TOTAL QUALITY MANAGEMENT

Introduction
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

QUALITY COMPONENTS OF QUALITY

MANAGEMENT
"Everybody wants quality, one hardly came ● Quality Control
across someone who does not want quality!" ● Quality Assurance
● Quality Improvement
QUALITY DIMENSIONS OF QUALITY
● Conformance to requirements
● A degree of excellence PRODUCT QUALITY
● The totality of characteristics which act 1. Functionality
to satisfy a need This refers to the core features and
● Fitness for use characteristics of a product.
● Fitness for purpose 2. Reliability
● Freedom from defects This is the indicator of the durability of
● Delighting customers the products.
3. Usability
QUALITY MANAGEMENT This articulates that a product should be
easy to used.
A method for ensuring that all activities 4. Maintainability
necessary for the design, development and This refers to the ease with which a
implementation of a product or service are product can be maintained in the
effective and efficient with respect to the system original condition.
and its performance. 5. Efficiency
It is the ratio of the output to input.
QUALITY
6. Portability
The term quality is defined in ISO (International It is defined as a set of attributes that
Organization for Standardization) 9000 as the bear on the ability to be transferred
degree to which a set of inherent characteristics from one environment to another.
of an object fulfills requirements.
Manufactured products have service quality
QUALITY dimensions including the following:

QUALITY CANNOT BE DELINKED FROM DIMENSIONS EXAMPLE

OUR WHOLE BEING.
1. Performance Will the product do the
intended job?
WHY QUALITY IS IMPORTANT?
● Clients and users expect quality
● Poor quality results in "rework" at 2. Features What does the product
additional cost do?
● Poor quality results in problems that
can be difficult to diagnose and solve 3. Reliability How often does the
● Poor quality can cost lives product fail?
WHY QUALITY IS IMPORTANT FOR 4. Conformance Is the product made
ORGANIZATIONS? exactly as the designer
● Increase productivity and intended?
competitiveness
● Creating a standard of meeting
5. Durability How long does the
customer expectations
product last?
● Enhance business reputation
● Build customer loyalty
6. Serviceability How easy is it to repair
the product?

1
TOTAL QUALITY MANAGEMENT
Introduction
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

7. Aesthetics What does the product 1. Information Cost

look like? costs of acquiring and maintaining data
related to quality and development of
8. Perceived What is the reputation reports on quality performances.
Quality of the company or its 2. Training Costs
product? costs of developing and putting on
quality training programs for employees
SERVICE QUALITY and management
1. Reliability
Ability to perform the promised service APPRAISAL COSTS
with dependable and accurate results. - costs incurred in the process of
2. Assurance uncovering defects
Knowledge and courtesy of employees 1. Inspection and Testing
and their ability to inspire trust and costs of testing and inspecting
confidence. materials, parts, and product at various
3. Tangibles stages and at the end of a process.
Physical facilities, equipment and 2. Test Equipment Costs
appearance of personnel. costs of maintaining equipment used in
4. Empathy testing quality characteristics of
Caring, individualized attention provided products.
by the firm to its customers. 3. Operator Costs
5. Responsiveness costs of time spent by operators to
Willingness to help customers and gather data for testing product quality,
provide prompt service. to make equipment adjustments to
maintain quality, and to stop work to
SERVICE QUALITY assess quality.
QUALITY FAILURE COST
1. Time - costs consequences of poor quality.
2. Timeliness
INTERNAL FAILURE COSTS
3. Completeness
4. Courtesy - costs associated with discovering poor
5. Consistency quality before the product reaches the
6. Accessibility and Convenience customers
7. Accuracy 1. Scrap Costs
8. Responsiveness costs of poor-quality products that must
be discarded, including labor, material,
and indirect costs
COST OF QUALITY 2. Rework Costs
costs of fixing defective products to
Quality affects all aspects of the organization conform to quality specifications
and has a dramatic cost implication. 3. Process Downtime Costs
costs of shutting down productive
COST OF QUALITY
process to fix problem
4. Price-downgrading Costs
"The earlier defects are found, the less costly
costs of discounting poor-quality
they are to correct."
products - that is, selling products as
"seconds"
QUALITY CONTROL COST
EXTERNAL FAILURE COSTS
- costs necessary for achieving high
quality. - costs associated with quality problems
that occur at the customer site
PREVENTION COST 1. Customer Complaint Costs
- costs incurred in the process of costs of investigating and satisfactorily
preventing poor quality from occurring responding to a customer complaint
resulting from a poor-quality product

2
TOTAL QUALITY MANAGEMENT
Introduction
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

2. Product Return Costs

costs of handling and replacing Everyone in the organization should be
poor-quality products returned by focused or oriented
customer
3. Warranty Claims Costs TQM OR TOTAL QUALITY MANAGEMENT
costs of complying with product
warranties ● is a philosophy of management for
4. Product Liability Costs continuously improving the quality of
litigation costs resulting from product products and processes. The idea is
liability and customer injury that the quality of products and
5. Lost Sales Costs processes is the responsibility of
costs incurred because customers are everyone who is involved with the
dissatisfied with poor quality products development and/or use of the products
and do not make additional purchases or services. TQM involves
management, workforce, suppliers,
CUSTOMERS community, and even customers, in
order to meet or exceed customer
Quality is not complete without CUSTOMERS. expectations.
● is a leadership and management
"Customers are the ultimate judge of quality." philosophy, processes, and guiding
WHO ARE THE CUSTOMERS? principles stressing continuous
1. Either Internal or external improvement through people
2. Individual or group of persons or entity involvement and qualitative methods
3. Use, buy , further process, distribute or focusing on total customer
affected by the product satisfaction.
4. The customer is the real "BOSS" ● is a structured management approach
based on the belief that an
WHAT CUSTOMER REQUIRE?
organization’s continuous effort can
● External customers d o not care about contribute to its long-term success.
the process but how they are When every member is dedicated to
"processed" improving the quality of work, it
● To satisfy external customer, internal seamlessly aligns the overall objectives
customer must be satisfied first of a company.
● They do not care about our costs but on ● is the management of total quality
price, delivery, and quality of product which refers to:
● Do not argue with customers, you may 1. Quality of Return to satisfy
win the argument but loses the the needs of the shareholders;
customer 2. Quality of Products and
Services to satisfy the specific
WHAT CUSTOMER REQUIRE?
needs of customers; and
3. Quality of Life (at work and
Satisfy, delight, and surprise your customer
outside work) to satisfy the
Customer
needs of the people in the
● Satisfaction - when customer
organization.
requirement and expectations are
● uses a PDCA cycle for continuous
met
control and improvement of business
● Customer Requirements - these are
outcomes.
stated need and wants
● Customer Delight - when TOTAL
requirement and expectations are ● involvement of all levels in an
exceeded organization
● Customer Surprise - how to keep ● everyone is involved in
customers happy and loyal that they
will always come back

3
TOTAL QUALITY MANAGEMENT
Introduction
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

QUALITY TOTAL EMPLOYEE INVOLVEMENT

● degree of excellence and conformance Just as your business would be nowhere without
to agreed requirements a customer base, it also wouldn’t get very far
● continuously improving the products without a balanced, multi-skilled team either.
and services to customers Employees at every level of the organization are
MANAGEMENT crucial to its success, and this principle is all
● act, art, and manner of planning, about recognizing that.
organizing, leading, and controlling PROCESS CENTRIC
quality Organizations achieve their desired business
● with data and profound knowledge results when related activities and resources are
properly managed. Toyota Motors for example,
PDCA CYCLE made its assembly line more efficient by keeping
Plan - Find and note down opportunities just enough inventories open in order to fulfill
Do - implement the solution customers’ orders. TQM emphasizes the need
Check - Study your findings and observation for improving efficiency, effectiveness and
from your “testing” phase consistency to speed up production process,
Act - Implement or improve the process delivery and/or performance.
PLANNING PHASE STRATEGIC AND SYSTEMATIC APPROACH
It requires individuals to list down action items for TQM creates a standardized system that helps
various challenges or problems. Employees identify, understand and manage interrelated
need to get to the root of the problem(s) and find processes that contribute to an organization’s
solutions through adequate research and data success. It stresses the importance of several
collection. independent processes including the quality of
products, employee satisfaction, consumer
DOING PHASE satisfaction, and better utilization of resources.
In this phase, employees find a solution to the
INTEGRATED SYSTEM
problems they’ve identified. They devise
strategies that address a problem’s source. A A shared vision, including knowledge of and
solution or strategy’s effectiveness depends commitment to principles of quality, keep
upon how well someone has defined a problem everyone in a company connected.
and identified the root cause. CONTINUOUS IMPROVEMENT
CHECKING PHASE A business should always be pushing for
This phase is reserved for analysis. People improvements, because if you’re not, you can
check for a solution’s effectiveness by monitoring bet that your competitors will be. Continual
the progress that’s been made. Assessed data progress is a permanent goal of any successful
becomes an input for the subsequent step in the organization.
PDCA cycle. FACT-BASED DECISION MAKING
ACTING PHASE TQM facilitates a factual approach in
People document their results after meeting their decision-making. Decisions are based on data
goals. They use the cycle’s results to identify and collected from in-depth research and analysis.
address challenges in other fields, Facts, figures and statistics can help anyone
therefore standardizing the TQM method. understand the product/service and marketplace
in detail. Businesses make clear decisions based
PRINCIPLES OF TQM on objective data.
COMMUNICATION
CUSTOMER FOCUS Starting from the foundation to the roof of the
Businesses should understand their target TQM house, everything is bound by a strong
markets or customers. By identifying customers’ mortar of communication. It acts as a vital link
needs, organizations can allocate their resources between all elements of TQM. Communication
for initiatives or strategies that’ll improve means a common understanding of ideas
customer satisfaction. They can find new ways to between the sender and the receiver. The
exceed customer expectations. success of TQM demands communication with

