants a quality improvment process. The primary action to

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accomplish this is to write and communicate a Quality Policy. In ISO 9001 all documentation
comes from the philosophy in the quality policy. This is the reason why that is so important.
2 Quality Improvement Team to Create Process Improvement
3 Measurement of Process Improvement
4 Costs of Quality and Process Improvement
5 Quality Awareness as it relates to Process Improvement
6 Corrective Actions for Process Improvement
7 Zero Defects Planning and Zero Defects Day impact on Process Improvement
8 Employee Educations Creates Process Improvement
9 Goals Setting for Process Improvement
10 Error Cause Removals in Process Improvement
11 Recognition of Process Improvement Efforts
12 Quality Councils for Process Improvement
13 Do It All Over Again for Continuous Process Improvement
Crosby’s concept quality is free,
Quality is free. It's not a gift, but it is free. What costs money are the inequality things - all the
actions that involve not doing jobs right the first time."
"Quality is not only free, it is an honest-to-everything profit maker. Every penny you don't spend
on doing things wrong, over, or instead becomes half a penny right on the bottom line. In these
days of 'who knows what is going to happen to our business tomorrow' there aren't many ways
left to make a profit improvement. If you concentrate on making quality certain, you can
probably increase your profit by an amount equal to 5 to 10 percent of your sales. That is a lot of
money for free."
In the 1980‘s, Philip Crosby came up with the Four Absolutes of Quality. We have used the Four
Absolutes as the foundation for planning sessions, key decision-making and process
improvement. I‘m not a big fan of how Dr. Crosby originally wrote his Absolutes, so I‘ll
paraphrase:

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• Conform to client‘s expectations
• Prevention, not appraisal
• Zero defects
• Know the price of non-conformance
• Our clients have expectations on how we represent them to their customers. They outline
the dos and don‘ts and we train, educate and manage to those standards. The key to a good
customer experience is following ridged guidelines, but still sound like a human, not a robot.
• My favorite is prevention, not appraisal. We say the most important person in our
organization is the CMR, because they are the one that faces our clients‘ customer. The most
influential position in our company is their supervisor who spends the majority of their time
managing our people and process to PREVENT any problems. The popular principle for this
process is ―do it right the first time.‖
• Zero defects can be a lofty goal for any organization, especially a service business like
GCS. When you‘re dealing with human behavior, perfection is not always realistic. We still want
to expect perfection and be confident everyone knows what perfection looks and feels like.
• The Price of non-conformance is a negative way of monetizing quality. I‘d rather look at
the Value of conformance. In our business, we are rewarded for results. We are penalized for
quality breeches. The rewards come in the form of more business and new programs. The
penalties come in the form of process changes, fines and ultimately lost business. Our clients
essentially have a zero tolerance stance on quality breeches. If we miss-represent their products
or show disrespect to their customers, the cost is disproportionally high. Yes, one bad apple can
spoil the bunch. One bad sale or conversational meltdown can lose an entire program. We‘ve
seen it happen to us and to our competitors.
Genichi Taguche’sconcept of customer tolerance limits,
Introduction to the Taguchi Methods
According to Taguchi‘s Quality Engineering Handbook (Wiley-Interscience, 2004), Taguchi‘s
method differs from what the United States terms ―quality engineering.‖ His method, variously
known as ―the Taguchi method,‖ ―the Taguchi paradigm‖ or ―Taguchi quality engineering‖ in
both Europe and the United States, is ―robust engineering based on the following three
procedures: (1) orthogonal array, (2) SN ratio, and (3) loss function‖
Taguchi‘s DOE methodology has inspired many DOE practitioners who use his methodology,
and much discussion and controversy regarding it. Some writers, such as Ranjit K. Roy in

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Design of Experiments Using the Taguchi Approach (Wiley-Interscience, 2001) and the
American Supplier Institute‘s James O. Wilkins Jr. report successes using Taguchi‘s DOE
methodology; others, such as George E. P. Box,Søren Bisgaard, and Dorian Shainin and Peter
Shainin, take a more critical view.
Taguchi‘s design of experiments (DOE) uses orthogonal arrays. In DOE, ―orthogonal‖ means the
columns of arrays are balanced, and ―balanced‖ means the number of levels in the columns are
equal. Balancing ensures that there are an equal number of all possible combinations of factors.
The signal-to-noise (SN) ratio is a key element of analyzing DOE conducted using Taguchi‘s
orthogonal arrays. The SN ratio is the reciprocal of the variance of the measurement error, and it
uses the logarithm of the standard deviation to separate dispersion and location effects in DOE.
This is in contrast to other methods of DOE that use the more conventional analysis of variance
(ANOVA) for analyzing experimental results.
Taguchi‘s loss function can be illustrated with the example of a low-quality automotive
component (see figure 1). The component may be produced within specification, but with a large
standard deviation that will result in some customers receiving good parts, and other customers
receiving parts that will present a problem. Those customers with a problem will need to take the
time to bring their vehicles to a dealer. The dealer will need to have a large staff of mechanics if
many vehicles are returned due to problematic components. The dealer loses money by
employing a staff dedicated to fixing problems that could have been prevented, and society as a
whole experiences a loss when many people miss work to take their vehicles to a dealer for
repairs. Taguchi‘s solution is to design quality into a product as early as possible during the
engineering phase.
Figure 1: The Taguchi loss function

