Ge 6757 total quality management (tqm)

GE 2022-TQM IV/VII MECHANICAL ENGINEERING
iii E.R.SIVAKUMAR,ASSO.PROF 2015-16
TABLE OF CONTENT
S.No Description Page No.
UNIT I INTRODUCTION
1.1 Introduction 1
1.1.1 Prerequisite Discussions of Quality 1
1.2 Concept 2
1.2.1. Need for Quality 2
1.2.2. Evolution of quality 2
1.2.3. Defining quality 3
1.3 Dimensions of quality 3
1.3.1 Dimensions of service quality 4
1.3.2 Definition of TQM 4
1.4 Characteristics Of TQM 4
1.4.1 Basic Concepts of TQM 4
1.5 TQM Frame work or (ELEMENTS OF TQM) 5
1.6 Principles of tqm 6
1.7 Obstacles (barriers) in implementing tqm 7
1.8 Benefits of tqm 7
1.9 Contributions of Deming 7
1.10 The juran trilogy 8
1.11 Contributions of Crosby 9
1.11.1 Crosby’s fourteen points 9
UNIT II TQM PRINCIPLES
2.1 Leadership 10
2.2 Characteristics for leadership 10
2.3 Leadership roles 10
2.4 Leaders 11
2.5 Characteristics of quality leaders 11
2.6 Leadership concepts 11
2.7 The 7 habits of highly effective people 11
2.8 Role of senior management 12
2.9 Quality council 12
2.10 Strategic quality planning 13
2.11 Seven steps to strategic quality planning 13
2.12 Quality statements 15
2.13 Customer satisfaction 18
2.14 Customer complaints 19
2.15 Tebouls Model of customer satisfication 21
2.16 Customer retention 23
2.17 Employee involvement 23
2.18 Motivation 23
2.19 Maslow’s hierarchy of needs 24
2.20 Herzberg’s two factor theory 25
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iv E.R.SIVAKUMAR,ASSO.PROF 2015-16
2.21 Empowerment 28
2.22 Job enrichment vs job empowerment 28
2.23 Teams 29
2.24 Types of teams 30
2.25 Characteristics of successful teams 30
2.26 Recognition and reward 34
2.27 Effects of recognition and reward system 37
2.28 Performance appraisal 37
2.29 Benefits of employee involvement 37
2.30 Continuous process improvement 38
2.31 The pdca cycle 41
2.32 5-s: housekeeping 45
2.33 Implementing 5-s 48
2.34 Kaizen 49
2.35 Kaizen cycle 49
2.36 Supplier partnership 50
2.37 Partnering 52
2.38 Sourcing 52
2.39 Supplier selection 52
2.40 Supplier rating 53
UNIT III TQM TOOLS & TECHNIQUES - I
3.1 Seven tools of quality 55
3.1.1 Prerequisite discussion 55
3.1.2 Concept 55
3.2 Flow charts 55
3.3 Applications 56
3.4 Histogram 56
3.5 Cause and Effect Diagram 57
3.6 Check sheet 58
3.7 Scatter diagram 59
3.8 Control charts 60
3.9 Pareto charts 60
Glossary 61
1. References 61
2. New Seven management Tools 61
3. Concept 62
4. Affinity diagram 62
5. Procedure 62
6. Applications 65
7. Relations diagram 66
8. Tree diagram 66
9 Matrix diagram 68
10 Matrix data analysis diagram 69
11 Process decision programme chart 72
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v E.R.SIVAKUMAR,ASSO.PROF 2015-16
12 Arrow diagram 73
13 Six sigma 75
14 Prerequisite discussion 75
15 Concept 76
16 Dmaic 76
17 Dmadv 77
18 Significance 77
19 Application 77
20 Companies which have adopted six sigma 77
21 Glossary 78
22 References 78
23 Benchmarking 78
24 Benchmarking concept 78
25 Reasons to benchmark 79
26 Process of benchmarking 79
26.1 Decide what to benchmark 79
26.2 Understand current performance 79
26.3 Plan 79
26.4 Types of benchmarking 79
26.5 Study others 79
26.6 Learn from the data 79
26.7 Using the findings 80
27 Pitfalls and criticisms of benchmarking 80
27.1 Significance 80
27.2 Application 80
28 Failure mode and effects analysis (fmea) 81
28.1 Types of FMEA 82
28.2 Benefits of fmea 82
28.3 Fmea documentation 84
28.4 Risk priority number (rpn) 10 85
28.5 Significance 85
28.6 Application 85
28.7 Glossary 88
28.8 References
Unit IV TQM Tools and Techniques - II
4.1 Prerequesite discussion 90
4.2 Concept 90
4.3 Improve customer satisfaction 90
4.4 Applications 91
4.5 Quality function deployment 91
4.6 Qfd team 91
4.7 House of quality 94
4.8 The steps in building a house of quality are 94
4.9 The qfd process 95
4.10 Application 96
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vi E.R.SIVAKUMAR,ASSO.PROF 2015-16
4.11 Taguchi’s quality loss function 96
4.12 Nominal – the – best 97
4.13 Smaller – the – better 98
4.14 Larger – the – better 99
4.15 Total productive maintenance 99
4.16 What is Maintenance and what is Maintenance Management? 100
4.17 Maintenance development stages 100
4.17.1 Break-down (corrective) maintenance 100
4.17.2 Preventive maintenance (1951) 100
4.17.3 Periodic (routine) maintenance (Time based maintenance - TBM) 101
4.17.4 Predictive maintenance 101
4.18 What is Total Productive Maintenance (TPM)? 101
4.19 Why TPM / The objective of TPM 102
4.20 Six core principles of TPM 102
4.21 Direct Benefits of TPM 103
4.22 Indirect benefits of TPM 103
4.23 Steps in introduction of TPM in a organization 103
4.23.1 Preparatory stage 103
4.23.2 TPM introduction in the organization 103
4.23.3 Initial education and propaganda for TPM 103
4.23.4 Setting up TPM and departmental committees 103
4.23.5 Establishing the TPM working system and target 103
4.23.6 A master plan for institutionalizing 104
4.24 Introduction stage 104
4.25 Implementation 104
4.26 Institutionalising stage 104
4.27 Tpm – pillars 105
4.28 Quality costs 110
4.29 Elements of qualitycost 110
4.30 Analysis of quality costs 110
4.30.1 Prevention cost 110
4.30.2 Appraisal cost 111
4.30.3 Internal failure cost 111
4.30.4 External failure cost 111
4.31 Analysis techniques of quality cost 111
4.32 Trend analysis 111
4.33 Pareto analysis 112
4.34 Index numbers 113
4.35 Performance measures 113
4.36 What should be measured? 114
4.36.1 Human resources 114
4.36.2 Customers 114
4.36.3 Production 114
4.36.4 Research and Development 114
4.36.5 Suppliers 114
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vii E.R.SIVAKUMAR,ASSO.PROF 2015-16
4.36.6 Marketing / sales 114
4.36.7 Administration 114
4.37 Strategy 114
4.38 Performance measure presentation 115
Unit V Quality Systems
5.1 Iso 9000:2000 116
5.2 Benefits of iso 9000 standards 117
5.3 CLAUSES (ELEMENTS) OF ISO 9000 (During the year 1987) 118
5.4 CLAUSES (ELEMENTS) OF ISO 9000 (During the year 2000) 119
5.5 Implementation of quality management system 120
5.6 Pitfalls of successful implementation 120
5.7 Documentation 120
5.8 Quality auditing 121
5.9 Purpose of quality audit 121
5.10 Types of quality audit 121
5.11 Iso 14000 – environmental management system 122
5.12 Environmental management system (ems) 122
5.13 Requirement of iso 14001 123
5.13.1 General requirements 123
5.13.2 Environmental policy 123
5.13.3 Planning 123
5.13.4 Implementation & operation 123
5.13.5 Checking & corrective action 123
5.13.6 Managenment review 123
5.14 Benefits of environmental management system 124
5.14.1 Global benefits 124
5.14.2 Organizational benefits 124
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GE 2022 TQM IV/VII MECHANICAL ENGINEERING
1 E.R.SIVAKUMAR ,ASSO.PROF/MECH 2015-2016
UNIT – I
1.1 INTRODUCTION
1.1.1 PREREQUISITE DISCUSSIONS
Quality is in its essence a way of management of the organization.
Quality is conformance to customer requirements. The requirements have many dimensions. The
number of quality experts also called quality gurus contributed to the evolution of quality.