4
TOTAL QUALITY MANAGEMENT
Introduction
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

and among all the organization members,

suppliers and customers.

IN SUMMARY, TQM MEANS…

● Doing the Right thing

● Right time, First time
● Doing it in time all the time
● Always striving for improvement
● Always satisfying customers
Total Quality Management (TQM) refers to a
quest for quality in an organization. There are
three key philosophies in this approach.
1. A never-ending push to improve, which
is referred to as continuous
improvement.
2. The involvement of everyone in the
organization.
3. A goal of customer satisfaction, which
means meeting or exceeding customer
expectations.

TQM CORE VALUES

● Methods and processes are designed
to meet the needs of internal and
external customers.
● Every employees in the company
receives training in quality
● The company promotes cooperation
with vendors, suppliers, and customers
to improve quality and hold down costs.
● Managers measure progress with
feedback based on the data.

IMPORTANCE OF TQM
1. Ensure quality in a company’s products
and services.
2. Customer Satisfaction
3. Increase Revenues
4. Reduce Wastes
5. Induces Teamwork
6. Encourages Innovation

OBSTACLE IN TQM IMPLEMENTATION

● Lack of management commitment
● Inability to change organization culture
● Improper planning
● Lack of continuous training and
education
● Incompatible organizational structure
and individuals and departments
● Ineffective measurement techniques
and lack of access to data and results

5
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

need specialized skills to make use of

GURU the available skilled labor.
By definition, is a good person, a wise person ● Subordinate: align scheduling of
and a teacher. A quality guru should be all of non-critical tasks to support the
these, plus have a concept and approach to constraint.
quality within business that has made a major ● Elevate: invest in training programs to
and lasting impact. upskill existing workers.
The philosophies of quality gurus have played a ● Prevent: Continual Improvement with
pivotal role in shaping the evolution of TQM. the use of performance metrics
Through their qualitative and quantitative THREE GROUPS OF QUALITY GURUS
contributions, they have greatly influenced the
development of contemporary knowledge in the
There have been three groups of gurus since
field of quality. While each guru may have a
the 1940’s:
unique philosophy, they all emphasize the
● Early 1950’s: Americans who took
importance of leadership and commitment from
the messages of quality to Japan
top management as crucial factors for achieving
● Late 1950’s: Japanese who
success. Their common thrust is towards the
developed new concepts in response
concept of continuous improvement of every
to the Americans
output; be it a product or service by removing
● 1970’s - 1980’s: Western gurus who
unwanted variation and improving underlying
followed the Japanese industrial
work processes. Their philosophies and
success
teachings have contributed to our knowledge
and understanding of quality.
WALTER SHEWART (1891 - 1967)
ELIYAHU M. GOLDRATT (1947 - 2011)
● American physicist, engineer at
● An Israel-born physicist who became a Western Electric (1918 to 1924) and
business management guru. statistician at Bell Telephone
● Originator of the Theory of Constraints Laboratories (1925-1956).
(TOC). ● Founder of the modern quality
● Authored several books, mainly on the movement, and an innovator in the
application of theory of constraints to application of statistics to quality.
various manufacturing, engineering, ● His seminal contributions were based
and other business processes. on his work at Bell Telephone
THEORY OF CONSTRAINTS (TOC) Laboratories during the 1920s and the
Is one of the most profound developments in the 1930s and were compiled in two
practical aspect of making organizational books:Economic Control of Quality of
decisions in situations in which constraints exist. Manufactured Product in 1931 and
There are always at least one constraint and Statistical Method from the Viewpoint of
TOC uses by focusing process to identify the Quality Control in 1939.
constraints and restructure the rest of the ● “Grandfather of quality control”
organization around it. Most constraints in an ● Studied randomness and recognized
organization are of their own making. TOC that variability existed in all
brings in the powerful ‘five-focusing step’ manufacturing processes.
methodology to identify the constraints in a SHEWART CYCLE (1920)
company and systematically attach the The Shewhart cycle, also known as the
associated problems. Plan-Do-Study-Act (PDSA) methodology, is a
● Identify: project managers analyze the four-step project management tool for
critical path and identify that the implementing continuous improvement. It
availability of skilled labor is the primary involves managing the effects of variation by
constraint. systematically testing possible solutions,
● Exploit: exploiting the constraint by assessing the results, and implementing the
maximizing the utilization of available ones that have shown to work.
skilled labor. Prioritizing the tasks that

6
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

QUALITY CONTROL CHARTS (1924) final actions such as methodological

Quality control chart is used to identify whether standardization to ensure continuous practice for
the variability in the process is random or due to sustained improvement. The focus is on problem
an assignable cause such as unskilled workers prevention rather than remedies.
or equipment not being calibrated. The emphasis THE DEMING CHAIN REACTION
is on eliminating variability to improve quality. The Deming chain reaction was first presented in
This work created the foundation for statistical 1950 in Japan after World War II. It illustrated
process control measures used today. Shewart’s concept that productivity and quality
improved as variation reduced. His book Out of
W. EDWARDS DEMING (1900-1993) the Crisis (1989) is considered a quality classic.
● American engineer, statistician, Deming identified seven deadly sins affecting
professor, author, lecturer, and quality:
management consultant. 1. Lack of constancy of purpose
● “Father of quality control” 2. Emphasis on short-term profits
● Initiated a transformation in the 3. Over-reliance on performance
Japanese manufacturing sector in the appraisals
aftermath of World War II, which 4. Mobility of management
enabled it to become a big player in the 5. Overemphasis on visible figures
world market. 6. Excessive medical costs for employee
● Widely acknowledged as the leading healthcare
management thinker in the field of 7. Excessive costs of warranty and legal
quality. costs
● The Deming Prize, the highest award DEMING’S 14-POINT METHODOLOGY
for quality in Japan, is named in his Deming's 14-Point Methodology is rooted in his
honour. Theory of Profound Knowledge and offers a set
● Known for his 14 Points (a new of management practices aimed at enhancing
philosophy for competing on the basis quality and productivity within companies.
of quality), for the Deming Chain 1. Constancy of purpose: long-term
Reaction and for the Theory of thinking and planning approach that
Profound Knowledge. aligns the organization's actions with its
● Modified the Shewhart PDSA (Plan, Do, vision, mission, and values.
Study, Act) cycle to what is now 2. The new philosophy: Adopting new
referred to as the Deming Cycle (Plan, philosophy towards continuous
Do, Check, Act). improvement.
THE DEMING CYCLE: PDCA CYCLE 3. Cease dependence on inspection:
The "Deming cycle”, also known as the PDCA Eliminate mass inspection by building
(Plan-Do-Check-Action) cycle, is a crucial quality product in the first place.
quality control tool for continuous improvement. 4. End lowest tender contracts:
It was originally conceived by Walter Shewart Choosing quality suppliers over lowball
and later adopted by W. Edwards Deming. The price tags.
PDCA cycle consists of four repetitive steps: 5. Improve every process: Constantly
Plan, Do, Check, and Act. Deming emphasized improve every process involved in the
the constant interaction among the stages of stages of planning, production, and
Design, Production, Sales, and Research for a service.
company to achieve better quality that satisfies 6. Institute training on the job: Institute
customers. He advocated for the rotation of modern methods of training on the job,
these stages with quality as the critical criterion. including management to make
maximum use of all employees.
The PDCA cycle begins with a study of the 7. Institute leadership: responsibilities of
current situation and data gathering to formulate managers and supervisors must be
an improvement plan. The plan is then changed to emphasize quality rather
implemented and checked for anticipated than quantity.
improvement. Successful experiments lead to 8. Drive out fear: Encouraging effective
communication.