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According to Genichi Taguchi, Subir Chowdhury, and Shin Taguchi in Robust Engineering
(McGraw-Hill Professional, 1999), robustness is ―the state where the technology, product, or
process performance is minimally sensitive to factors causing variability (either in the
manufacturing or user‘s environment) and aging at the lowest unit manufacturing cost.‖ Robust
components minimize the loss in the loss function because the process is at the center of the
curve in the Taguchi loss function.
Taguchi quality loss function,
Introduction
Genichi Taguchi provided a whole new way to evaluate the quality of a product. Traditionally, product
quality has been a correlation between loss and market size for the product. Actual quality of the product
was thought of as an adherence to product specifications. Loss due to quality has usually only been
thought of as additional costs in manufacturing (i.e. materials, re-tooling, etc.) to the producer up to the
time of shipment or sale of the product. It was believed that after sale of the product, the consumer was
the one to bear costs due to quality loss either in repairs or the purchase of a new product. It has actually
been proven in most cases that in the end the manufacturer is the one to bear the costs of quality loss due
to things like negative feedback from customers. Taguchi changed the perspective of quality by
correlating quality with cost and loss in dollars not only at the manufacturing level, but also to the
customer and society in general.
Taguchi Quality Loss Function
You will most likely encounter Taguchi methods in a manufacturing context. They are statistical
methods developed by Genichi Taguchi to improve the quality of products. Whereas statisticians
before him focused on improving the mean outcome of a process, Taguchi recognized that in an
industrial process it is vital to produce a product on target , and that the variation around the
mean caused poor manufactured quality. For example, car windshields that have the target
average mean are useless if they each vary significantly from the target specifications.
What are the losses to society from poor quality?
Taguchi's key argument was that the cost of poor quality goes beyond direct costs to the
manufacturer such as reworking or waste costs. Traditionally manufacturers have considered
only the costs of quality up to the point of shipping out the product. Taguchi aims to quantify
costs over the lifetime of the product. Long term costs to the manufacturer would include brand
reputation and loss of customer satisfaction leading to declining market share. Other costs to the
consumer would include costs from low durability, difficulty interfacing with other parts, or the
need to build in safety margins.
Great, so what is the actual loss function?
Think for a moment about how the costs of quality would vary with the products deviation on
either side of the mean. Now if you were to plot the costs versus the diameter of a nut, for
example, you would have a quadratic function, with a minimum of zero at the target diameter.

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We expect therefore that the loss (L) will be a quadratic function of the variance (σ, or standard
deviation) from the target (m). The squared-error loss function has been in use since the 1930's,
but Taguchi modified the function to represent total losses. Next we will walk though the
derivation of the Taguchi Loss Function.
Loss functions for one piece of product:
Where:
L = Loss in Dollars
y = Quality Characteristic (diameter, concentration, etc)
m = Target Value for y
k = Constant (defined below)
The cost of the counter measure, or action taken by the customer to account for a defective
product at either end of the specification range, Ao, is found by substituting y = m + Δ0 into the
loss function:
Now we can solve for the constant k,
Since we are not usually concerned with only one piece of product, the loss function for multiple
units is
The process capability index (Cp) is used to forecast the quality level of non-defective products
that will be shipped out. The Cp has been used in traditional quality control and is defined rather
abstractly as:
where represents the tolerance of the product.
Substituting k into the loss function and then rearranging in terms of Cp,
Taguchi Loss Function:
The Taguchi quality loss function is a way to assess economic loss from a deviation in quality
without having to develop the unique function for each quality characteristic. As a function of
the traditionally used process capability index, it also puts this unit less value into monetary
units.

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Quality Loss Function for Various Quality Characteristics
There are three characteristics used to define the quality loss function:
1. Nominal–the-Best Characteristic
2. Smaller-the-Better Characteristic
3. Larger-the-Better Characteristic
Each of these characteristic types is defined by a different set of equations, which is different
from the general form of the loss function equation
Noriaki Kano’s concept of basic,
The Kano model offers some insight into the product attributes which are perceived to be
important to customers. The purpose of the tool is to support product specification and
discussion through better development of team understanding. Kano's model focuses on
differentiating product features, as opposed to focusing initially on customer needs. Kano also
produced a methodology for mapping consumer responses to questionnaires onto his model.
Threshold or Basic Attributes
One of the main points of assessment in the Kano model is the threshold attributes. These are
basically the features that the product must have in order to meet customer demands. If this
attribute is overlooked, the product is simply incomplete. If a new product is not examined using
the threshold aspects, it may not be possible to enter the market. This is the first and most
important characteristic of the Kano model.[11]
The product is being manufactured for some type
of consumer base, and therefore this must be a crucial part of product innovation. Threshold
attributes are simple components to a product. However, if they are not available, the product