AN INTRODUCTION:
A name itself is sufficient to describe everything but a bit more clarification will add to a base for the
description. Total quality management is a management’s approach towards the quality, it can be in
regard to products, customer satisfaction and employees satisfaction. The concept of TQM was
developed by an American W. Edwards Deming and i.e. why it is called as Deming’s concept of
TQM .He introduced this concept for improving the quality of various products and services. Earlier
it was just related with the quality of products which a organization is producing but now other
concepts like marketing, finance design, customer service has also joined the area. Which means that
now good numbers of things are there to manage. TQM works on one belief that mistakes can be
avoided and defects can be prevented. And management should believe in watching each and every
step.
TQM is now a day’s called as TPM (total productivity management) and an organization
needs to consider ABCD for the effective application of TQM where A stands for accident cure , B
stands for breakdown , C stands for cost reduction and D stands for damage. This policy of ABCD is
in relation to product and if TQM needs to be introduced a positive attitude from the side of
management and employees is required and then a collective effort will come up. TQM should give
chance for unleashing employee’s creativity and potential. The aim of TQM is to reduce variations in
quality of the products as well as in the working of whole organization. For the successful
implementation of TQM, an organization must consider the commitment from all the level of
organization. A concept of Six sigma is a part of TQM. It is a strategy developed by Motorola and it
helps to detect the defects and to remove them.
TQM talks about the satisfaction of customer, supplier, employees etc. and it requires
continuous improvement. If the workers of an organization are efficiently working then their morale
will go up. TQM works effectively if the organization works in a family manner. Here management is
like a father, employees are the children and manager is like mother and as father and mother takes
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care for their home collectively the same way , management and managers are supposed to take care
for their organization with the help of tool called TQM. Total quality management is called total
because entire organization is involved, Quality means degree of excellence. And management in
literal sense means getting things done by others. In a TQM effort, all members of an organization
participate in improving processes, products, services and the culture in which they work. The earlier
introduced quality management concept is now taken over by Total quality management. To have
effective TQM the first requirement is strong internal motivation and emotional involvement for
implementation. So the concept of TQM talks about adopting the new policy, creating quality
products, eliminate defects, estimate for breakdown, accidents etc . Hence TQM should be purpose
driven so first the whole organization should be willing to accept the change then only TQM can
actually affect the organization in a positive way.
1.2. CONCEPT
1.2.1. Need for quality:
The need for quality was felt, during World War II due to the unprecedented need for manufacture
goods. From them on methodologies for assuring quality in products and services evolved
continuously finally lead to TQM.
1.2.2. Evolution of quality (or) GURUS OF TQM:
SHEWHART - Control chart theory
PDCA Cycle
DEMING - Statistical Process Control
JURAN - Concepts of SHEWHART
- Return on Investment (ROI)
FEIGANBAUM - Total Quality Control
- Management involvement
- Employee involvement
- Company wide quality control
ISHIKAWA - Cause and Effect Diagram
- Quality Circle concept
CROSBY - “Quality is Free”
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- Conformance to requirements
TAGUCHI - Loss Function concept
- Design of Experiments
1.2.3. DEFINING QUALITY:
Quality is fitness for use
Quality is conformance to requirements
Quality is the totality of features and characteristics of a product or service that bear on its ability to
satisfy stated and implied needs of customer.
Quality can be quantified as follows
Q = P / E
where,
Q = Quality
P = Performance
E = Expectation
1.3. DIMENSIONS OF QUALITY:
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Dimension Meaning and Example
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Performance Primary product characteristics, such as the brightness of the picture
Features Secondary characteristics, added features, such as remote control
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Conformance Meeting specifications or industry standards, workmanship
Reliability Consistency of performance over time, average time of the unit to fail
Durability Useful life, includes repair
Service Resolution of problems and complaints, ease of repair
Response Human – to – human interface, such as the courtesy of the dealer
Aesthetics Sensory characteristics, such as exterior finish
Reputation Past performance and other intangibles, such as being ranked first
1.3.1 Dimensions of service quality
Reliability Refers to the dependability of the service providers and their ability to keep
their promises.
Responsiveness Refers to the reaction time of the service.
Assurance Refers the level of certainty a customer has regarding the quality of the
service provided.
Empathy Being able to understand the needs of the customer as an individual.
Tangibles Similar to the physical characteristics of quality of products.
Other Dimensions Time, Courtesy, Timeliness, consistency, accuracy, credibility and security.
Total Quality Management (TQM) is an enhancement to the traditional way of doing business.
1.3.2. Definition of TQM
Art of managing the whole to achieve excellence.
Total - Made up of the whole
Quality - Degree of Excellence a Product or Service provides.
Management - Art of handling, controlling, directing etc.
TQM is the application of quantitative methods and human resources to improve all the processes
within an organization and exceed CUSTOMER NEEDS now and in the future.
1.4. CHARACTERISTICS OF TQM
The above definitions revealed the following characteristics of TQM :
1. TQM is a customer oriented.
2. TQM required a long term commitment for continuous improvement of all processes.
3. TQM is teamwork.
4. TQM requires the leadership of top management and continuous involvement.
5. TQM is a strategy for continuous improving performance at all levels and in all areas of
responsibility.
1.4.1. Basic Concepts of TQM:
1. A committed and involved management.
2. An unwavering focus on the customer both internally and externally.
3. Effective involvement and utilization of entire work force,
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4. Continuous improvement of the business and production process.
5. Treating suppliers as partners.
6. Establish performance measures for the processes.
1.5. ELEMENTS OF TQM
A framework summarizing the important elements of TQM discussed in this text.
Three elements of TQM include
1. The philosophical elements of TQM stress the operation of the company using quality as the
integrating element.
2. The generic tools consist of various statistical process control (SPC) methods that are used for
problem solving and continuous improvement by quality teams. Quality function deployment is
typically used by managers to drive the voice of the customer into the organization.
3. Tools of the QC department consists of statistical quality control (SQC) methods such as
sampling
plans, process capability and Taguchi methods.
TQM Frame work:
1. Benchmarking 1. Leadership
2. Six sigma 2. Quality statements
3. Seven Traditional Tools 3. Customer focus
4. New seven management tools 4. Employee involvement
5. FMEA 5. Performance appraisal
6. Quality circle 6. PDSA cycle
7. Quality function deployment 7. 5S
8. Taguchi quality loss function 8. Kaizen
9. TPM 9. Supplier partnership.
TQM FRAME WORK
QUALITY GURUS
TOOLS AND TECHIQUES PRINCIPLES AND PRACTICES
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Approach:
Continuous improvement process.
Measures:
Performance Measures
1.6. PRINCIPLES OF TQM
 Customer’s requirements must be met the first time, every time.
 There must be agreed requirements, for both internal and external customers.
 Everybody must be involved, from all levels and across all functions.
 Regular communication with staff at levels is must. Two way communication at all levels
must be promoted.
 Identifying training needs and relating them with individual capabilities and requirements
is must.
Quality
Improvement
Process
Team
Work
Interpersonal
Skills
Problem
Solving
Discipline
Employee involvement, Structured, Stepwise,
Discipline, Consistency.
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 Top management’s participation and commitment is must.
 A culture of continuous improvement must be established.
 Emphasis should be placed on purchasing and supplier management
 Every job must add value.
 Quality improvement must eliminate wastes and reduce total cost.
 There must be a focus on the prevention of problems.
 A culture of promoting creativity must be established.
 Performance measure is a must at organization, department and individual levels. It helps
to asses and meet objectives of quality.
 There should be focus on team work.
1.7. OBSTACLES (BARRIERS) IN IMPLEMENTING TQM :
 Lack of Management Commitment
 Inability to change Organizational culture
 Improper planning
 Lack of continuous training and education
 Incompatible organizational structure and isolated individuals and departments
 Ineffective measurement techniques and lack of access to data and results
 Paying inadequate attention to internal and external customers
 Inadequate use of empowerment and teamwork
 Failure to continually improve
1.8. BENEFITS OF TQM:
 Improved quality
 Employee participation
 Team work
 Working relationships
 Customer satisfaction
 Employee satisfaction
 Productivity
 Communication
 Profitability
 Market share
1.9. CONTRIBUTIONS OF DEMING:
1. Create and publish the Aims and Purposes of the organization.
2. Learn the New Philosophy.
3. Understand the purpose of Inspection.
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4. Stop awarding business based on price alone.
5. Improve constantly and forever the System.
6. Institute Training.
7. Teach and Institute Leadership.
8. Drive out Fear, Create Trust and Create a climate for innovation.
9. Optimize the efforts of Teams, Groups and Staff areas.
10. Eliminate exhortations for the Work force.
11a. Eliminate numerical quotas for the work force.
