UNIT I - TOTAL QUALITY MANAGEMENT Total Quality Management (TQM) is an enhancement to the traditional way of doing business. 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. DEFINING QUALITY Quality can be quantified as follows Q=P/E Where Q = Quality P = Performance E = Expectation
DIMENSIONS OF QUALITY : Dimension Meaning and Example Performance the picture Primary product characteristics, such as the brightness of Features control Secondary characteristics, added features, such as remote Conformance Meeting specifications or industry standards, workmanship Reliability unit to fail Consistency of performance over time, average time of the Durability Useful life, includes repair Service Resolution of problems and complaints, ease of repair Response dealer Human – to – human interface, such as the courtesy of the Aesthetics Sensory characteristics, such as exterior finish Reputation ranked first Past performance and other intangibles, such as being QUALITY PLANNING The following are the important steps for quality planning. 1. Establishing quality goals. 2. Identifying customers. 3. Discovering customer needs. 4. Developing product features. 5. Developing process features. 6. Establishing process controls and transferring to operations. IMPORTANT POINTS TO BE NOTED WHILE QUALITY PLANNING : 1. Business, having larger market share and better quality, earn returns much higher than their competitors. 2. Quality and Market share each has a strong separate relationship to profitably.
Visit : 3. Planning for product quality must be based on meeting customer needs, not just meeting product specifications. 4. For same products. We need to plan for perfection. For other products, we need to plan for value. QUALITY COSTS QUALITY COSTS:Q u a l i t y costs are defined as those costs associated with the non- achievement of prodect/service quality as defined by the requirements established by the organization and its contracts with customers and society. Q u a l i t y cost is a cost for poor product of service. ELEMENTS OF QUALITYCOST:C o s t of prevention C o s t of appraisal C o s t of internal failures C o s t of external failures. ANALYSIS OF QUALITY COSTS:T r e n d analysis P a r e t o analysis 1. PREVENTION COST Marketing / Customer / User. Product / Service / Design Development. Purchasing Operations (Manufacturing or Service) Quality Administration. 2. APPRAISAL COST Purchasing Appraisal Costs. Operations Appraisal Costs Visit :
External Appraisal Costs Review of Test and Inspection Data Miscellaneous Quality Evaluations 3. INTERNAL FAILURE COST Product or Service Design Failure Costs (Internal) Purchasing Failure Costs Operations (Product or Service) Failure Costs 4. EXTERNAL FAILURE COST Complaint Investigations of Customer or User Service Returned Goods Retrofit and Recall Costs Warranty Claims Liability Costs Penalties Customer or User Goodwill Lost Sales ANALYSIS TECHNIQUES OF QUALITY COST The purpose of quality cost analysis is to determine the cost of maintaining a certain level of quality. Such activity is necessary to provide feedback to management on the performance of quality assurance and to assist management in identifying opportunities. INDEX NUMBERS : Index Numbers are often used in a variety of applications to measure prices, costs (or) other numerical quantities and to aid managers in understanding how conditions in one period compare with those in other periods.