7
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

9. Breakdown barriers: Lowest positions ● Quality must be planned

to top management should be able to ● There are no shortcuts to quality
work together. ● Use problems as sources of
10. Eliminate exhortations: Eliminate the improvement
use of posters and slogans demanding JURAN'S FORMULA
zero defects and a new level of 1. Build an awareness regarding the need
productivity from the workforce, without and offer an opportunity for
providing proper methods. improvement
11. Eliminate arbitrary numerical targets: 2. Set goals for improvements
Eliminate work standards that prescribe 3. Organize paths to reach the goals
numerical quotas to avoid focusing on (establish a quality council, identify
quantity over quality. problems, select projects, appoint
12. Permit pride of workmanship: teams, designate facilitators, etc.)
abolition of the annual merit rating 4. Provide training
(appraisal of performance). 5. Carry out projects to solve problems
13. Encourage education: Institute a 6. Report progress
vigorous programme of education and 7. Give recognition
encourage self-improvement. 8. Communicate results
14. Top management’s commitment: 9. Keep score
clearly defined commitment by the top 10. Maintain momentum by making annual
management to constantly improve improvements part of the regular
quality and productivity. systems and processes of the company
The Gist of this 14-point methodology is for the
management to: support its employees in all ARMAND FEIGENBAUM
aspects, providing trainings, focus on quality
over quantity, and changing the mentality of both ● Created the idea of total quality
employees and its superiors. management in his book called “Quality
Control-Principles, Practice, and
JOSEPH JURAN (1904-2008) Administration (1961)” and his article
“Total Quality Control (1956)”.
● Helped the Japanese in the ● Company Wide Quality Control in
reconstruction process after World War Japanese.
II ● Total Quality Management (TQM) in the
● Known as the editor of the “Quality US and elsewhere.
Control Handbook (1951)” ● Classified quality costs as costs of
● Introduced the Quality Trilogy: prevention, appraisal and internal and
○ Quality planning provides a external failures.
system that is capable of
meeting quality standards. THREE STEPS TO QUALITY
○ Quality control is used to 1. Quality Leadership - This is visible
determine when corrective when management focuses on sound
action is required. planning rather than reacting to failure.
○ Quality improvement seeks Management must maintain a
better ways of doing things. consistent focus and lead the quality
effort.
JURAN’S QUALITY TRILOGY
2. Modern Quality Technology -
Juran created the concept of the quality triad to Traditional quality development
promote continuous improvement in the process. procedures cannot solve 80 to 90
The components of the trilogy include quality percent of quality issues. The work
planning, quality improvement, and quality requires the collaboration of office staff,
control. engineers, and shop-floor workers who
Juran delivered the following message about are always evaluating and
quality: implementing innovative techniques to
● Quality control must be an integral part please clients in the future.
of management
● Quality is no accident

8
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

3. Organizational Commitment - ● He pioneered the use of quality circles

Continuous training and and championed the use of quality tools
encouragement of the entire staff, as to understand the root causes of
well as the integration of quality into the problems.
business planning stage, indicate the ● He developed one of those tools, the
importance of quality and gives the cause-and-effect diagram, which is also
means for incorporating it into all referred to as the Ishikawa diagram or
aspects of the organization's activities. the fishbone diagram
KEY ELEMENTS OF FEIGENBAUM’S KEY ELEMENTS OF HIS PHILOSOPHY
PHILOSOPHY OF QUALITY CONTROL 1. Quality begins with education and ends
1. Total quality control refers to a system with education
of integrating quality development, 2. The first step in quality is to know the
maintenance and improvement efforts customers’ requirements
in an organization that will enable 3. The ideal state of quality control occurs
engineering, marketing, production and when inspection is no longer necessary
service to function at optimal economic 4. Remove the root cause, not the
levels while achieving customer symptoms
satisfaction. 5. Quality control is the responsibility of all
2. The “control” aspect of quality control workers and all divisions
should involve setting quality standards, 6. Do not confuse means with the
appraising performances relative to objectives
these standards, taking corrective 7. Put quality first and set your sights on
action when the standards are not met long-term profits
and planning for improvement in the 8. Market is the entrance and exit of
standards. quality
3. Factors that affect quality can be 9. Top management must not show anger
divided into two major when facts are presented by
categories—technological and human. subordinates
The human factor is the more critical 10. Ninety-five per cent of problems in a
factor. company can be solved with simple
4. Operating quality costs can be divided tools for analysis and problem solving
into four categories: Prevention costs, 11. Data without dispersion information
appraisal costs, internal failure costs (variability) are false data
and external failure costs.
5. It is important to control quality at the GENICHI TAGUCHI
source. ● Known as a Japanese quality expert for
KAORU ISHIKAWA his work in the area of product design.
● Estimated that 80% of all defective
● Known as the “father or quality circles”. items were caused by poor design.
● Ishikawa advocated the following ● He emphasized that organizations
principles: should focus their quality efforts on the
○ Quality is a company-wide design stage, because it was much
issue and must wield an cheaper and easier to make
all-pervasive influence on the adjustments at this point than
way every issue of business is later.throughout the production process.
conducted. DESIGN EXPERIMENTS
○ Seven simplified tools of Taguchi is well-known for adjusting the concept
quality control need to be used of design of experiments to product design. This
by all the people in an Method is an engineering methodology that
organization. focuses on producing resilient design that allows
○ Quality circles. items to function under a variety of
● Kaoru Ishikawa is credited with circumstances.
developing the idea of company-wide
quality control in Japan.

9
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

TAGUCHI’S APPROACH SHINGO’S KEY TEACHINGS

1. Identify the main functions, side effects 1. Shingo’s Theory of JIT (Just In Time)
and failure modes. - A philosophy of manufacturing based
2. Identify noise factors and the testing on planned elimination of all waste and
conditions for evaluating loss of quality. continuous improvement of productivity.
3. Identify the quality characteristics to be It encompasses the successful
observed and the objective functions to execution of all manufacturing activities
be optimized. required to produce a final product,
4. Identify the control factors and their from design engineering to delivery and
alternate levels. including all stages of conversion from
5. Design the matrix experiment and raw material onward. The primary
define the data analysis procedure. elements include having only the
6. Conduct the matrix. required inventory when needed; to
7. Analyse the data, determine optimum improve quality to zero defects; to
levels for the control factors and predict reduce lead time by reducing setup
performance under these levels. times, queue lengths and lot sizes; to
8. Conduct the verification experiment and incrementally revise the operations
plan future actions themselves; and to accomplish these
QUALITY CHARACTERISTIC things at minimum cost.
Quality characteristic (QC) refers to the 2. Shingo’s Theory of SMED (Single
measured results of an experiment. Quality Minute Exchange of Dies) -
control might be based on a single criterion (e.g. Developed in order to reduce the fixed
pressure, temperature, efficiency, hardness, costs associated with the setup and
surface polish) or a combination of multiple changeover of dies, which is a
criteria in a single index. Quality control specialized machine tool used in
encompasses performance objectives like manufacturing industries to cut and/or
"bigger is better," "smaller is better," or "nominal form material to a desired shape or
is the best." profile. The basic concept is to reduce
the setup and changeover time of dies.
TAGUCHI’S QUALITY LOSS FUNCTION The approach is typically done by
● Taguchi defines quality as the societal separating that time into internal and
damage incurred by producers and external setups, then converting all
consumers since the product's possible internal setups to external
conception. The lower the value of this setup, and streamlining that process.
social loss, the greater the product is This leads to lower costs due to less
highly desirable. equipment downtime, and smaller batch
● The quality loss function (QLF) is a sizes, which can also lead to more
method for measuring quality. This frequent and easy product changes,
financial indicator assesses customer more flexible scheduling, and lower
discontent with a product's performance inventory levels.
as it deviates from expectations of the 3. Shingo’s Theory of ZQC (Zero
target value. Quality Control) - A technique that
● Taguchi's QLF theory calculates the makes use of 100% inspections done at
loss to society caused by a product's the source instead of sampling
inability to attain its goal value due to inspections, immediate feedback from
specific performance characteristics. successive quality checks and
This loss can be of three types: self-checks, and Poka-yoke (avoid
mistakes/error prevention) designed
DR. SHINGO SHIGEO (1909 - 1990) manufacturing devices. It puts
● One of the greatest contributors to emphasis on targeting the root cause of
modern manufacturing practices. defect whenever it occurred, thereby
● His teachings and principles have virtually eliminating the need for
formed the backbone of efficient statistical process control. The equation
engineering practices. that represents this technique would be