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will soon leave the market due to dissatisfaction. The attribute is either there or not. An example
of a threshold attribute would be a steering wheel in a vehicle. The vehicle is no good if it is not
able to be steered.
The threshold attributes are most often seen as a price of entry. Many products have threshold
attributes that are overlooked. Since this component of the product is a necessary guideline,
many consumers do not judge how advanced a particular feature is. Therefore, many times
companies will want to improve the other attributes because consumers remain neutral to
changes in the threshold section.[13]
Performance Attributes
A performance attribute is defined as a skill, knowledge, ability, or behavioral characteristic that
is associated with job performance. Performance attributes are metrics on which a company
bases its business aspirations. They have an explicit purpose. Companies prioritize their
investments, decisions, and efforts and explain their strategies using performance attributes.
These strategies can sometimes be recognized through the company‘s slogans. For
example Lexus's slogan is ―The Pursuit of Perfection‖ (reliability) and Walmart; ―Always low
prices. Always‖ (cost). In retail the focus is generally on assuring availability of products at best
cost.
Performance attributes are those for which more is better, and a better performance attribute will
improve customer satisfaction. Conversely, a weak performance attribute reduces customer
satisfaction. When customers discuss their needs, these needs will fall into the performance
attributes category. Then these attributes will form the weighted needs against the product
concepts that are being evaluated. The price a customer is willing to pay for a product is closely
tied to performance attributes. So the higher the performance attribute, the higher the customers
will be willing to pay for the product. Performance attributes also often require a trade-off
analysis against cost. As customers start to rate attributes as more and more important, the
company has to ask itself, ―how much extra they would be willing to pay for this attribute?‖ And
―will the increase in the price for the product for this attribute deter customers from purchasing
it.‖ Prioritization matrices can be useful in determining which attributes would provide the
greatest returns on customer satisfaction.
Excitement Attributes
Not only does the Kano Model feature performance attributes, but additionally incorporates an
―excitement‖ attribute as well. Excitement attributes are for the most part unforeseen by the
client but may yield paramount satisfaction. Having excitement attributes can only help you, in
some scenarios it is ok to not have them included. The beauty behind an excitement attribute is to
spur a potential consumers‘ imagination, these attributes are used to help the customer discover
needs that they‘ve never thought about before. The key behind the Kano Model is for the
engineer to discover this ―unknown need‖ and enlighten the consumer, to sort of engage that
―awe effect.‖ Having concurrent excitement attributes within a product can provide a significant
competitive advantage over a rival. In a diverse product assortment, the excitement attributes act
as the WOW factors and trigger impulsive wants and needs in the mind of the customer. The
more the customer thinks about these amazing new ideas, the more they want it. Out of all the

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attributes introduced in the Kano Model, the excitement ones are the most powerful and have the
potential to lead to the highest gross profit margins. Innovation is undisputedly the catalyst in
delivering these attributes to customers; you need to be able to distinguish what is an excitement
today, because tomorrow it becomes a known feature and the day after it is used throughout the
whole world.
Attributes place on the model change over time
An attribute will drift over time from Exciting to performance and then to essential. The drift is
driven by customer expectations and by the level of performance from competing products.
For example mobile phone batteries were originally large and bulky with only a few hours of
charge. Over time we have come to expect 12+ hours of battery life on slim lightweight phones.
The battery attributes have had to change to keep up with customer expectations.
MODULE 3
Quality Control Tools
Seven QC tools-process flow chart
• Pareto chart
• Cause and effect diagram
• Histogram
• Stratification
• Scatter diagram
• Control charts
• Check sheets

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Pareto chart,
• Pareto Diagram is a technique of arranging data according to priority or importance and
using it into a problem solving frame work.
• This concept was first coined by Alfredo Pareto who conducted extensive studies of the
distribution of wealth in Europe and came to the conclusion that approximately 80% of
the wealth is concentrated in 20% of the population.
• This was extended to the customer base where it was observed that approximately 80% of
the business comes from 20% of the customers.
• For e.g. an auto ancillary organization has 15 automobile manufacturers as its customers
and their annual turnover is Rs.500 crores, applying the above principle, it means the
turnover of approximately Rs.400 crores is from three of their customers.
• 80% of the defectives likely to be due to 20% of the type of causes or defects.
• Under this method, data relating to the causes of rejections are collected, analyzed and
tabulated to find out the effect of the causes on rejections. In many cases of rejections,
may be the same few causes may have resulted in major rejection. There may be other
causes the share of which in total rejection may be negligible. Therefore, to improve
quality, one needs to concentrate on those few causes instead of many less important
causes
Type of defect Number Percent of total
Incomplete (A)
Surface Scars (B)
Cracks (C)
Others (D)
Misshapen (E)
48
32
23
8
4
42
28
20
7
3