11b. Eliminate Management by objectives.
12. Remove Barriers that rob people of pride of workmanship.
13. Encourage Education and Self-improvement for everyone.
14. Take action to accomplish the transformation.
1.10. THE JURAN TRILOGY
Juran views quality as fitness for use.
Juran Trilogy is designed to reduce the cost of quality over time.
1. QUALITY PLANNING
 Determine internal & external customers.
 Their needs are discovered.
 Develop product / service features.
 Develop the processes able to produce the product / service features.
 Transfer plans to operations.
2. QUALITY CONTROL
Control is used by operating forces to help meet the product, process and service requirements.
It consists of the following steps
1. Determine items to be controlled.
2. Set goals for the controls.
3. Measure actual performance.
4. Compare actual performance to goals.
5. Act on the difference.
3. QUALITY IMPROVEMENT
Aims to attain levels of performance that are higher than current levels.
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It consists of the following steps
 Establishment of quality council.
 Identify the improvement projects.
 Establish the project teams with a project leader.
 Provide the team with the resources.
1.11. CONTRIBUTIONS OF CROSBY:
The Four absolutes of quality are
1. Quality is defined as conformance to requirements.
2. The system for causing Quality is prevention.
3. The performance standard must be zero defects.
4. The measurement of Quality is the Price of Nonconformance
1.11.1 Crosby’s Fourteen Points:
1. Management Commitment
2. Quality Improvement Team
3. Quality Measurement
4. Cost of Quality Evaluation
5. Quality Awareness
6. Corrective Action
7. Establish an Ad Hoc Committee for the 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 Over Again
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UNIT – II
2.1. LEADERSHIP
“Leadership is lifting of man’s visions to higher sights, the raising of man’s performance to a
higher standard, the building of man’s personality beyond its normal limitations”.
Introduction:
The success of quality management is to a greater extent is influenced by the quality of the
leadership. Peter Drucker, the eminent management thinker and writer quotes: “Leadership is lifting
of man’s visions to higher sights, the raising of man’s performance to a higher standard, the building
of man’s personality beyond its normal limitations”.
Leadership is the process of influencing others towards the accomplishment of goals. Leader
triggers the will to do, show the direction and guide the group members towards the accomplishment
of the company’s goal.
2.2 CHARACTERISTICS FOR LEADERSHIP
 The customers first.
 Value people.
 Built supplier partnership.
 Empower people.
 Demonstrate involvement/commitment.
 Strive for excellence.
 Explain and deploy policy.
 Improve communication.
 Promote teamwork.
 Benchmark continuously.
 Establish system.
 Encourage collaboration.
2.3 LEADERSHIP ROLES
1. Producer role.
2. Director role.
3. Coordinator role roles.
4. Checker role.
5. Stimulator role.
6. Mentor role.
7. Innovator role.
8. Negotiator role.
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2.4 LEADERS
 Shape the Organization’s value
 Promote the Organization’s value
 Protect the Organization’s value and
 Exemplifies the Organization values
2.5 CHARACTERISTICS OF QUALITY LEADERS
1. They give priority attention to external and internal customers and their needs.
2. They empower, rather than control, subordinates.
3. They emphasis improvement rather than maintenance.
4. They emphasis prevention.
5. They emphasis collaboration rather than competition.
6. They train and coach, rather than direct and supervise.
7. They learn from the problems.
8. They continually try to improve communications.
9. They continually demonstrate their commitment to quality.
10. They choose suppliers on the basis of quality, not price.
11. They establish organizational systems to support the quality effort.
12. They encourage and recognize team effort.
2.6 LEADERSHIP CONCEPTS
A leader should have the following concepts
1. People, Paradoxically, need security and independence at the same time.
2. People are sensitive to external and punishments and yet are also strongly self - motivated.
3. People like to hear a kind word of praise. Catch people doing something right, so you can
pat them on the back.
4. People can process only a few facts at a time; thus, a leader needs to keep things simple.
5. People trust their gut reaction more than statistical data.
6. People distrust a leader’s rhetoric if the words are inconsistent with the leader’s actions.
2.7 THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE:
1. Be Proactive
2. Begin with the End in mind
3. Put First Things First
4. Think Win – Win
5. Seek First to Understand, then to Be Understood
6. Synergy
7. Sharpen the Saw (Renewal)
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2.8 ROLE OF SENIOR MANAGEMENT
1. Management by Wandering Around (MBWA).
2. Strategy of problem solving and decision making.
3. Strong information base.
4. Recognition and Reward system.
5. Spending most of the time on Quality.
6. Communication.
7. Identify and encourage potential employee.
8. Accept the responsibility.
9. To play a role model.
10. Remove road blocks.
11. Study TQM and investigate how TQM is implemented elsewhere.
12. Establish policies related to TQM.
13. Establish ‘priority of quality’ and ‘customer satisfaction’ as the basic policy.
14. Assume leadership in bringing about a cultural change.
15. Check whether the quality improvement programmes are conducted as planned.
16. Become coaches and cheer leaders to implement TQM.
17. Generate enthusiasm for TQM activities.
18. Visit other companies to observe TQM functioning.
19. Attend TQM training programme.
20. Teach others for the betterment of society and the surroundings.
2.9 QUALITY COUNCIL
A quality council is established to provide overall direction.
The council is composed of
 Chief Executive Officer
 Senior Managers
 Coordinator or Consultant
 A representative from the Union
Duties of the council are
 Develop the core values, vision statement, mission statement and quality policy statement
 Develop the strategic long term plan with goals and Annual Quality Improvement Program
with objectives
 Create the total education and training plan
 Determine and monitor the cost of poor quality
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 Determine the performance measures
 Determine projects those improve the process
 Establish multifunctional project and work group teams
 Revise the recognition and rewards system
A typical meeting agenda will have the following items
 Progress report on teams
 Customer satisfaction report
 Progress on meeting goals
 New project teams
 Benchmarking report
Within three to five years, the quality council activities will become ingrained in the culture of the
organization.
2.10 STRATEGIC QUALITY PLANNING
Goals – Long term planning (Eg : Win the war)
Objectives – Short term planning (Eg : Capture the bridge)
Goals should
 Improve customer satisfaction, employee satisfaction and process
 Be based on statistical evidence
 Be measurable
 Have a plan or method for its achievement
 Have a time frame for achieving the goal
 Finally, it should be challenging yet achievable
2.11 SEVEN STEPS TO STRATEGIC QUALITY PLANNING
In order to integrate quality with the strategic planning process, a systematic and sequential procedure
has to be adopted. There are seven basic steps to strategic process planning. They are
Step 1. Customer Needs
PRESENT VISION OF
FUTURE
STRATEGIC PLAN
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The basic step is the identification of customers and their wants and needs. An organization
must seek its customers’ requirements, expectations and assess future trends before developing a
strategic plan.
Step 2. Customer Position
The second step requires the planners to determine its positioning with regards to its
customers. Various alternatives such as whether the organization should give up, maintain or expand
market position should be considered. In order to become successful, the organization should
concentrate and consolidate its position in its areas of excellence.
Step 3. Predict the Future
Next, the planners must predict future conditions that will affect their product or service: To
help predicting the future, the tools such as demographics, economic forecasts, and technical
assessments or projections may be used.
Step 4. Gap Analysis
In this step, the planners must identify the gaps between the current state and the future state
of the organization. This concept is also known as value stream mapping. For identifying the gaps,
an analysis of the core values and concepts and other techniques may be used.
Customer needs
Customer Positioning
Predict the future
Gap Analysis (Comparison of
various alternatives)
Closing the gap (selection of
best alternative)
Alignment
Implementation
Reevaluated and review
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Step 5. Closing the Gaps
Now the planners should develop a specific plan to close the gaps. This process is also termed
as Process improvement. By assessing the relative importance and relative difficulty of each gap,
planners can close the gaps.
Step 6. Alignment
Now the revised plan should be aligned with the mission, vision, and core values and concepts
of the organization. Organization should embrace quality as an essential ingredient in their vision,
mission, and objectives.
Step 7. Implementation
In order to implement the action plan, resources must be allocated to collecting data,
designing changes, and overcoming resistance to change. Also the planners should monitor and assess
the result of the strategic plan.
Since quality is a continuous improvement process, one has to reassess and renew the
strategic plans periodically. So it is a cyclic process. Figure summarizes the strategic planning cycle.