10
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

Poka-yoke Techniques to Correct Defects + 3. The Performance Standard - Zero

Source Inspection to Prevent Defects = Zero defects.
Quality Control 4. The Measurement - The price of
THE SHINGO PRIZE FOR OPERATIONAL non-conformance to requirements, not
EXCELLENCE quality indices.
The Shingo Prize for Operational Excellence was CROSBY’S 14 STEPS
established in 1988 to promote awareness of 1. Management commitment: To clarify
lean manufacturing concepts and to recognize the management’s stand on quality.
companies that achieved world-class 2. Quality improvement team: To run the
manufacturing status around the globe. quality improvement programme
3. Quality measurement: To display
MASAKI IMAI (1930 - 2023) current and potential non-conformance
● Japanese organizational theorist and problems in the manner that permits
quality management consultant, known objective evaluation and corrective
for his work on quality management, action.
specifically on Kaizen. 4. Cost of quality: To define the
● Founded Cambridge Corp., an ingredients of the cost of quality, and
international management and explain its use as a management tool.
executive recruiting firm based in 5. Quality awareness: To provide a
Tokyo. method of raising personal concern
● Served as President of the Japan among the personnel in the company
Federation of Recruiting and towards the conformance of the product
Employment Agency Associations. and service, and the reputation of the
company on the issue of quality.
CONTRIBUTIONS 6. Corrective action: To provide a
● Assisted more than 200 foreign and systematic method of resolving the
joint-venture companies in Japan in problems identified through actions
fields including recruiting, executive taken previously.
development, personnel management 7. Zero defects planning: To examine
and organizational studies. the various activities that must be
● Established the Kaizen Institute to help conducted in preparation for formally
Western companies introduce Kaizen launching the zero defects programme.
concepts, systems and tools. 8. Supervisor training: To define the type
● Authored two Kaizen Quality Books: of training that supervisors need in
○ Kaizen: The Key to Japan’s order to actively carry out their roles
Competitive Success with regard to the quality improvement
○ Gemba Kaizen programme.
9. Zero defects day: To create an event
PHILIP CROSBY (1926 - 2001) that will let all employees realise,
● Published the book “Quality is Free through a personal experience, that
(1979)”. there has been a change.
● He established the Absolutes of Quality 10. Goal setting: To turn pledges and
Management, which states that the only commitments into action by
performance standard (that makes encouraging individuals to establish
sense) is zero defects, and the basic improvement goals for themselves and
elements of improvement. their groups.
● The essence of Crosby’s teachings is 11. Error cause removal: To give
contained in what he calls the “four individual employees a method of
absolutes of quality. communicating to the management, the
Four Absolutes of Quality: situations that make it difficult for
1. The Definition - Quality is conformance employees to meet the pledge to
to requirements, not goodness. improve.
2. The System - Prevention, not appraisal. 12. Recognition: To appreciate those who
participate.

11
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

13. Quality councils: To bring together

professionals in the domain of quality TQM PHILOSOPHY
for planned communication on a regular Total Quality Management (TQM) is a business
basis with the workforce and approach that critically evaluates the workforce,
management alike. not only the products and services a company
14. Do it over again: To emphasize that offers, including the processes employed to
the quality improvement programme produce them, ensuring it fully satisfies the
never ends requirements of the customer. The term “total”
denotes its all-encompassing approach,
SUMMARY including all company operations, processes,
and personnel across all levels at all times.
Walter A. Shewart TQM is a management philosophy that aims to
● Contributed to the understanding of integrate all organizational functions, such as
process variability marketing, finance, design, engineering,
● Developed the concept of statistical production, and customer service, to fulfill
control charts customer needs and achieve organizational
W. Edwards Deming objectives. It is not only a strategy but a
● Stressed management’s continuous journey crucial for achieving
responsibility for quality competitive advantage through continuous
● Developed “14 points” to guide improvement of every aspect of organizational
companies in quality improvement operations.
Joseph M. Juran
● Defined quality as “fitness for use” EVOLUTION OF TQM
● Developed the concept of cost of
quality
● Introduced the quality trilogy
Armand V. Feigenbaum
● Introduced the concept of total
quality control
Kaoru Ishikawa
● Developed the cause-and-effect
diagram
● Proponent of the implementation of
quality circles
● Identified the concept of “internal
customer”
Genichi Taguchi
● Focused on robust design by
applying a concept called design of
experiments
● Developed the Taguchi loss function
Shigeo Shingo
● Just in time INSPECTION-BASED
● Single minute exchange of dies The quality movement started back in the late
● Zero quality control 1200s in Europe with craftsmen forming guilds.
Masaaki Imai By the mid-1750s in Great Britain, as factories
● Kaizen, Gemba Kaizen popped up and the Industrial Revolution kicked
Philip B. Crosby off in the early 1800s, the focus on inspecting
● Coined the phrase “quality is free” products to ensure quality began. Initially,
● Introduced the concept of zero workers or craftsmen would check each other’s
defects work to decide if it was good enough. But as
● Four absolutes of quality factories grew, they started hiring specific people
management just to inspect products.
However, this led to several issues:

12
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

● Complex technical problems arose that TOTAL QUALITY MANAGEMENT

the regular production workers couldn’t Total quality management (TQM) originated in
solve. the United States as a response to Japan's
● Not all inspectors were properly trained. quality revolution after World War II. Influential
● Sometimes, inspectors were pressured figures like Joseph M. Juran and W. Edwards
to approve faulty goods to keep Deming emphasized improving all organizational
production numbers up. processes rather than just inspection.
● As skilled workers were promoted, the The term "total quality" was first used at an
less skilled were left to handle the main international conference in Tokyo in 1969 by
manufacturing tasks, affecting quality. Feigenbaum, who highlighted broader issues like
SYSTEM OF QUALITY CONTROL planning and management responsibility.
The evolution of the quality control system can Ishikawa emphasized "company-wide quality
be traced back to the 1920s when statistical control," involving all employees. By the 1970s,
theory was first applied to quality control, leading US industries faced competition from Japan,
to the development of modern control charts by leading to the adoption of TQM, which focuses
Shewart. However, these techniques were not on overall organizational performance and
widely used in manufacturing until the late process improvement. In the 21st century, TQM
1940s. In the 1950s, Japan, facing industrial has evolved into holistic frameworks globally,
challenges, embraced quality management such as the EFQM model in Europe and the
practices with the help of quality gurus like Malcolm Baldrige National Quality Award in the
Juran, Deming, and Feigenbaum. By the 1960s, USA, aimed at achieving excellent performance
quality control and management became a and customer relations.
crucial aspect of Japanese philosophy.
Quality control works in tandem with quality KEY PRINCIPLES OF TQM
assurance, with the aim of ensuring planned These principles, as outlined by the International
quality is achieved. In the late 1960s and early Organization for Standardization (ISO), serve as
1970s, Japan's quality products gained global a framework for creating a quality work culture
recognition, leading to increased imports into the and implementing quality management
US and Europe. Meanwhile, by 1982, Britain's effectively.
world trade share was declining, prompting the 1. Customer-focused organization:
launch of the National Quality Campaign in 1983, Organizations should understand and
emphasizing the importance of quality for exceed customer expectations by
competitiveness and survival in the global identifying needs, designing products
market. The British Standard (BS) 5750 for accordingly, and delivering them with
quality systems, published in 1979, played a excellent service.
central role in this campaign. 2. Leadership: Senior leaders must set
QUALITY ASSURANCE clear quality values, expectations, and
The ISO 9000 standard, developed by the strategies, fostering employee
International Organization for Standardization, is participation, innovation, and learning.
globally used for quality management systems. It 3. Involvement of people: Engaging
includes various standards detailing the employees at all levels maximizes their
implementation, documentation, and potential contribution to the
maintenance of a high-quality framework. organization.
Introduced in 1987, the goal was to accurately 4. Process approach: Managing
document the requirements of the quality resources and activities as processes
management system to ensure customer leads to more efficient outcomes.
satisfaction. The standards underwent revisions 5. Systems approach to management:
in 1994 and 2000, incorporating feedback from Understanding and managing
thousands of businesses to enhance the interrelated processes enhances
guidelines. Overall, the aim of these guidelines is organizational effectiveness and
to ensure quality. efficiency.
6. Continuous improvement:
Organizations should strive for