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Histogram,
• Histogram is a tool to study the process variability. It is a graphical representation of a
frequency distribution which is a summary of variation in a product or process.
• The various inputs that go into a process for producing an output have their inherent
variations. The examples of such inputs are raw materials, machine condition, operator
skills, process parameters, factors in the environment etc.
• Even though we accept the any process has certain variations, we still want the product to
be as close as possible to the mean value in a normal distribution curve. Hence, we
collect data by taking sample observation from the population. The data is then plotted in
the form of vertical bars with the particular parameter being measured on the x axis and
the frequency of occurrence of the parameter on the y axis.
• A histogram analyses and graphically displays quantitative data rather than qualitative
data.
• Histograms help managers to achieve deeper insight into the characteristics of data
distributions associated with activities.

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Cause & effect diagram,
• Also called Fish Bone Diagram or Ishikawa Diagram or Root Cause Analysis Diagram, it
is a pictorial presentation in which all possible causes and the effects are displayed.
• The effect or outcome is shown on the right side of the diagram and the causes are shown
along the spine of the diagram.
• The causes are broken down into detailed causes. The C.E diagram brings out the
potential causes of the problem clearly. These causes are evaluated to narrow down to the
real causes.
• C.E. diagrams are sketched by the quality or problem solving teams. Brainstorming is
used to arrive at possible causes
• If some difficulty is experienced in starting off the diagram, use the ‗6 Ms‘ (men/people,
machines, methods, materials, management, mother earth/environment) as six initial
‗bones‘. Other alternatives for service operations are to use the ‗6 Ps‘ (Places,
Procedures, People, Policies, Process, Plant/Machinery), or the ‗6 Ss‘ (Surroundings,
Suppliers, Systems, Skills, Strategy, Service). Usually the diagram is built with one
person writing in points on the diagram and a team contributing their ideas.

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Check sheets,
• Check sheets provide a systematic means of collecting and analyzing data. Check sheets
are special types of data collection forms in which the results may be interpreted on the
form directly without additional processing.
• Check sheets facilitate systematic record keeping or data collection. Observations are
recorded as they happen which reveals patterns or trends.
• The check sheets are useful for both final testing of the product/service and also for
testing during the process. Check sheets are commonly used for equipment maintenance.

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Stratification
• Stratification is the process of separation of data into categories. It is normally done for
identifying the categories contributing to the problem being tackled.
• Stratification is the process to classify large amount of data to find out whether we can
get indication of problem point.
• Quality is influence by multiply causes or elements. Compounding the effect of these
causes makes it difficult to find clear relationship between element and quality i.e.
between causes and result.
• For this purpose, we categorized or group data in a particular way where by the group has
an identity of its own.
• For example, in a company the defectives were above 10%. The training and awareness
of the operators were not helping the situation. Then they segregated the production
operator wise and found that 5% of the operators were responsible per more than 70% of
the defect.
• The sources / bases for stratification could be material, machine, operator, time / season,
supplier, customer, department etc.
Scatter diagrams,
• This tool is particularly useful to determine which factor or parameter can be attributed to
the occurrence of a particular defect. For example, in a factory making rubber moulded
components it was initially thought that a particular defect was attributed to use of higher
proportion of carbon black. The proportion was varied and different samples taken and a
scatter diagram was constructed. It was found that the points were scattered and there was
no correlation i.e. the strength of correlation was very low. Hence it was clear that the
proportion of carbon black was not the reason for the defect. Another variable viz process
oil quantity was manipulated and again the correlation diagram was drawn. It was
observed that the correlation was very strong i.e. all the points were close to the
centerline.

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Statistical quality control,
• SQC is the application of statistical techniques to accept or reject products already
produced or to control the processes and , therefore, product quality while the part is
being made.

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• SQC for process control is based on the probability theory.
• When several identical parts are manufactured, some will be on the higher side and some
on the lower side. The middle or average will be the most frequent. When we plot the
size and the frequency or the count of the items, a normal or bell shaped curve results.
Advantages of SQC
1. Helps prevent defects. The assignable causes for deviation in quality are detected and
rectified.
2. It helps to avoid the risk of accepting a bad lot.
3. Since only samples are inspected, SQC avoids inspecting the entire lot.
4. Ensues maintenance of high quality standards and enables building up of customer
goodwill
Control charts-types, benefits,
A Control Chart is an instrument for monitoring a process in real time with the view to predict
whether and when a process is likely to go out of control so that corrective actions can be
initiated well in time.
Benefits of Control Chart
• Simple to use
• Enables synthesis, visualizations and interpretation of data
• Enables forecasting to a large extent about what is going to happen
• Helps in taking timely decisions