2.12 QUALITY STATEMENTS
QUALITY STATEMENTS
Three elements of quality statements are :
a. Vision statement,
b. Mission statement, and
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c. Quality policy statement
What is Vision Statement?
1. The vision statement is a short declaration of what on organization aspires to be tomorrow.
2. It is the ideal state that might never be reached; but on which one will work hard continuously
to achieve. Successful visions provide a brief guideline for decision making.
3. The vision statement should be coined in such a way that the leaders and the employees
working in the organization should work towards the achievements of the vision statement.
4. An example of a simple vision statement is :
“To continuously enrich knowledge base of practitioners in mobility industry and institutions
in the service of humanity”. – Society of Automotive Engineers (SAE)
What is Mission Statement?
1. The mission statement, describes the function of the organization. It provides a clear statement
of purpose for employees, customers, and suppliers.
2. The mission statement answers the following questions : who we are?; who are our
customers? ; what we do?; and how we do it?
3. An example of a simple mission statement is :
“Concern for the ultimate customers – millions of customers
Concern for the intermediate customers – the trade
Concern for the suppliers – the sources of raw materials and ancillaries
Concern for the employees – the most valued asset
Concern for the competitors – wishing them well as healthy competition ultimately benefits
the customers.
Concern for the shareholders – the investing public
Concern for the national aspiration – India’s future!”
- ITC Limited
What is Quality Policy Statement?
 The quality policy is a guide for everyone in the organization as to how they provide products
and service to the customers.
 It should be written by the CEO with feedback from the workforce and be approved by the
quality council.
 A quality policy is a important requirement of ISO 9000 quality systems.
 An example of a simple quality policy statement is:
“Xerox is a quality company. Quality is the basic business principle for Xerox. Quality means
providing our external and internal customers with innovative products and services that fully
satisfy their requirements. Quality is the job of every employee”.
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VISION STATEMENT
 It is a short declaration of what an organization aspires to be tomorrow.
Example :
Disney Theme Park - Happiest place on earth
Polaroid - Instant photography
 Successful visions provide a guideline for decision making
MISSION STATEMENT
It answers the following questions
 Who we are?
 Who are the customers?
 What we do?
 How we do it?
It describes the function of the organization. It provides a clear statement of purpose for employees,
customers & suppliers
A simpler mission statement is
“To meet customers transportation and distribution needs by being the best at moving their
goods on time, safely and damage free”
- National Railways
QUALITY POLICY STATEMENT
It is guide for everyone in the organization as to how they should provide products and services to the
customers.
Common characteristics are
 Quality is first among equals
 Meet the needs of the internal & external customers
 Equal or exceed competition
 Continuously improve the quality
 Utilize the entire workforce
Ex: Xerox is a quality company. Quality is the basic business principle for Xerox. Quality means
providing our external and internal customers with innovative products and services that fully satisfy
their requirements.
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2.13 CUSTOMER SATISFACTION
WHO ARE THE CUSTOMERS?
The customers are :
1. The most important people in the business.
2. Not dependent on the organization. The organization depends on them.
3. Not an interruption to work but are the purpose of it.
4. Doing a favour when they seek business and not vice-versa.
5. A part of business, not outsiders.
6. Life blood of the business.
7. People who come with their needs and jobs.
8. Deserve the most courteous and attentive treatment.
Types of Customers
Customers are two types. They are :
1. Internal customers, and 2. External customers.
1. Internal Customers
1. The customers inside the company are called internal customers.
2. As there is a flow of work, product and service in the organization, each department is
dependent on the other. In this, each department or each quality management unit is
considered as a customer by the previous department and as a supplier for the next
department. Similarly every person in a process is considered as a customer of the preceding
operation. This explains the concept of internal customer.
2. External Customers
 The customers outside the company are called external customers.
 In other words, an external customer is the one:
 who uses the product or service ;
 who purchases the product or service; or
 who influences the sale of the product or service.
Customer – Supplier Chain
In order to achieve the total customer orientation, TQM requires the better customer – supplier
relationship. Figure shows the model of customer – supplier chain.
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All processes require inputs, which are provided by the internal or external suppliers.
Similarly all processes delivers outputs, which are used by internal or external customers. Each unit is
considered as a customer by the previous unit and as a supplier for the next unit.
Customer satisfaction, a business term, is a measure of how products and services supplied by a
company meet or surpass customer expectation. It is seen as a key performance indicator within
business and is part of the four of a Balanced Scorecard.
 In a competitive marketplace where businesses compete for customers, customer satisfaction
is seen as a key differentiator and increasingly has become a key element of business strategy.
2.14 CUSTOMER COMPLAINTS
 Satisfied
 Dissatisfied customer
 Totally satisfied customer contributes to monitored.

FEEDBACK (INFORMATION COLLECTING TOOLS)
Feedback enables organization to
 Discover customer satisfaction
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 Discover relative priorities of quality
 Compare performance with the competition
 Identify customer needs
 Determine opportunities for improvement
Listening to the voice of the customer can be accomplished by numerous information collecting tools.
1. Comment Card
2. Customer Questionnaire
Highly Neutral Highly
Satisfied Dissatisfied
1. Trash removal 5 4 3 2 1
2. Personal hygiene 5 4 3 2 1
3. Romance 5 4 3 2 1
4. Thoughtfulness 5 4 3 2 1
5. Listening skills 5 4 3 2 1
6. Faithfulness 5 4 3 2 1
7. Respect for
Mother – in - law 5 4 3 2 1
8. Overall,how satisfied
are you with your
marriage? 5 4 3 2 1
To make surveys more useful, it is best to remember eight points
 Clients and Customers are not the same
 Surveys raise customers expectations
 How you ask a question will determine how the question is answered
 The more specific the question, the better the answer
 You have only one chance and only 15 minutes
 The more time you spend in survey development, the less time you will spend in data
analysis and interpretation
 Who you ask is as important as what you ask
 Before the data are collected, you should know how you want to analyse and use the data
3. Focus Groups
These groups are very effective for gathering information on customer expectations and
requirements.
4. Toll – Free Telephone Numbers
5. Customer Visits
6. Report Card
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7. The Internet and Computers
8. Employee Feedback
9. Mass Customization
2.15 Tebouls Model of customer satisfication
USING CUSTOMER COMPLAINTS
Actions an organization can take to handle complaints are as follows
 Investigate customers experiences by actively getting feed back, both positive and negative,
and then acting on it promptly
 Develop procedures for complaint resolution that include empowering front – line
personnel.
 Analyze complaints, but understand that complaints do not always fit into neat categories.
 Work to identify process and material variations and then eliminate the root cause. “More
inspection” is not corrective action.
 When a survey response is received, a senior manager should contact the customer and
strive to resolve the concern.
 Establish customer satisfaction measures and constantly monitor them.
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 Communicate complaint information, as well as the results of all investigations and
solutions, to all people in the organization.
 Provide a monthly complaint report to the quality council for their evaluation and, if needed,
the assignment of process improvement teams.
 Identify customers’ expectations beforehand rather than afterward through complaint
analysis.
SERVICE QUALITY
Customer service is the set of activities an organization uses to win and retain customer’s
satisfaction. It can be provided before, during, or after the sale of the product or exist on its own.
Elements of customer service are
Organization
1. Identify each market segment.
2. Write down the requirements.
3. Communicate the requirements.
4. Organize processes.
5. Organize physical spaces.
Customer Care
6. Meet the customer’s expectations.
7. Get the customer’s point of view.
8. Deliver what is promised.
9. Make the customer feel valued.
10. Respond to all complaints.
11. Over – respond to the customer.
12. Provide a clean and comfortable customer reception area.
Communication
13. Optimize the trade – off between time and personal attention.
14. Minimize the number of contact points.
15. Provide pleasant, knowledgeable and enthusiastic employees.
16. Write document in customer friendly language.
Front-Line people
17. Hire people who like people.
18. Challenge them to develop better methods.
19. Give them the authority to solve problems.
20. Serve them as internal customers.
21. Be sure they are adequately trained.
22. Recognize and reward performance.
23. Lead by example.
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24. Listen to the front-line people.
25. Strive for continuous process improvement.
2.16 CUSTOMER RETENTION
It means “retaining the customer” to support the business. It is more powerful and effective than
customer satisfaction.
For Customer Retention, we need to have both “Customer satisfaction & Customer loyalty”.
The following steps are important for customer retention.