13
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

continual improvement to meet the BUILDING BRICKS

needs of all stakeholders. Leadership, teamwork, and training serve as the
7. Factual approach to building blocks of TQM, with leaders setting a
decision-making: Effective decisions vision, teams driving continuous improvement,
should be based on data and ad.
information analysis. ● Leadership: This is crucial for TQM
8. Mutually beneficial supplier success. Leaders inspire their teams,
relationships: Collaborative set a clear vision, and drive towards
relationships with suppliers create value goals relentlessly. TQM initiatives must
for both the organization and its be led by top management.
suppliers ● Teamwork: Teams play a key role in
TQM by continuously improving
ELEMENTS OF TQM processes and operations. There are
different types of teams in TQM, such
as problem-solving teams, quality
improvement teams, and natural work
teams, each with its own purpose and
structure.
● Training: Training is vital for employees
to be highly productive. They need to
learn interpersonal skills, teamwork,
problem-solving, decision-making, and
technical skills. Supervisors provide
training to ensure employees become
effective contributors to the company.
BINDING MORTAR
Communication acts as the vital link between all
TQM elements, ensuring effective interaction
within the organization
● Communication: This serves as the
glue that holds all TQM elements
FOUNDATION together, from the foundation to the
Ethics, integrity, and trust form the foundation of roof. It is essential for TQM to function
TQM, fostering openness, fairness, and effectively in an organization.
participation throughout the organization. Communication channels must be
● Ethics: This involves following both credible and easily understood by all
written and unwritten codes of members.
principles and values within a company. ○ Downward communication:
It's about knowing the difference This is when information flows
between right and wrong and choosing from higher levels of
to do what is right. management to lower levels.
● Integrity: Integrity means being ○ Upward communication:
consistent in actions, values, methods, Lower-level employees
and outcomes. It involves honesty and provide feedback and
truthfulness in one's actions suggestions to upper
● Trust: Trust is essential for creating a management about the effects
cooperative environment within an of TQM. Supervisors must
organization. It comes from integrity listen attentively and
and ethical behavior and fosters incorporate employee insights
participation, empowerment, and to build trust and empower
commitment. Trust is crucial for them.
continuous improvement and ensuring ○ Lateral communication: This
customer satisfaction. type of communication breaks
down barriers between

14
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

departments and facilitates variability within processes by addressing both

professional interactions with special and common causes of variation.
customers and suppliers. It 4. Measurement
promotes collaboration and To improve, it's essential to measure current
smooth operations within the performance. Quality of outputs can be
organization. measured using seven generic ways, in addition
ROOF to the cost of quality:
Recognition is the final element of TQM and can - Defects: Work not meeting
have a significant impact on self-esteem, specifications.
productivity, and quality. Recognizing - Rework: Work requiring correction.
contributions leads to greater internal customer - Scrap: Work discarded.
satisfaction, which ultimately results in external - Lost items: Work repeated.
customer satisfaction. - Backlogs: Work falling behind schedule.
● Recognition: It is important to - Late deliveries: Work delivered after
acknowledge both suggestions and agreed time.
achievements, whether from teams or - Surplus items: Work not needed.
individuals. Supervisors play a crucial 5. Synergy in Teamwork
role in providing recognition to their The concept of synergy in teamwork, where the
employees. whole exceeds the sum of its parts, is crucial in
TQM. It fosters collaboration, consensus,
CORE CONCEPTS OF TQM creative conflict, and team success. Teams in
TQM can combine diverse qualities needed for
1. Customer Satisfaction modern business. Teamwork enables individuals
TQM prioritizes meeting customer requirements to collaborate and achieve quality improvement
by listening to their needs and fulfilling together. Working alone or in small groups often
agreements. Both internal and external leads to a narrow understanding of
customers are equally important, and companies organizational work and its impact. By bringing
must understand what is important to them to people together in teams focused on quality
match performance with expectations. improvement, communication barriers are
Forward-thinking companies conduct surveys to broken down, facilitating change. Teams also
gauge customer satisfaction and address any function as task forces, tackling cross-functional
issues, aiming to improve overall customer problems and adopting new approaches. Quality
satisfaction by monitoring product quality and circles and improvement tools aid in building
addressing areas of concern. effective teams within organizations.
2. Internal Customer Satisfaction 6. People Make Quality
Internal customer satisfaction refers to meeting "People Make Quality" emphasizes that quality
the needs of individuals within a company who problems in organizations often stem from
receive and contribute to products or services systemic issues rather than individual employee
before passing them on. Establishing successful errors. Managers must ensure that the
internal relationships is crucial for satisfying necessary conditions are in place for employees
external customers. When internal customer to produce quality work. By creating an
requirements are met, a chain of quality is environment where employees take
established that ultimately benefits external responsibility for their work quality, organizations
customers. Just like external customers, internal can unlock the talents of everyone and foster a
customers also require speed, efficiency, and culture of quality improvement.
accuracy, making them a key focus for 7. Continuous Improvement Cycle
improvement within organizations. This involves establishing, meeting, and
3. All work is a process measuring customer requirements, as well as
"All Work is Process" emphasizes the ongoing improvement efforts. This cycle can
importance of business processes as a focus for drive quality improvements both internally and
improvement. A process involves methods, externally. By repeatedly using this cycle,
materials, manpower, and machines working organizations can cultivate a culture of
together to produce a product or service. To continuous improvement, leading to positive
improve quality, organizations aim to reduce changes in organizational culture and per8.

15
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

8. Prevention processes, treating them as valuable assets in

Prevention is a core principle of TQM, aiming to achieving organizational agility and performance.
achieve defect-free work consistently, also It employs structured approaches,
known as "right first time, every time" or zero methodologies, metrics, and software tools to
defects. This is accomplished through a focus on manage and optimize an organization's activities
prevention, utilizing measurement, process and processes effectively.
controls, and data-driven waste and error
elimination. Prevention serves as a goal for Quality Control Circles (QCC): Originating in
continuous improvement, with quality assurance Japan during the 1950s, QCC involves small
efforts aimed at preventing quality problems groups of staff collaborating to contribute to
through planned and systematic actions such as enterprise improvement while respecting human
documenting work processes and conducting dignity and fostering positive work environments.
cost of quality audits.formance. QCC activities aim to unleash the full potential of
individuals through problem identification,
TQM EXCELLENCE MODEL (TQMEX) analysis, and resolution, thereby enhancing
overall organizational quality and performance.

Seven Quality Control Tools: Developed by

Prof Karou Ishikawa, these tools offer effective
means of collecting, presenting, and analyzing
data to derive insights and solutions. The seven
tools—process flowcharts, check sheets,
histograms, Pareto analysis, cause-and-effect
analysis, scatter diagrams, and control
charts—are widely utilized in quality control
initiatives to enhance product quality and service
improvement.

Quality Management Systems: The

International Organization for Standardization
JAPANESE 5-S PRACTICE (ISO) serves as the global body for
Originating from Japan, the 5-S practice is standardization, fostering the development of
foundational to creating a total quality standards across various domains. ISO
environment. It emphasizes cleanliness and standards, including the ISO 9000 series, play a
orderliness within workplaces, often leading to crucial role in promoting quality management
Japanese factories being lauded as "parlors" for practices worldwide, ensuring consistency and
their immaculate conditions. The 5-S technique reliability in organizational processes and
not only fosters a conducive work environment outcomes. Unlike product standards, these focus
but also aims to facilitate international trade and on the operational aspects of maintaining quality.
collaboration across intellectual, scientific, The widespread adoption of ISO 9000 reflects its
technological, and economic domains significance in ensuring consistent quality
management practices across diverse industries
and geographies.

Total Productive Maintenance (TPM): TPM, as

defined by the Japan Institute of Plant
Maintenance (JIPM), encompasses a
comprehensive maintenance system covering
the entire equipment lifecycle across various
Business Process Management (BPM): BPM divisions. It emphasizes maximizing productivity
is portrayed as a holistic management discipline by involving all stakeholders, from top executives
aimed at enhancing business process efficiency. to shop floor workers, in promoting equipment
It leverages technological advancements to drive efficiency and safety. TPM aims to minimize
innovation, flexibility, and operational efficiency. equipment stoppages, enhance capability, and
BPM focuses on continuously improving

16
TOTAL QUALITY MANAGEMENT
Quality Gurus and TQM Philosophy
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

improve safety and environmental factors, 2. Form a TQM center to plan, manage,
ultimately contributing to better quality and and train employees.
profitability. 3. Select appropriate TQM methods based
on organizational needs and climate.
TQM VS. TRADITIONAL ORGANIZATIONS 4. Equip employees with the necessary
knowledge of TQM tools and
problem-solving.
5. Foster a culture focused on customer
satisfaction and continuous
problem-solving.
6. Engage in sustained company-wide
TQM activities rather than one-time
projects.