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Process capability studies,
Process
A process is the work performed with a set of inputs – raw materials, machines, and employees
that adds value and provides a product or service for the customer (internal or external).
Capability
Process capability is the ability of a process to produce products or services in a state of
statistical control (predictable) for a period of time under a given set of conditions. Outside
influences (special causes of variation) must be eliminated from the process in order to obtain
this level of statistical control.
Process Capability Study
After determining that our gauge(s) are capable of measuring to the level of precision necessary
and that our process is operating in a state of statistical control, we can perform the process
capability analysis. This final step is the comparison of our process spread, as defined by the +
3 spread of a normal distribution (for measurement data) or the location and spread of the
Poisson distribution (λ for attributes) to our product or service tolerances. We will only look at
variable data, not attributes, in this seminar.
Capability indices Cp & Cpk,
Numerical on Cp & Cpk

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MODULE 4
Eight QMS principles,
• Principle 1: Customer Focus
• Principle 2: Leadership
• Principle 3: Involvement of people
• Principle 4: Process approach
• Principle 5: Systems approach for management
• Principle 6: Continual improvement
• Principle 7: Factual approach to decision making
• Principle 8: Mutually beneficial supplier relationships.
Need for ISO 9000 & other quality systems,
• Certification for Quality Management System (QMS)
• Standards initiated by International Organization for Standardization, headquartered in
Geneva, Switzerland. This organization plays a major role in setting quality standards for
global manufacturers
• These standards are in use for external quality assurance for contracts to provide third
party assurance to the customer of a company‘s ability to satisfy contractual requirements
• International Organization for Standardization was founded in 1946. The first set of
written quality standards published in 1987. First revision took place in 1994 and the
second revision in 2000.
• The latest and currently in use standard is ISO 9001:2008
• No guarantee of quality: It guarantees consistency of quality of output subject to
following the procedures
• Standards are generic- they are written for all companies irrespective of the size, industry,
country and sectors of company activities being measured
• There are several assessing bodies all over the world. Thus, interpretation is the key to
the standard

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Features of ISO 9000
• It is obligatory to identify non-conformities. Non-conformity is a shortfall between what
is desired to be achieved and what is actually achieved
• Systematic prevention of non-conformities
• The philosophy is ―Do what you say and Say what you do‖
• It requires a formally documented procedure for each and every activity which is likely to
have a bearing on quality either directly or indirectly
• It requires faithful implementation of procedures and their revision if called for
Benefits of ISO Standards
• Uniformity
• Assurance of product quality
• Improvement in market share.
• Disciplined approach
• Export advantage
ISO 9001:2000 & 2008 elements,
• The international standard specifies requirements of a quality management system where
an organization:
a. Needs to demonstrate its ability to consistently provide products / services that meet
customer and applicable regulatory requirements.
b. Aims to enhance customer satisfaction through the effective application of the system
including processes for continued improvement of the system.
Documentation for quality systems,
Implementation of quality systems,

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Role of MR, quality audits,
TS 16949,
The ISO/TS16949 is an ISO technical specification aiming to the development of a quality
management system that provides for continual improvement, emphasizing defect prevention
and the reduction of variation and waste in the supply chain. It is based on the ISO 9001 and the
first edition was published in March 2002 as ISO/TS 16949:2002.
It was prepared by the International Automotive Task Force (IATF) and the "Technical
Committee" of ISO. It harmonizes the country-specific regulations of Quality-Management-
Systems.
About 30 percent of the more than 100 existing automobile manufacturers affiliate the
requirements of the norm but especially the large Asian manufacturers have differentiated, own
requirements for the quality management systems of their corporate group and their suppliers.
TS16949 applies to the design/development, production and, when relevant, installation and
servicing of automotive-related products. It is based on ISO 9001.
The requirements are intended to be applied throughout the supply chain. For the first time
vehicle assembly plants will be encouraged to seek ISO/TS16949 certification.
ISO 14000-standard requirements objectives & benefits

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MODULE 5
Quality functions deployment
 QFD is a planning tool used to fulfill customer expectations.
 Focuses on Voice of the customer.
 Market research attempts to capture the voice of customer but they sometimes conflict,
and lack clarity.
This is where voice of the customer gets lost and voice of the organization enters
Benefits of QFD:
 Improves customer satisfaction
– Defines requirements in a set of basic needs and compares it to all competitive
information.
– Management can then place resources where they will be the most beneficial in
improving quality.
 Reduces implementation time
– Fewer engineering changes needed
– Critical to quality issues are identified and monitored from product inception to
production.
 Promotes team work
– Horizontal deployment of communication channels
– Avoids misinterpretation, opinions and miscues.
 Provides documentation
– Database for future design or process improvements is created.
– Serves as a training tool for new engineers