1. Top management commitment to the customer satisfaction.
2. Identify and understand the customers what they like and dislike about the organization.
3. Develop standards of quality service and performance.
4. Recruit, train and reward good staff.
5. Always stay in touch with customer.
6. Work towards continuous improvement of customer service and customer retention.
7. Reward service accomplishments by the front-line staff.
8. Customer Retention moves customer satisfaction to the next level by determining what is truly
important to the customers.
9. Customer satisfaction is the connection between customer satisfaction and bottom line.
2.17 Employee Involvement
 Employee involvement is one approach to improve quality and productivity.
 It is a means to better meet the organization’s goals for quality and productivity.
2.18 MOTIVATION
CONCEPT OF MOTIVATION
a. Scott defines, “Motivation means a process of stimulating people to accomplish desired
goals.”
b. Edwin B. Flippo defines, “Motivation is the process of attempting to influence others to do
your will through the possibility of reward.”
c. In simple words, motivation is the process of inducing people inner drives and action towards
certain goals and committing his energies to achieve these goals.
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IMPORTANCE OF MOTIVATION
a. Motivation improves employee involvement.
b. Motivation promotes job satisfaction and thus reduces absenteeism and turnover.
c. Motivation helps in securing a high level of performance and hence enhances efficiency and
productivity.
d. Motivation creates a congenial working atmosphere in the organization and thus promotes
interpersonal cooperation.
THEORIES OF MOTIVATION
Though there are many theories of motivation, the Maslow’s hierarchy of needs theory and
Herzberg’s two factor theory are more important from our subject of view.
2.19 MASLOW’S HIERARCHY OF NEEDS
EMPLOYEE WANTS
-------------------------------------------------------------------------------------------------
Factor Employee Rating Manager Rating
Interesting work 1 5
Appreciation 2 8
Involvement 3 10
Job security 4 2
Good Pay 5 1
Promotion/ growth 6 3
Good working conditions 7 4
Loyalty to employees 8 7
Help with personal problems 9 9
Tactful discipline 10 6
Social
Security
Self - Actualization
Esteem
Survival
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(OR)
2.20 Herzberg’s Two Factor Theory
This theory is also called motivation-hygiene theory. This theory is based on two factors: 1.
Motivation factors or satisfiers, and 2. Hygiene factors or dissatisfiers. Various motivation and
hygiene factors are listed in Table.
Motivation and hygiene factors
Motivation Factors Hygiene Factors
 Achievement  Supervisors
 Recognition  Working conditions
 The work itself  Interpersonal relationships
 Responsibility  Pay and security
 Advancement and growth  Company policy and administration
According to Herzberg, maintenance or hygiene factors are necessary to maintain a reasonable
level of satisfaction among employees. These factors do not provide satisfaction to the employees but
their absence will dissatisfy them. Therefore these factors are called dissatisfiers.
On the other hand, motivational factors creates satisfaction to the workers at the time of
presence but their absence does not cause dissatisfaction. It can be noted that Herzberg’s dissatisfiers
are roughly equivalent to Maslow’s lower levels, and the motivators are similar to the Maslow’s
upper levels.
Self
Actualization
Needs
Esteem Needs
Social Needs
Safety Needs (or) Security Needs
Physiological (or) Basic Needs
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Thus the knowledge of motivation is required for any organization to understand the
utilization of employee involvement.
ACHIEVING A MOTIVATED WORK FORCE
The building of a motivated work force if for the most part an indirect process. Concepts to
achieve a motivated work force are as follows:
1. Know thyself.
2. Know your employees.
3. Establish a positive attitude.
4. Share the goals.
5. Monitor progress.
6. Develop interesting work.
 Job rotation
 Job enlargement
 Job enrichment
7. Communicate effectively
8. Celebrate success.
EMPLOYEE SURVEYS
Employee surveys help managers assess the current state of employee relations, identify trends,
measure the effectiveness of program implementation, identify needed improvements, and increase
communication effectiveness.
STEP 1 The Quality Council to create a multifunctional team
STEP 2 The Team will develop survey instrument
STEP 3 Administer the survey
STEP 4 Results are compiled and analyzed
STEP 5 Determine areas for improvement
 Employee involvement is creating an environment in which people have an impact on
decisions and actions that affect their jobs.
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 Tell: the supervisor makes the decision and announces it to staff. The supervisor provides
complete direction.
 Sell: the supervisor makes the decision and then attempts to gain commitment from staff by
"selling" the positive aspects of the decision.
 Consult: the supervisor invites input into a decision while retaining authority to make the
final decision herself.
 Join: the supervisor invites employees to make the decision with the supervisor. The
supervisor considers her voice equal in the decision process.
To round out the model, I add the following.
 Delegate: the supervisor turns the decision over to another party.
Seven Rules of Motivation
#1 Set a major goal, but follow a path. The path has mini goals that go in many
directions. When you learn to succeed at mini goals, you will be motivated to
challenge grand goals.
#2 Finish what you start. A half finished project is of no use to anyone. Quitting is
a habit. Develop the habit of finishing self-motivated projects.
#3 Socialize with others of similar interest. Mutual support is motivating. We will
develop the attitudes of our five best friends. If they are losers, we will be a loser. If
they are winners, we will be a winner. To be a cowboy we must associate with
cowboys.
#4 Learn how to learn. Dependency on others for knowledge supports the habit of
procrastination. Man has the ability to learn without instructors. In fact, when we
learn the art of self-education we will find, if not create, opportunity to find success
beyond our wildest dreams.
#5 Harmonize natural talent with interest that motivates. Natural talent creates
motivation, motivation creates persistence and persistence gets the job done.
complete direction.
cowboys.
complete direction.
cowboys.
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#6 Increase knowledge of subjects that inspires. The more we know about a
subject, the more we want to learn about it. A self-propelled upward spiral develops.
#7 Take risk. Failure and bouncing back are elements of motivation. Failure is
alearning tool. No one has ever succeeded at anything worthwhile without a string of
failures.
2.21 EMPOWERMENT
CONCEPT OF EMPOWERMENT
Empowerment is the opposite of helplessness or dependency. An empowered person does not
feel incapable of doing the things that he considers important for the well-being of his organization.
There are no constraints that he perceives to be externally imposed. In other words, being empowered
implies that the person acts from a state of autonomy, doing what he knows is the right thing to do
under a given set of circumstances.
It is understood that empowerment is dependent upon two factors:
(i) An individual’s personal choices; and
(ii) The organization climate, that can either encourage dependency or foster autonomy.
EMPOWERMENT DEFINED
1. According to Webster’s Dictionary, the verb empower means ‘to give the means, ability or
authority’. Therefore empowerment in work setting involves giving people the means, ability
and authority to do something they have not done before.
2. An operation definition of empowerment: “Empowerment is an environment in which people
have the ability, the confidence, and the commitment to take the responsibility and ownership
to improve the process and initiate the necessary steps to satisfy customer requirements within
well-defined boundaries in order to achieve organizational values and goals.”
2.22 Job Enrichment Vs Job Empowerment
Job enrichment is aimed at expanding the content of an individual’s job. But job
empowerment focuses on expanding on the context of the job such as its interactions and
interdependencies to other functions of the organization.
Empowerment is investing people with authority. It’s purpose is to tap the enormous reservoir
of potential contribution that lies within every worker.
The two steps to empowerment are
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1. To arm people to be successful through coaching, guidance and training.
2. Letting people do by themselves.
The principles of empowering people are given below.
1. Tell people what their responsibilities are.
2. Give authority.
3. Set standards for excellence.
4. Render training.
5. Provide knowledge and information.
6. Trust them.
7. Allow them to commit mistakes.
8. Treat them with dignity and respect.
Three dimensions of empowerment are
 Capability
 Alignment and
 Trust
CHARACTERISTICS OF EMPOWERED EMPLOYEES
Some important characteristics of empowered employees, identified by Hubert Rampersad, are that:
 They feel responsible for their own task.
 They are given a free hand in their work.
 They balance their own goals with those of the organization.
 They are well trained, equipped, creative, and customer oriented.
 They are critical, have self-esteem, and are motivated.
 They are challenged and encouraged.
 They monitor and improve their work continuously.
 They find new goals and change challenges.
Therefore, it is important to empower individuals and teams at all levels of the organization to
achieve the continuous improvement process.
2.23 TEAMS
 Employee involvement is optimized by the use of teams.
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 A team is defined as a group of people working together to achieve common objectives or
goals.
 Teamwork is the cumulative actions of the team during which each member of the team
subordinates his individual interests and opinions to fulfill the objectives or goals of the group.