COMMON BARRIERS TO THE

IMPLEMENTATION AND DEVELOPMENT
OF TQM PROGRAMME
Prerequisites for TQM: Successful TQM
implementation requires several key
considerations:
1. Management must prioritize TQM and
accept responsibility.
2. Top management needs to overcome
internal obstacles.
3. TQM involves all employees, not just a
select few.
4. Adequate resources - including people,
time, money, and effort - must be
dedicated over time.
5. Management's commitment must be
demonstrated through actions, not just
words.
6. Managers must shift from controlling
employees bureaucratically to
encouraging their initiative and
involvement.
7. Creating a quality environment
demands significant effort from top
management, including behavioral
changes, skill-building through training
and communication, and timely actions
to sustain the effort.
TQM Implementation Steps: Implementing TQM
requires careful planning and management:
1. Establish a corporate TQM steering
committee and unit-level TQM council
involving senior management.

17
TOTAL QUALITY MANAGEMENT
Quality Improvement Tools
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

representation allows us to easily see the

QUALITY CONTROL TOOLS relative importance of problems or conditions.
In 1950, Joseph M. Juran rephrased the theories
There are seven basic quality tools that can of the Italian economist Vilfredo Pareto
assist organizations in problem solving and (1848–1923), which form the basis of the Pareto
process improvements. These tools were principle. This principle is often referred to as the
proposed by Dr. Kaoru Ishikawa, father of 80-20 Rule. Pareto analysis is a statistical
Quality Control Circles (QCCs), in 1968, in his technique used in decision-making to select a
book "Gemba no QC Shuho." The book focuses limited number of tasks that have a significant
on managing quality through techniques and overall effect. The Pareto effect also applies to
practices for Japanese firms. It was intended for quality improvement. According to this effect,
self-study, employee training by foremen, and 80% of problems usually arise from 20% of the
QC reading groups in Japan. causes. This is also known as the theory of the
QCCs originated in Japan in the 1950s. A QCC vital few and the trivial many. This chart can be
is a small group of staff members who work used in the following:
together to enhance the overall performance of 1. To determine the relative importance of
the organization, promote respect for one problem causes.
another, and create a positive work environment 2. To assist teams in identifying the
by tapping into the infinite potential of the team causes that will have the greatest
members. impact once resolved.
The basic concepts of QCC activities, as part of 3. To quickly calculate the impact of a
the company-wide quality control efforts, are as defect on production.
follows: Some examples of using the Pareto chart in
1. To contribute to the improvement and real-life scenarios:
development of the enterprise. 1. 20% of the staff produces 80% of the
2. To respect humanity and create profits.
meaningful lives and joyful work areas. 2. 20% of defective systems cause 80% of
3. To recognize and nurture human the issues in operations.
capabilities to unleash everyone's 3. 20% of the products result in 80% of the
infinite potential. revenue.
Ishikawa claimed that these tools can effectively
address 95% of all issues, and they have played
a pivotal role in Japan's impressive industrial
recovery following World War II. These tools are
extensively utilized for monitoring operations and
continually enhancing the manufacturing
process.
As a result, a research team was formed to
develop seven new quality control tools,
commonly referred to as the seven
Management and Planning (MP) tools or
simply the seven management tools.

SEVEN STATISTICAL TOOLS

PARETO CHART
The Pareto chart, also known as the Pareto
diagram, can be either a weighted Pareto chart
or a comparative Pareto chart. It is a special type
of bar graph where the length of the bars
represents the frequency or cost (time or
money). The bars are arranged in descending Application of the Pareto Chart
order, with the longest bars on the left and the The Pareto chart is a crucial tool in total quality
shortest bars on the right. This visual control and Six Sigma. However, reaching a
consensus within a team can be challenging due

18
TOTAL QUALITY MANAGEMENT
Quality Improvement Tools
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

to differing opinions, resulting in divergent

courses of action. The Pareto chart helps to
address this issue by allowing teams to focus on
critical factors. It has multiple potential uses in
decision-making, including:
1. Determining the relative frequency of
occurrence categories,
2. Identifying the 20% of sources
Applications of the Cause-and-effect Diagram
responsible for 80% of errors,
A cause-and-effect diagram is a useful tool for
3. Assessing the relative costs associated
identifying potential causes of a problem.
with different types of defects, and
Collective brainstorming is effective in preventing
4. Determining which category or
a team's thinking from becoming stagnant.
categories should be the primary focus
of improvement efforts. CHECK SHEET
Check sheets are also known as defect
concentration diagrams. It is a structured and
prepared form used for collecting and analyzing
data. This tool is versatile and can be adapted
for various purposes. The main function of a
check sheet is to present information in an
efficient and graphical format. This can be
achieved by simply listing items.
This sheet helps identify all possible errors and
provides the flexibility to add more sources of
error based on practical experience. It is then
used to record data about the errors, which are
CAUSE-AND-EFFECT DIAGRAM eventually analyzed to address the operational
issue.
During World War Two, a rumor circulated in
Japan that Ichiro Ishikawa originated the
Fishbone Diagram in 1943. However, reports
published after this date claim that it was his son,
Professor Kaoru Ishikawa, who created it in the
1960s. Even today, there is still some uncertainty
regarding the true inventor of the Fishbone
Diagram between the father and son duo.
The cause-and-effect diagram, also known as
the fishbone diagram or the Ishikawa diagram,
was created by Kaoru Ishikawa. It helps identify
numerous potential causes for a problem or an
effect, making it useful for organizing a
brainstorming session. By categorizing ideas, it
provides immediate structure. This diagram is
employed to investigate all the possible causes
(or inputs) that lead to a specific effect (or
output). Applications of a Check Sheet:
1. To distinguish between fact and opinion,
such as understanding how the
community perceives the effectiveness
of a school in preparing students for the
world of work.
2. To collect data on the frequency of a
problem occurring, for instance,
determining how often students are
missing classes.

19
TOTAL QUALITY MANAGEMENT
Quality Improvement Tools
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

3. To gather data on the specific types of 2. Double-peaked distribution

problems that occur, such as identifying 3. Plateau distribution
the most common word-processing 4. Comb distribution
errors committed by students, such as 5. Skewed distribution
grammar, punctuation, transposing Applications of Histogram
letters, and so on. A histogram can be used:
4. When data can be consistently 1. When the data are numerical and you
observed and collected by the same want to see the shape of the
person or at the same location. distribution, especially to determine
5. When gathering data on the frequency whether the output of a process is
or patterns of events, problems, distributed normally
defects, defect location, defect causes, 2. To analyze whether a process can meet
and so on. the customer’s requirements
6. When collecting data from a production 3. To analyze what the output from a
process. supplier’s process looks like
HISTOGRAM 4. When seeing whether a process
A histogram is a graphical representation of the change has occurred from one time
distribution of numerical data. It is an estimate of period to another
the probability distribution of a continuous 5. To determine whether the outputs of
variable (quantitative variable) and was first two or more processes are different
introduced by Karl Pearson. 6. When you wish to communicate the
A histogram is a specialized type of bar chart. distribution of data quickly and easily to
Individual data points are grouped together in others
classes, so that one can get an idea of how SCATTER DIAGRAM
frequently data in each class occurs in the data A scatter diagram, also known as the scatter plot
set. High bars indicate more points in a class, or the X–Y graph, is a graphical tool that plots
and low bars indicate fewer points. many data points and shows a pattern of
correlation between two variables. It is used to
investigate a possible relationship between two
variables that both relate to the same event. A
straight line of best fit (using the least-squares
method) is often included in this.

Steps in Constructing a Scatter Diagram

The following steps can be used to construct a
scatter diagram:
Strength and Weaknesses of Histogram 1. Collect data on causes and effects for
The histogram shows a bar chart of accumulated variables
data and provides the easiest way to evaluate 2. Draw the causes on the X–axis
the distribution of data. The strength of a 3. Draw the effect on the Y–axis
histogram lies in the easy-to-read picture it 4. Plot the data pairs on the diagram by
projects of the location and variation in a data placing a dot at the intersection of the X
set. There are, however, two weaknesses of and Y coordinates for each data pair
histograms that need to be understood. 5. Interpret the scatter diagram for
Types of Histograms direction and strength
1. Bell-shaped distribution

20
TOTAL QUALITY MANAGEMENT
Quality Improvement Tools
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

Interpreting a Scatter Diagram CONTROL CHARTS

Data patterns, whether in a positive or negative The control chart is a graph used to study how a
direction, should also be interpreted for strength process changes over time. Data is plotted in
by examining the “tightness” of the clustered time order. It always has a central line for the
points. The more the points are clustered to look average, an upper line for the upper control limit
like a straight line, the stronger the relationship. and a lower line for the lower control limit. These
Figure 8.5 shows how the strength of a scatter lines are determined from historical data. By
diagram can be interpreted. comparing current data to these lines, you can
draw conclusions about whether the process
variation is consistent (in control) or is
unpredictable (out of control, affected by special
causes of variation).