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Benchmarking, Level
 How do today's business leaders sustain their competitive edge?
 By staying abreast of the latest, best practices and learning to apply them to every aspect
of their organization.
Whether you work in accounts payable, travel & entertainment, planning & budgeting,
inventory management or payroll, learning about, customizing and implementing the best
practices is the surest way to enhance the efficiency and effectiveness of your work
 Implicit in benchmarking are two key elements:
 Measuring performance in numerical terms (metrics). Requires some sort of units of
measure.
– The numbers achieved by the best in class benchmark are the target.
– Organization seeking improvement plots its own performance against the target.
– Think of measures of performance in your manufacturing unit? service unit? For
HR processes?
 Benchmarking requires that managers understand why their performance differs.
– Bench markers must develop a thorough and in-depth knowledge of both their
own processes and the processes of the best-in-class organization.
– An understanding of the differences allows the managers to organize their
improvement efforts to meet the goal.
Benchmarking is about setting goals and about meeting them by improving processes

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Types of benchmarking
1. Internal
– Comparison within the organization of similar activities.
– Data easy to obtain
2. Competitive
– Organization‘s survival depends on its performance relative to competition
– Through surveys, reports, customers, suppliers, buying customers product to take
apart and test.
3. Process.
– Many processes are common across industry boundaries, and innovations from
other types of organizations can be applied across industries.
– It is relatively easy to find organizations with world class operations through
published information, suppliers and consultants.
– For example, processes of payroll and accounts receivable, order processing,
design, logistics etc..
Benchmarking process,
 Decide what to benchmark
 Understand current performance
 Plan
 Study others
 Learn from the data
 Use the findings

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Brainstorming,
Process for generating creative ideas and solutions through intensive and freewheeling group
discussion Every participant is encouraged to think aloud and suggest as many ideas as possible,
no matter seemingly how outlandish or bizarre. Analysis, discussion, or criticism of the aired
ideas is allowed only when the brainstorming session is over and evaluation session begins. See
also lateral thinking and nominal group technique.
Cost of quality,
• Failure costs
• Appraisal costs
• Prevention costs
• Hidden costs
 Prevention Cost –Planning, Document, Control, Training
 Appraisal Cost –Inspection & Tests, Installation, Calibration, M/c Depreciation, Reports
& Rejects.
 Internal Failure Cost – Scraps, Repair Rework, Design Changes, Defect Failure Analysis,
Retests & Reinsertion, Downgrading, Down Time.
 External Failure Cost – Complaints, Goodwill, Failures, Services & Replacement,
Guarantee & Warranty, Compensation, Recall, Loss of Sales, Seconds Sales.
MODULE 6
Word Class Practices
Introduction to six sigma,
• Six Sigma is a concept developed by Motorola and now adopted by many organizations.
Motorola defined Six Sigma as a measure of goodness – a capability of a process to
produce perfect work. The Six Sigma concept is about the aim of making all processes in
the chain highly capable
• Six Sigma refers to the number of standard deviation from the average setting of a
process to the tolerance limit. In statistical terms, this translates to 3.4 defects per million
opportunities for error. For such levels of quality, both Design and Manufacturing have to
play a major role.

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Kaizen,
Quality circles,
• Teams of workers and supervisors that meet regularly to address work-related problems
involving quality and productivity.
• Developed by Kaoru Ishikawa at University of Tokyo.
• Became immediately popular in Japan as well as USA.
• Lockheed Missiles and Space Division was the leader in implementing Quality circles in
USA in 1973 (after their visit to Japan to study the same).
• Typically small day-to-day problems are given to quality circles. Since workers are most
familiar with the routine tasks, they are asked to identify, analyze and solve quality
problems in the routine processes.
TPM,
• TPM: Combines TQM concept with strategic view of maintenance from process and
equipment design to preventive maintenance
• It is a method designed to eliminate the losses caused by breakdown of machines by
identifying and attacking all causes of equipment breakdowns and system down time
• It places a high value on teamwork, consensus building and continous improvement
OEE,
• Overall Equipment Effectiveness (OEE) is a tool that combines multiple manufacturing
issues and data points to provide information about the process.
• By having a predetermined framework of the impact of machine availability, operator
performance and quality, OEE provides a framework to track underlying issues and root
causes.
• OEE also provides a framework for improvements in the manufacturing process.
• OEE takes into account the various sub components of the manufacturing process viz
Availability, Performance and Quality.