WHY TEAMS WORK
1. Many heads are more knowledgeable than one.
2. The whole is greater than the sum of its members.
3. Team members develop a rapport which each other.
4. Teams provide the vehicle for improved communication.
2.24 TYPES OF TEAMS
1. Process improvement team.
2. Cross – functional team.
3. Natural work teams.
4. Self – Directed / Self – Managed work teams.
2.25 CHARACTERISTICS OF SUCCESSFUL TEAMS :
1. Sponsor 2. Team Charter
3. Team Composition 4. Training
5. Ground Rules 6. Clear Objectives
7. Accountability 8.Well-Defined decision procedure
9. Resources 10. Trust
11.Effective Problem Solving 12. Open Communication
13. Appropriate Leadership 14. Balanced Participation
15. Cohesiveness
The effective team should have certain characteristics. These are :
1. Sponsor : In order to have effective liason with the quality council, there should be a sponsor. The
sponsor is a person from the quality council, he is to provide support to the organization.
2. Team Charter : A team charter is a document that defines the team’s mission, boundaries, the
background of the problem, the team’s authority and duties, and resources. It also identifies the
members and their assigned roles – leader, recorder, time keeper and facilitator.
3. Team Composition : The size of the team should not exceed ten members except in the case of
natural work teams or self-directed teams. Teams should be diversed by having members with
different skills, perspective and potential. Wherever needed, the internal and external customers and
suppliers should be included as a team member.
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4. Training : The team members should be trained in the problem-solving techniques, team dynamics
and communication skills.
5. Ground Rules : The team should have separate rules of operation and conduct. Ground rules
should be discussed with the members, whenever needed it should be reviewed and revised.
6. Clear Objectives: The objective of the team should be stated clearly. Without the clear objective,
the team functions is not to be effective.
7. Accountability: The team performance is accountable. Periodic status report of the team should be
given to the quality council. The team should review its performance to determine possible team
process weaknesses and make improvements.
8. Well-defined Decision Procedures: The decision should be made clearly at the right time by the
team.
9. Resources: The adequate information should be given to the team wherever needed. The team
cannot be expected to perform successfully without the necessary tools.
10. Trust : Management must trust the team to perform the task effectively. There must also be trust
among the members and a belief in each other.
11. Effective Problem-Solving : Problem-solving methods are used to make the effective decision.
12. Open Communication : Open communication should be encouraged i.e., everyone feels free to
speak in the team whatever they are thinking, without any interruptions.
13. Appropriate Leadership: Leadership is important in all the team. Leader is a person who leads
the team, motivates the team and guides the team in a proper direction.
14. Balanced Participation : Everyone in a team should be involved in the team’s activities by
voicing their opinions, lending their knowledge and encouraging other members to take part.
15. Cohesiveness: Members should be comfortable working with each other and act as a single unit,
not as individuals or subgroups.
ELEMENTS OF EFFECTIVE TEAM WORK
Main elements of effective teamwork are as follows:
1. Purpose
2. Role and responsibilities
3. Activities
4. Effectiveness
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5. Decisions
6. Results, and
7. Recognition.
Figure depicts the seven main elements of effective teamwork.
(i) STAGES OF TEAM DEVELOPMENT
Each term takes sometime to start functioning effectively towards problem solving. Each team
goes through six distinct stages in its development. These are farming, storming, norming,
performing maintenance and evaluating.
1. Farming stage : When a team is created, it consist of group of individuals and team work does not
exist at this stage. Team’s purpose, members’ roles, acceptance of roles, authority and process of
functioning are learnt in the formation process.
2. Storming stage : Initial agreements and role allocations are challenged and re-established at this
stage of team development. At this stage, hostilities and personal needs often emerge which may be
resolved.
3. Norming stage : During norming stage of team development, formal and informal relationships get
established among team members. Openness and cooperation have been observed as signs of team’s
behaviour.
4. Performing stage : At this stage, the team starts operating in successful manner. Trust, openness,
healthy conflict and decisiveness of a group’s performance can be reached at this stage.
5. Decisions
6. Results, and
7. Recognition.
resolved.
behaviour.
5. Decisions
6. Results, and
7. Recognition.
resolved.
behaviour.
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5. Maintenance stage : Functioning of team does not deteriorate overtime. At this stage, the
performance of teamwork at the earlier stage will be maintained for some period of time.
6.Evaluating stage : At this stage, team’s performance is to be evaluated in view of the set targets.
Both self-evaluation and management-based evaluation form this stage of team development.
TEAM MEMBER ROLES
TEAM LEADER
 Ensures the smooth and effective operation of the team.
 Facilitates the team process.
 Serves as a Contact Point.
 Organizes the implementation of changes.
 Prepares the meeting agenda.
FACILITATOR
 Supports the leader.
 Focuses on the team process.
 Acts as a resource to the team.
 Provides feedback to the team.
 RECORDER
 Documents the main ideas of the team’s discussion, the issues raise, decisions made, action
items etc.
 Presents the documents and distributes the MOM.
 Participates as a team member.
TIMEKEEPER
 Ensures that the team maintains the schedule.
 Participates as a team member.
TEAM MEMBER
 Contributes best, without reservation.
 Respects other people’s contributions.
 Listens carefully and asks questions.
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 Works for consensus on decisions.
 Supports the decision of the team.
 Understands and is committed to the team objectives.
 Respects and is tolerant of individual differences.
 Acknowledges and works through conflict openly.
 Carries out assignments.
DECISION MAKING METHODS
1. Non-decision.
2. Unilateral decision.
3. Handclasp decision.
4. Minority-rule decision.
5. Majority-rule decision.
6. Consensus.
COMMON BARRIERS TO TEAM PROGRESS
 Insufficient training.
 Incompatible rewards and compensation.
 First-line supervisor resistance.
 Lack of planning.
 Lack of management support.
 Access to information systems.
 Lack of Union support.
 Project scope too large.
 Project objectives are not significant.
 No clear measures of success.
 No time to do improvement work.
2.26 RECOGNITION AND REWARD
RECOGNITION AND REWARD.
MEANING:
Recognition is a process whereby management shows acknowledgement of an employee’s
outstanding performance. Recognition is a form of employee positive motivation. Recognition of
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employees is highly essential as people find themselves in a accepted and winning role. To sustain
employee’s interest and to propel them towards continuous improvement, it is essential to recognize
the people. This acknowledgement may be of financial, psychological or both in nature.
Ways to recognize people
Send letters to improve team members when they establish a team thanking them for their
involvement.
1. Develop a behind the scenes awards specifically for those whose actions are not usually in
the lime light, make sure such awards are in the lime light.
2. Create best ideas of the year booklet and include everyone’s picture name and description of
their best ideas.
3. Feature the quality team of the month and put their picture in a prominent place.
4. Honor peers who have helped you by recognizing them at your staff meetings.
5. Let people attend meetings, committees etc; in your place when you are not available.
6. Involve teams with external customers and suppliers, sending them on appropriate visits to
solve problems and look for opportunities.
7. Invite a team for coffee or lunch at any time, not necessarily when you need them for
something.
8. Create a visibility wall to display information, posters, and pictures, thanking individual
employees and their teams, and describing their contributions.
9. When you are discussing an individual or group ideas with other people, peers, or higher
management make sure that you give them credit.
WHY SHOULD ONE RECOGNISE PEOPLE
1. improve employees morale
2. show the company’s appreciation for better performance
3. create satisfied workplace
4. Create highly motivated workplace.
5. Reinforce behavioral patterns.
6. Stimulate creative efforts.
REWARD
MEANING:
Reward is a tangible one, such as increased salaries, commissions, cash bonus, gain sharing,
etc; to promote desirable behavior.
TYPES OF REWARDS:
1. Intrinsic rewards
2. Extrinsic rewards
Intrinsic rewards are related to feelings of accomplishment of self-worth.
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Extrinsic reward are related to pay or compensation issues.
INTRINSIC REWARDS
1. Non-monetary forms of recognition to acknowledge achievement of quality improvement goals.
2. Celebration to acknowledge achievement of quality improvement goals.
3. Regular expressions of appreciation by managers and leaders to employees to acknowledge
achievement of quality improvement goals.
4. 360 degree performance appraisals feedback from co-workers subordinates to customers is
incorporated into performance appraisals.
EXTRINSIC REWARDS:
1. Profit sharing
2. gain sharing
3. employment security
4. compensation time
5. individual based performance systems
6. quality based performance appraisals
Recognition is a process by which management shows acknowledgement of an employee’s
outstanding performance.