Applications of a Scatter Diagram

Scatter diagrams can be used to analyze the
relationship between paired numerical data.
1. They are useful in cases when the Types of Control Charts
dependent variable has multiple values Control charts are broadly classified into two
for each value of the independent types:
variable. 1. Control charts for variables - A
2. They can be used when trying to control chart for variables is used to
determine whether the two variables monitor characteristics that can be
are related such as: measured and have a continuum of
a. When trying to identify the values, such as height, weight, or
potential root causes of volume.
problems. a) Mean chart (X chart) — used
b. To determine objectively to monitor changes in the
whether a particular cause and mean value of a process.
effect are related after b) Range chart (R chart) —
brainstorming causes and monitors changes in the
effects using a fishbone dispersion or variability of
diagram. process.
c. When determining whether c) Standard deviation chart (s
two effects that appear to be chart) — a more sensitive and
related can both occur with the better indicator of process
same cause. variability, especially for larger
d. When testing for sample sizes when the
autocorrelation before subgroups consist of more
constructing a control chart. than ten measurements.
3. Validating “hunches” about a 2. Control charts for attributes - used to
cause-and-effect relationship between monitor characteristics that have
types of variables discrete values and can be counted.
4. Displaying the direction of the Often, they can be evaluated with a
relationship (positive, negative, etc.) simple yes or no decision. Examples
5. Displaying the strength of the include color, taste, or smell. The
relationship monitoring of attributes usually takes

21
TOTAL QUALITY MANAGEMENT
Quality Improvement Tools
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

less time than that of variables because graphs indicate the categorical breakdown of
a variable needs to be measured. values, and radar charts help analyze previously
a. p Chart — also known as evaluated items.
proportion control chart, used Radar Chart
to measure the proportion of A radar chart is a graphical tool that shows the
items in a sample that are relative strengths and weaknesses of activities.
defective. P-charts are
appropriate when both the
number of defectives
measured and the size of the
total sample can be counted.
b. np Chart —can be used for
special cases when the
subgroups are of equal size or
a constant sample size over
time.
c. c Chart — used to monitor the Radar charts are used:
number of defects in a process ● When the aim is to involve people in
over time; is used when we evaluating key areas of business and in
can compute only the number organizing spheres needing
of defects but cannot compute improvement.
the proportion that is defective. ● When rating performances and showing
d. u Chart — also known as the actual and ideal performances.
"defects per unit" chart, is a ● When showing changes from period to
type of control chart used to period for items measured on a Likert
monitor the number of scale.
nonconforming items per unit
in a process. SEVEN NEW MANAGEMENT AND
Applications of a Control Chart PLANNING TOOLS
● When controlling ongoing processes by
finding and correcting problems as they AFFINITY DIAGRAM
occur The affinity diagram, created in the 1960s by
● When predicting the expected range of Japanese anthropologist Jiro Kawakita, is also
outcomes from a process known as the KJ method. It organizes many
● When determining whether a process is language data (ideas, opinions, issues) into their
stable (in statistical control) natural relationships. This method taps a team’s
● When analyzing patterns of process creativity and intuition.
variation from special causes Use of affinity diagram:
(non-routine events) or common causes - When you are confronted with many
(built into the process) facts or ideas in apparent chaos
● When determining whether your quality - When issues seem too large and
improvement project should aim to complex to grasp
prevent specific problems or to make - When group consensus is necessary
fundamental changes to the process
GRAPHS
Graphs are a convenient tool to represent data in
an easier understandable way. Graph allows
communication efficiently and easily without
having to look at data tables and mentally depict
the data meaning.
Graphs are used depending on the shape
desired and the purpose of analysis. Bar graphs
compare values via parallel bars, while line
graphs illustrate variations over time. Circle

22
TOTAL QUALITY MANAGEMENT
Quality Improvement Tools
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

RELATIONS DIAGRAM procedures necessary to successfully

Relations diagram is also termed as an implement a given plan.
interrelationship diagram or a digraph or even a Main Advantages of Tree Diagram
network diagram. The relations diagram depicts ● They allow a system of strategies for
cause-and-effect relationships. The process of solving a problem or means of
creating a relations diagram helps a group achieving an objective to be developed
analyze the natural links between the different systematically and logically, making it
aspects of a complex situation. less likely that any essential items are
Uses of relations diagrams: omitted.
● Identifying key or driver issues from a ● They facilitate agreement among group
list of important issues. members. They are extremely
● Identifying the most important problems convincing since they identify and
for resolution when the number of clearly display the strategies for solving
problems exceeds the resources a problem.
available to solve all of them. Uses of a Tree Diagram:
● Identifying the root cause of existing A systematic diagram can be used:
problems. 1. To develop a sequence of steps that
● Identifying key factors needed to make form the solution to a problem.
a decision when there is insufficient 2. When it is known that the
information available to make a implementation of some task will be a
data-driven decision. complex sequence.
3. When serious consequences can occur
as the result of missing a key step in
implementing the solution to a problem.

SYSTEMATIC OR TREE DIAGRAM

Tree Diagram breaks down broad categories into
finer and finer levels of detail, helping you move MATRIX DIAGRAM
your thinking step by step from generalities to The Matrix Diagram shows the relationship
specifics. A tree diagram maps out the paths and between two, three or four groups of information
tasks necessary to complete a specific project or and can give information about the relationship,
reach a specified goal. such as its strength, the roles played by various
Two Types of Tree Diagram individuals, or measurements.
● The constituent–component–analysis Matrix diagrams are “spreadsheets” that
diagram breaks down the main subject graphically display relationships between ideas,
into its basic elements and depicts their activities, or other dimensions in such a way as
relationships to the objectives and to provide logical connecting points between
means of obtaining those objectives. each item. A matrix diagram is one of the most
● The plan-development diagram versatile tools in quality planning. Six differently
systematically shows the means and shaped matrices are possible—L, T, Y, X, C and
roof-shaped—depending on how many groups

23
TOTAL QUALITY MANAGEMENT
Quality Improvement Tools
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

must be compared. Table 8.14 summarizes Industrial Applications of a Matrix Diagram

when to use each type of matrix. Matrix Diagrams can be used for the following:
● An L-shaped matrix: It relates two ● It is often used in deploying quality
groups of items to each other (or one requirements into counterpart
group to itself). (engineering) characteristics and then
● A T-shaped matrix: It relates three into production requirements.
groups of items. Groups B and C are ● To establish idea conception points for
each related to A. Groups B and C are the development and improvement of
not related to each other. system products.
● A Y-shaped matrix: It relates three ● Achieve quality deployment in product
groups of items. Each group is related materials.
to the other two in a circular fashion. ● Establish and strengthen the quality
● A C-shaped matrix: It relates three assurance system by linking certified
groups of items simultaneously in 3-D levels of quality with various control
● An X-shaped matrix: It relates four functions.
groups of items. Each group is related ● Reinforce and improve the efficiency of
to two others in a circular fashion. the quality evaluation system.
● A roof-shaped matrix: It relates one ● Pursue the causes of non-conformities
group of items to itself. It is usually used in the manufacturing process.
along with an L or T-shaped matrix. ● Establish strategies about the mix of
When to Use Differently Shape Matrices products to send to the market by
evaluating the relationships between
the products and market situations.
MATRIX DATA ANALYSIS
Matrix data analysis is a multivariate analysis
Frequently Used Matrix Diagram Symbols technique also known as “principal component
analysis.” This technique quantifies and arranges
data presented in a matrix diagram to find more
general indicators that would differentiate and
give clarity to large amounts of complexly
intertwined information. This will help us to
visualize and obtain an insight into the situation.
Characteristics of the matrix data analysis
diagram:
● The matrix analysis method qualifies
and arranges matrix diagram data so
that the information is easy to visualize
and comprehend.
● The relationships between the elements
shown in a matrix diagram are
quantified by obtaining numerical data
for intersection cells.
● This is the only numerical analysis
method among the seven new QC
tools. The results of this technique,
however, are presented in diagram
form.
● One major technique that this method
also utilizes is known as principal
components analysis.
Uses of the matrix data analysis diagram:
● Analyze production processes where
factors are complexly intertwined.