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• OEE = Availability x Performance x Quality.
Availability = Gross operating time
• Available production time
Performance = Actual production
Standard production
• Quality =Parts produced –defectives
Parts produced
Eight Piller of TPM,
• Kobetsu – Kaizen (individual improvement)
• Jishu –Hozen (autonomous maintenance)
• Planned Maintenance
• Education and Training
• Quality Management System
• TPM in Administration and Support Systems
• Layout, Safety, Health and Environment
• Development Management
Jishu hozen
Tangible & intangible of TPM,
 Productivity improvement
 Quality improvement
 Reduction in defectives

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 Reduction in Customer Complaints
 Cost Reduction
 Delivery Timely
 Safety
 Zero accidents
 Reduction in Pollution (Responsibility to society)
 Morale of employees
 Participation
 Suggestion schemes
 Increased equipment operating time
 Reduction in maintenance cost
 Reduction in inventories
 Better handling and layout
The Intangible Benefits of implementing TPM
• Introduction to autonomous maintenance. Operators take care of machines by themselves
& no need to order or remind them. The operators‘ sense of belongingness increases as
they take ownership of the machines.
• Neat and clean workplace – people find it pleasant and enjoyable to work.
• Zero defects and zero breakdowns induce a new confidence in the abilities of the
operators.
• Improved company image leading to more and more new customers.
Five S-definition, misconceptions, benefits, how to implement Five S,
 The concept of Five S is a practical approach for better work place management and was
originally developed in Japan by Takashi Osada. The features are common to all
functional areas and can be applied to workshop as well as offices. It also helps in
promoting teamwork. Five S and TPM go hand in hand and most organizations
implement them simultaneously.

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 Five S serves as a barometer for assessing the capability of an organization and is an easy
process to follow which can make anything to work well.
 Five S driven workplace enhances productivity and fosters a productivity culture through
a continual process of identifying, reducing and eliminating the Mudas.
 Five S is a set of techniques providing a standard approach to housekeeping
How do we benefit from implementation of Five S?
 Defect Prevention
 Accident Prevention
 Cleanliness and good housekeeping
 Conducive work environment
What are the Five S?
• SEIRI: Sorting - Organization or Reorganization
• SEITON: Systematize – Location for each item
• SEISO: Shine - Clean up, spic and span
• SEIKETSU: Standardize – All procedures
• SHITSUKE: Self discipline – Adopt as a way of life.
How to make Five S work effectively?
• Top management support is a must.
• Proper planning – date and time to launch the activity.
• Give wide publicity – create awareness at all levels.
• Budget for the activity.
• Work out a schedule with targets.
• Not necessary to take up in all areas simultaneously. May pick up a conducive area and
also one that badly needs such an activity.
• Create interest and healthy competitive spirit – awards for people who do good jobs.
Poka Yoke,

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Poka Yoka [poka joke] is a Japanese term that means "fail-safe" or "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 formalized, 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.
MODULE 7
Supplier Quality
Developing supplier partnership,
Vender selection,
Principles Applied to Vendor Selection
Several over-arching principles will be applied to the vendor selection process. The most
important of these are as follows:
1. Transparency – the process of vendor selection was done and continues to be done in the open
using clearly defined selection criteria. Evaluations of the vendors and their EHRs will be
documented and auditable MAXIMUS
2. Fairness – Every vendor offering a responsible, compliant EHR product is treated fairly with
selection solely dependent upon the quality of their offering and the value they offer the
Providers.
3. Inclusiveness – vendor selection is ultimately accomplished by a representative panel of
stakeholders, including providers, consumers, technical consultants, and Ponce School of
Medicine staff.
4. Value – vendors must offer an attractive value proposition to the Providers and be best able to
help the Providers achieve Meaningful Use standards as they begin to be applied in 2011 and
beyond.
5. Protection – vendors must agree to a standard set of terms and conditions prepared by the REC
for inclusion in each vendor‘s standard contract. These assure the Providers that the contract

35. SATYA TQM Page 35
Will protect the interests of the Providers as well as those of the vendor Although we plan to
offer a short-list of participating vendors as options to the Providers making their final
selections, every vendor will have an equal chance of qualifying through the process and of
reapplying later if they so choose.
Vendor Selection Criteria
The vendor selection criteria consist of three discrete sets of judgments applied at different stages
Of the process to arrive at a final status these criteria are listed below by the stage in the process
at which they are applied.
Stage 1: Initial Screening
1. Full Response to RFI
2. ONC certified or close (modular certification allowed if full EHR certification is expected)
3. Product covers an array of specialties
4. In use among Providers elsewhere
5. Spanish Language capabilities
6. Sure Scripts Certified
7. HIPAA Privacy compliance
8. Practice Management Functionality (CPT4, ICD 9-10)
9. Technical Interface capability
10. Manpower for Implementation
11. Local staff resources
12. At least one MD on staff or available as a consultant
13. User Ratings or references