Various ways for Recognition and Rewards are
1. Recognition can be expressed using verbal and written praise.
2. Rewards may be in the form of certificates and plaques.
3. Reward is normally in the form of cinema tickets, dinner for family etc.
4. The financial compensation (for recognition) can be paid in terms of increased salaries,
commissions, gain sharing etc.
5. The efforts of employees can be recognized by promotions, special job assignments etc.
6. A letter of appreciation from the CEO or the Top Management will increase the employee’s
involvement.
7. Reward may be delayed but recognition should be in a timely basis.
8. Rewards should be appropriate to the improvement level.
9. People like to be recognized than any reward.
10. Special forms of recognition include pictures on the bulletin board, articles in news letters, letter
to families etc.
11. Supervisors can give on-the-spot praise for a job which is done well.
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2.27 EFFECTS OF RECOGNITION AND REWARD SYSTEM
1. Recognition and reward go together for letting people know that they are valuable members for
the organization.
2. Employee involvement can be achieved by recognition and reward system.
3. Recognition and reward system reveals that the organization considers quality and productivity
as important.
4. It provides the organization an opportunity to thank high achievers.
5. It provides employees a specific goal to achieve.
6. It motivates employees to improve the process.
7. It increases the morale of the workers.
2.28 PERFORMANCE APPRAISAL
The performance appraisal is used to let employees know how they are performing. The performance
appraisal becomes a basis for promotions, increase in salaries, counseling and other purposes related
to an employee’s future.
IMPORTANCE OF PERFORMANCE APPRAISALS
1. It is necessary to prevail a good relationship between the employee and the appraiser.
2. Employee should be informed about how they are performing on a continuous basis, not just at
appraisal time.
3. The appraisal should highlight strength and weakness and how to improve the performance.
4. Employee should be allowed to comment on the evaluation and protest if necessary.
5. Everyone should understand that the purpose of performance appraisal is to have employee
involvement.
6. Errors in performance evaluations should be avoided.
7. Unfair and biased evaluation will render poor rating and hence should be eliminated.
2.29 BENEFITS OF EMPLOYEE INVOLVEMENT
Employee involvement improves quality and increases productivity because
 Employees make better decisions using their expert knowledge of the process
 Employees are better able to spot and pin-point areas for improvement.
 Employees are better able to take immediate corrective action.
 Employee involvement reduces labour / management friction.
 Employee involvement increases morale.
 Employees have an increased commitment to goals because they are involved.
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2.30 CONTINUOUS PROCESS IMPROVEMENT
Continuous process improvement is designed to utilize the resources of the organization to
achieve a quality-driven culture.
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Improvement is made by
 Viewing all work as process.
 Making all process effective, efficient and adaptable.
 Anticipating changing customer needs.
 Controlling in-process performance using measures such as scrap reduction, control charts
etc.
 Eliminating waste and re-work.
 Eliminating non-value added activities.
 Eliminating non-conformities.
 Using Benchmarking.
 Incorporating learned lessons into future activities.
 Using technical tools such as SPC, benchmarking, experimental design, QFD etc
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PROCESS
Process refers to business and production activities of an organization.
Input / Output Process Model
There are five basic ways for improvement.
 Reduce resources.
 Reduce errors.
 Meet or exceed expectations of downstream customers.
 Make the process safer.
 Make the process more satisfying to the person doing it.
INPUT
Materials,
Money,
Information,
Data, etc.
PROCESS
People,
Equipment,
Method,
Procedures,
Environment,
Materials
OUTPUT
Information,
Data,
Product,
Service, etc.
OUTCOMES
FEEDBACK
CONDITIONS
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2.31 THE PDCA CYCLE :
PROBLEM SOLVING METHOD
1. IDENTIFY THE OPPORTUNITY
 Identify the Problem
 Pareto analysis of external alarm signals.
 Pareto analysis of internal alarm signals.
 Proposals from key insiders.
 Proposals from suggestion schemes.
 Field study of user’s needs.
 Comments of key people outside the organization.
 Customer surveys.
 Employee surveys.
 Brainstorming by work groups.
 Form the Team
 Team should be selected.
 Goals and milestones are established.
 Define the Scope.
Criteria for a good problem statement is as follows
 It clearly describes the problem.
 It states the effect.
 It focuses on what is known, unknown etc.
 It emphasizes the impact on the customer.
2. ANALYZE THE CURRENT PROCESS
The objective is to understand the process and how it is currently performed.
Step 1 : The team to develop a process flow diagram.
Step 2 : The target performance measures are defined.
Step 3 : Collection of all available data and information.
 Form the Team
 Form the Team
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Common items of data and information are
1. Customer information 2. Design information
3. Process information 4. Statistical information
5. Quality information 6. Supplier information
3. DEVELOP THE OPTIMAL SOLUTION(S)
This phase has the objective of establishing potential and feasible solutions and recommending the
best solution to improve the process.
 Creativity plays the major role, and brainstorming is the principal technique.
 There are three types of creativity:
 Create new processes
 Combine different processes
 Modify the existing process
4. IMPLEMENT CHANGES
This phase has the objective of preparing the implementation plan, obtaining approval and
implementing the process improvements.
 Approval of the quality council.
 Obtain the advice and consent of departments, functional areas, teams, individuals etc.
 Monitor the activity.
5. STUDY THE RESULTS
This phase has the objective of monitoring and evaluating the change by tracking and studying the
effectiveness of the improvement efforts.
6. STANDARDIZE THE SOLUTION
 Institutionalize by positive control of the process.
 The quality peripherals – the system, environment and supervision must be certified.
 Operators must be certified.
7. PLAN FOR THE FUTURE
The objective is to achieve improved level of process performance.
 Regularly conduct reviews of progress by the quality council.
 Establish the systems to identify area for future improvements.
 Track performance with respective internal & external customers.
 TQM tools and techniques are used to improve quality, delivery and cost.
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PDSA CYCLE (OR DEMING WHEEL)
The basic Plan – Do – Study – Act cycle was originally developed by Walter A. Shewart. But
it was popularized by Edward Deming and that’s why it is often called the Deming Cycle or Deming
Wheel. It is an effective continuous improvement technique.
The PDSA Cycle
What is PDSA Cycle?
 PDSA stands for Plan, Do, Study, and Act. It is a model for testing ideas that you think may
The PDSA Cycle
What is PDSA Cycle?
The PDSA Cycle
What is PDSA Cycle?
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create improvement.
 It is an extremely practical, common sense based approach that is easy to understand.
 It can be used to test ideas for improvement quickly and easily based on existing ideas,
research, feedback, theory, review, audit, etc.
 It encourages starting with small changes, which can build into large improvements in the
service through successive quick cycles of change.
 Illustrates the PDSA cycle.
Phases of PDSA Cycle
The four phases of PDSA cycle and their descriptions are presented in Table.
Phases of PDSA Cycle
Phases Description
1. Plan  Define the problem
 Analyze the causes and draft an action plan for solving the problem.
 Determine the quality objectives and the critical factors.
 Define the performance indicators.
 Collect and analyze the necessary process data.
 Generate possible solutions
 Select the most feasible solution; and work it out.
2. Do  First, implement the plan on a limited scale or conduct an experiment to test the proposed
improvement. Collection data is hereby essential.
 Train all involved employees in the use of quality improvement methods and techniques.
 Describe the process which is considered for improvement and form project teams to lead
the process.
3. Check  Evaluate the trial project with the performance indicators.
 Verify whether the improvement has been successful or not.
4. Act  Act to implement proven improvements. The choices are: introduce the plan, adjust or
reject it.
 The improvements are documented in standard procedures so all employees are well-
informed on how to handle in future.
 Usually, the cycle will be repeated under the different circumstances and conditions to test
how consistent the results are.
Continuous Process Improvement Cycle Using PDCA
The relationship between the PDSA cycle and eleven steps to continuous process
improvement are illustrated in figure.
Each phase of the PDCA cycle must undergo its own PDCA cycle for further improvements,
as shown in figure.
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Applying PDCA to its phases
Benefits of the PDSA Cycle
The benefits of the PDSA cycle can be experienced in the following areas:
 Daily routine management – for the individual and / or the team.
 Problem-solving process.
 Project management
 Continuous development
 Vendor development
 Human resources development
 New product development
 Process trials
2.32 5-S: HOUSEKEEPING
CLEARING
ARRANGING
SWEEPING
CLEANLINESS
DISCIPLINE
5-S MEANS EVERYTHING IN ITS PLACE
SEIRI
SEITON
SEISO
SEIKETSU
SHITSUKE
 Process trials
CLEARING
ARRANGING
SWEEPING
CLEANLINESS
DISCIPLINE
SEIRI
SEITON
SEISO
SEIKETSU
SHITSUKE
 Process trials
CLEARING
ARRANGING
SWEEPING
CLEANLINESS
DISCIPLINE
SEIRI
SEITON
SEISO
SEIKETSU
SHITSUKE
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 There can be no TQM without 5-S.
 A dirty factory cannot produce quality products.
 Clutter hides problems. A neat workplace promotes easy discovery of abnormalities.
The First S : SEIRI : CLEARING
Factory Floor Office Home
 Machines to be  Used / Broken  Broken toys
scrapped pens
 Rejected material  Useless paper  Old clothes
 Expired goods  Old diaries  Broken suitcases
 Broken tools,  Broken furniture’s
pallets, bins,
trolleys.
 Old notices
Flow Chart :
Separating the wanted and unwanted
Junk & waste Repairable Wanted items
No use Repair
Discard To next step
Consequences of not practicing SEIRI
 The unwanted clutters up the place and the wanted are hard to find.
 Every place can only hold so much.
 Clutter sometimes causes misidentification.
The Second S : SEITON : ARRANGING
Arrange everything in proper order so that it can be
easily picked up for use.
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 Unlabelled tool crib  Unlabelled file cabinet  Clutter
 Cluttered shelves  Cluttered drawer,  No orderly
lockers etc. shelves, book cases, arrangement in
tables the rooms
 Stores – no clear  Records & documents
location system. Not arranged well
 Things on the floor  File heaps and papers
Consequences of not practicing SEITON
 Things are seldom available when needed.
 Items are “lost’ in stores.
 Items – defectives and good ones get mixed up.
 Accidents or near-accidents occur due to clutter.
 Visual control of the shop floor is not possible.
 Sometimes, production is lost because an item required is available but cannot be found.
 In some offices, Critical Excise records or tax records may not be traceable. This can lead to
finance loss, prosecution or embarrassment.
The Third S : SEISO : SWEEPING
 Dirty machines  Dirty table & furniture  Dirty furniture, floor,
 Dust on product window, grills,
parts, R.Mtls. bookshelves.
 Dirty jigs, fixtures  Dirty office equipments
 Dirty walls, roofs  Littered floor
 Littered floor  Dirty windows
Consequences of not practicing SEISO
 Most machines are affected by dust & dirt and hence their performance may go down.
 Dust and dirt on products, materials, packing boxes etc. will affect either their performance
quality or their aesthetic look.
 Unpleasant to work in.
Sweep your workplace thoroughly so that there
is no dust anywhere.
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The Fourth S : SEIKETSU : CLEANLINESS
 Handling hazardous  Free of pests  Pest control
chemicals  Personal hygiene  Personal hygiene
 Control of fumes,
hazardous dust.
 Disinfecting, Personal hygiene
Consequences of not practicing SEIKETSU
 Good health and safety require the practice of Seiketsu.
 Hazardous chemicals, dusty chemicals, fumes etc. can make it a dangerous place to work in.
 Washing thoroughly and cleaning a place makes the workplace pleasant.
 Personal hygiene is essential for healthy workforce.
The Fifth S : SHITSUKI : DISCIPLINE
Consequences of not practicing SEIKETSU
 If discipline is not practiced, then the first 4-S would backslide.
 Lack of Shitsuki means not following the standards. Then, all activities related to safety and
quality will be affected.
2.33 IMPLEMENTING 5-S
1. Top Management resolve and training.
2. Formation of a top level team.
3. Understanding current circumstances.
4. Establishing priorities and targets.
Washing with a strong overtone of keeping things
disinfected as well as free of hazardous chemicals.
Discipline especially with regard to safety rules
and punctuality.
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5. Forming sub-teams and training.
6. Major cleaning.
7. Establishing improvement plans in each priority area.
8. Implementing the plan.
9. Verifying results.
10. Standardizing.
11. Establishing full control.
12. Looking for further improvements.
2.34 KAIZEN
Kaizen is a Japanese word for the philosophy that defines management’s roles in continuously
encouraging and implementing small improvements involving everyone.
It focuses on simplification by breaking down complex progress into their sub – processes and then
improving them.
2.35 KAIZEN WHEEL
The Kaizen improvement focuses on the use of :
 Value – added and non – value work activities.
 Muda, which refers to the seven classes of waste – over-production, delay, transportation,
processing, inventory, wasted motion, and defective parts.
 Principles of motion study and the use of cell technology.
 Principles of materials handling and use of one – piece flow.
 Documentation of standard operating procedures.
 The five S’s for workplace organization.
 Visual management.
 Just – in – time principles.
 Poka – Yoke.
 Team dynamics.
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2.36 SUPPLIER PARTNERSHIP
What is Supplier Partnering?
Partnering is a defined as a continuing relationship, between a buying firm and supplying
firm, involving a commitment over an extended time period, an exchange of information, and
acknowledgement of the risks and rewards of the relationship. The relationship between customer and
supplier should be based upon trust, dedication to common goals and objectives, and an
understanding of each party’s expectations and values.
Benefits of Partnering
The benefits of partnering include:
(i) Improved quality;
(ii) reduced cost;
(iii) Increased productivity;
(iv) Increased efficiency;
(v) Increased market share;
(vi) Increased opportunity for innovation; and
(vii) Continuous improvement of products / services.
Key Elements to Partnering
The three important elements to achieve the customer / supplier partnering relationship are :
1. Long-term commitment: Long-term commitment provides both customer and supplier the much
needed environment to achieve the planned objectives. Because to set up and solve the problem of
continuous improvement, both parties may require the sufficient time.
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2. Trust : Mutual trust between two parties forms the basis for a strong working relationship. Trust
enables the partners to effectively combine their resources and knowledge. It results in a ‘win-win’
situation for both partners.
3. Shared vision : Both the customers and suppliers have the common goal i.e., to satisfy the end
user. In order to ensure this goal, both particles should share and understand their goals and
objectives.
Three types of supplier sourcing are:
o Sole sourcing;
o Multiple sourcing, and
o Single sourcing.
1. Sole Sourcing
Sole sourcing is the use of only one supplier for the organization. The organization does not
have any choice. It is forced to use only one supplier.
This forced situation is because of the following factors : patents, technical specifications, raw
material location, only one organization producing the item, etc.
2. Multiple Sourcing
Multiple sourcing is the use of two or more suppliers for an item.
The basic concept of multiple sourcing is that competition will result in better quality,
lower costs, and better service. (The selection of suppliers from various alternatives is based on their
performance in terms of prices, quality and delivery.
3. Single Sourcing
Single sourcing is the use of one supplier for an item when several sources are available. It
leads to long-term partnering relationship.
The suppliers should be treated as partners to achieve the same quality level as attained within the
organization.
The following forces need Supplier Partnership to improve quality, reduce costs and increase market
share.
 Deming Philosophy (Deming’s 4th
point)
 Just-in-time
 Continuous process improvement
 ISO 9000
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CUSTOMER – SUPPLIER RELATIONS
Dr. Kaoru Ishikawa has given ten principles of customer-supplier relations. They are
1. Both the customer and supplier are fully responsible for the control of quality.
2. Both the customer and supplier should be independent of each other.
3. The customer is responsible for providing the supplier with clear and sufficient requirements so
that the customer can know precisely what to produce.
4. Both the customer and supplier should enter into a non-adversarial contract.
5. The supplier is responsible for providing the quality that will satisfy the customer.
6. Both the customer and supplier should decide the method to evaluate the quality of the product
or services.
7. Both the customer and supplier should establish in the contract the method by which they can
reach an amicable settlement in case of any dispute.
8. Both the customers and supplier should continually exchange information.
9. Both the customer and supplier should perform business activities.
10. Both the customer and supplier should have the best interest of the end user in mind.
2.37 PARTNERING
Partnering is a relationship between two or more parties based upon trust, dedication to common
goals.
The benefits of partnering are
 Improved quality
 Increased efficiency
 Lower cost
 Increased opportunity for innovation
 Continuous improvement
The three key elements to a partnership relationship are
 Long term commitment
 Trust
 Shared Vision
2.38 SOURCING
The three types of sourcing are
 Sole sourcing
 Multiple sourcing
 Single sourcing
2.39 SUPPLIER SELECTION
The suppliers should be selected with the following ten conditions
1. The supplier should understand clearly the management philosophy of the organization.
2. The supplier should have stable management system.
3. The supplier should maintain high technical standards.
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