36. SATYA TQM Page 36
Stage 2: Detailed Assessments
1. Usability
2. Demonstrations
3. Customizability MAXIMUS
4. Role-based security
5. ONC Stage 1 Certification
Stage 3: Final Agreements
1. Agreement with PSM REC Standard Terms and Conditions
2. Willingness to partner with the REC on promotion, implementation, and support
3. Willingness to offer favored pricing to Providers
Vender development,
Vendor Development can be defined as any activity that a Buying Firm undertakes to improve a
Supplier's performance and capabilities to meet the Buying Firms' supply needs.
Person/company who sells and supplies his/its products Identifying Developing Evaluating
continuous appraisal Points to be considered Quantity, time, material, volume, commercial
viability A list of potential suppliers
Advantages:
Able to develop more competition in the supply market as well as eliminate the monopoly
Company can buy material from number of sources Reduce the risk of non availability or
shortage of input materials over a number of suppliers In case of emergencies

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Stages of vendor development
Survey stage:
Collecting information on different suppliers of the desired materials Trade directories: Dealer‘s
addresses, regional offices, names, types and range of products including spares Trade journals:
advertisements of the materials related to specific industries Telephone directories: classified
advertisements arranged alphabetically, item wise or group wise - easy and fast:
Inquiry stage – selection of potential suppliers
Detailed analysis Accreditation, FDA approval and certifications Comparison bet‘ –
technological competition - service competition - price competition - time based competition
(TBC), i.e., response time for delivery Internal facilities of vendors: under supervision of
qualified and experienced staff additional facilities Modern equipment, quality of inputs,
maintenance, size and capacity, layout, housekeeping and cleanliness
Negotiations and selection stage:
Negotiations and selection stage Finalization of vendors Credit, quantity discount, quality
specifications etc can be decided List of approved vendors Purchase orders are placed.
Experience and evaluation stage- consolidation of vendors:
Experience and evaluation stage- consolidation of vendors To improve the performance of
vendors Evaluation especially on 2 counts, quality and delivery dif‘ methods: Categorical
method Weighted point method Cost ratio method.
Factors to be considered for vender evaluation & selection,
1.QUALITY
Why do companies that apparently have nothing whatsoever to do with technology invest big
amounts of money in IT projects? The bottom line is that they all want the overall efficiency and
Quality of their end product or service to nourish and improve. Maintaining quality standards
and providing quality service to facilitate customers and end users is the key to win their
confidence in the firm‘s goodwill. This would mean that while evaluating a vendor for your IT
project, make Quality your priority. You can only hope to deliver good quality through this
investment if your vendor delivers good quality to you.
2.PRICE/COST
Price or cost of the project quoted by the vendors has always been considered as one of the most
important aspect of vendor selection criteria. However, it is the ―Value-for-money‖ that matters

38. SATYA TQM Page 38
the most. Price alone can and should never act as the governing principle or you might end up
preferring a cheap vendor selling a failed project over a costly vendor selling an excellent
product. Value of money can thus act as a governing principle.
3. FINANCIAL HEALTH/STABILITY
The financial stability of the vendor is another important criterion to consider before making
your choice. If the vendor itself isn‘t financially sound, it can never become a reliable source for
your organization because in order to provide quality product using excellent expertise one must
also possess such resources.
4. PAST PERFORMANCE RECORDS
Firms must also carefully examine the performance history of the vendor. If the vendor seems to
have shown good results, maintains a happy customer base and seems to have sustained its
quality of performance over the years it is probably a good investment to do business with such a
vendor. Even those vendors that are good but show inconsistency in their performance are risky
business partners.
Numerical in vender rating,

39. SATYA TQM Page 39
MODULE 8
Strategic Quality Management
Quality policy relation to corporate policy,
Total quality & competitive advantage,
Total Quality Management (TQM) has become, according to one source, ‗as pervasive a part of
business thinking as quarterly financial results,‘ and yet TQM's role as a strategic resource
remains virtually unexamined in strategic management research. Drawing on the resource
approach and other theoretical perspectives, this article examines TQM as a potential source of
sustainable competitive advantage, reviews existing empirical evidence, and report‘s findings
from a new empirical study of TQM's performance consequences. The findings suggest that most
features generally associated with TQM—such as quality training, process improvement, and
benchmarking—do not generally produce advantage, but that certain tacit, behavioral,
imperfectly imitable features—such as open culture, employee empowerment, and executive
commitment—can produce advantage. The author concludes that these tacit resources, and not
TQM tools and techniques, drive TQM success, and those organizations that acquire them can
outperform competitors with or without the accompanying TQM ideology.
Quality planning process,
Quality Planning is the process for "identifying which quality standards are relevant to the
project and determining how to satisfy them": Quality planning means planning how-to fulfill
process and product (deliverable) quality requirements: "Quality is the degree to which a set of
inherent characteristics fulfill requirements"
By planning the quality one has to respect some principles:
Customer satisfaction comes first: Quality is defined by the requirements of the customer.
Prevention over inspection: It's better to avoid mistakes than to inspect the result and repair the
defects.
Management responsibility: Costs of quality must be approved by the management.
Continuous improvement: Becoming better is an iteratively structured process.