24
TOTAL QUALITY MANAGEMENT
Quality Improvement Tools
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

● Analyze causes of non-conformities that the conceivable events or contingencies that can
involve a large volume of data. occur in the implementation stage can be
● Grasp the desired quality level indicated mapped out using the PDPC.
by the results of a market survey. Characteristics of a PDPC:
● Classify sensory characteristics ● The PDPC diagram is a simple
systematically. graphical tool, which can be used to
● Accomplish complex quality mitigate risk in virtually any undertaking.
evaluations. ● The PDPC method helps determine
● Analyze curvilinear data. which processes to use to obtain
ARROW DIAGRAM desired results by evaluating the
The arrow diagram shows the required order of progress of events and the variety of
tasks in a project or process, the best schedule conceivable outcomes.
for the entire project and potential scheduling ● Implementation plans do not always
and resource problems and their solutions. The progress as anticipated. When
arrow diagram lets you calculate the “critical problems, technical or otherwise arise,
path” of the project. This is the flow of critical solutions are frequently not apparent.
steps where delays will affect the timing of the ● The PDPC method, in response to
entire project and where the addition of these kinds of problems, anticipates
resources can speed up the project. possible outcomes and prepares
Applications of arrow diagrams: countermeasures that will lead to the
● To understand and manage a complex best possible solution.
project or task. ● It establishes an implementation plan
● To understand and manage a project for management by objectives.
that is of major importance to the ● It establishes an implementation plan
organization, where the consequences for technology-development themes.
of late completion are severe. ● It establishes a policy of forecasting and
● To understand and manage a project in responding in advance to major events
which multiple activities must take place predicted in the system.
and be managed simultaneously. ● Implement countermeasures to
● To explain the project status to others. minimize non-conformities in the
● Implement plans for new product manufacturing process to set up and
development and its follow-up. select adjustment measures for the
● Develop product improvement plans negotiating process.
and follow up activities. Uses of a PDPC chart
● Establish daily plans for experimental ● To explore all of the possible
trials and follow up activities. contingencies that could occur in the
● Establish daily plans for increases in implementation of any new or untried
production and their follow-up activities. plan that has risks involved.
● Synchronize the preceding plans for QC ● To implement a plan that is complex
activities. and the consequences of failure are
● Develop plans for a facility move and serious.
for monitoring follow up. ● To implement a plan in which there is
● Implement a periodic facility generally a time constraint for
maintenance plan and its follow up implementing a plan so that insufficient
● Analyze a manufacturing process and time is available to deal with contingent
draw up plans for improved efficiency. problems as they occur.
● Plan and follow up QC inspections and
diagnostic tests.
● Plan and follow up QC conferences and
QC circle conferences.
PRECISION DECISION PROGRAM
The process decision program chart (PDPC) is a
very useful and powerful method to overcome a
problem or achieve a goal that is not familiar. All

25
TOTAL QUALITY MANAGEMENT
Business Process Re-engineering (BPR)
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

BPR AT MAHINDRA & MAHINDRA LIMITED WHEN IS BPR USED?

Mahindra & Mahindra Ltd is one of the largest 1. The competition outperforms the
agricultural tractors, Automotive vehicles, company.
implements and industrial engines manufactured 2. There are conflicts in the re-engineer.
in India headquartered in Mumbai, Maharashtra, 3. There is an extremely high frequency of
India. The company was founded by Kailash meetings.
Chandra Mahindra and Jagdish Chandra 4. There is an excessive use of
Mahindra on October 2, 1945. non-structured communication (emails
and memos).
INTRODUCTION 5. A more continuous approach of
incremental improvement is not
● BPR is an approach aimed at improving possible.
the re-engineered performance by
elevating the efficiency and KEY CONCEPTS OF BPR
effectiveness of the processes that exist
within and across re-engineers. THE FUNDAMENTAL QUESTIONS
● BPR enables re-engineers to look at These are the most basic questions about the
their business processes afresh and company and the way it operates. These force
determine how best to construct these the company to look at the tacit rules and
processes to improve the ways of assumptions made for conducting business.
conducting business.
RADICAL
● BPR has many synonyms such as
Radical redesign refers to getting to the root of
business process redesigning, process
things, not just making superficial changes and
re-engineering, business
throwing away the old. This also requires a
transformation, business process
disregard for all existing structures and
change management, business
procedures.
reinventing, re-engineering and
business re-engineer. DRAMATIC
BUSINESS PROCESS REENGINEERING From the customer’s perspective, re-engineering
(BPR) DEFINITIONS is about achieving quantum leaps in
performance and not making incremental
BPR is the analysis and redesign of
improvements. This requires deleting the old
workflows within and between
rules of business and replacing them with new
enterprises in order to optimize
ones.
end-to-end processes and automate
non-value-added tasks. PROCESSES
● BPR is a business management BPR focuses on business processes. It requires
strategy, originally pioneered in the a re-design of the strategic and value-added
early 1990s, focusing on the analysis processes and requires a process-oriented
and design of workflows and business approach with a focus on end results and the
processes within an organization. different tasks involved.
● Hammer and Champy define BPR as CUSTOMERS
the “fundamental rethinking and radical The customers are the main stakeholders in this
redesign of business processes to approach. All business processes should be
achieve dramatic improvements in focused on them. The customer alone is
critical, contemporary measures of responsible for defining what constitutes the
performance, such as cost, quality, value of a product or service.
service and speed”.
● Business process reengineering is also
known as business process redesign,
business transformation, or business
process change management.

26
TOTAL QUALITY MANAGEMENT
Business Process Re-engineering (BPR)
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

THE 3R’S OF REENGINEERING REQUIREMENTS OF THE

RE-ENGINEERING PROCESS
Clean Slate Approach - This is the original
philosophy of BPR that challenges the
fundamentals of a process.
Critical Processes - The emphasis of
re-engineering should be on identifying core
business processes rather than the functional
and support processes, which have a greater
scope for breakthrough improvements rather
than incremental improvement.
Process Analysis - A re-engineering team must
have a clear understanding of the current
EMERGENCE OF BPR process—what it does, how well it performs and
what factors affect it.
Frederick Taylor introduced the
Cross-functional Teams - A team consisting of
principles of scientific
members from each functional area affected by
management in the1900s. The key
the process is required for carrying out a
to Taylor’s advances in
re-engineering project
re-engineering thinking was that
Strong Leadership - The top management
the scientific method should be
should provide the required resources and
used to develop a “best way.
create a sense of urgency, making a case for
change that is compelling.
1950S Information Technology - Information
During the 1950s, large firms began to explore technology is a key enabler of BPR. Information
the potential impact of computers on the should be captured once, at the source and be
efficiency and effectiveness of their business reused often.
processes.
1980S RULES OF BPR
During the 1980s, the quality revolution ushered
RULE 1: ORGANIZE AROUND OUTCOMES,
in developments in BPR
NOT TASKS
1990S BPR involves combining different tasks and
In 1990, Michael Hammer, a former professor of activities to make the process more efficient. By
computer science at the Massachusetts Institute focusing on the outcomes, BPR eliminates
of Technology, published an article in the unnecessary activities, leading to improved
Harvard Business Review in which he claimed quality, faster speed, increased productivity, and
that the major challenge for managers was to better customization.
obliterate work that did not add value rather than
RULE 2: IDENTIFY ALL THE PROCESSES IN
use technology to automate it..
AN ORGANIZATION AND PRIORITIZE THEM
IN ORDER OF REDESIGN URGENCY
Michael Hammer and James Champy, the
originators and leading exponents of the concept The people who do the work should do it in the
of re-engineering, published Reengineering the best place for them to do it. This means that
Corporation in 1993. This book is considered to workers who can do many different jobs should
be a pioneering book on BPR. be in charge of the whole process.
RULE 3: INTEGRATE INFORMATION
A similar idea was advocated by Thomas H. PROCESSING WORK INTO THE REAL WORK
Davenport and J. Short in 1990 in a paper “The THAT PRODUCES INFORMATION
New Industrial Engineering: Information The individuals who gather information should
Technology and Business Process Redesign,” also handle its processing. This helps minimize
published in the Sloan Management Review. mistakes

27
TOTAL QUALITY MANAGEMENT
Business Process Re-engineering (BPR)
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

RULE 4: TREAT GEOGRAPHICALLY ● Making work more satisfying

DISPERSED RESOURCES AS THOUGH for employees.
THEY WERE CENTRALIZED ● Giving employees more power
This needs a lot of connections between to make decisions quickly.
computers. Big databases and phone networks ● Getting things done faster, like
help companies connect different parts or reaching customers quicker.
workers in the field. This way, companies can ● Doing things better overall, like
save money and still be able to change quickly to delivering higher quality.
meet their customers' needs. 2. Reported are tangible advantages that
enhance firms' competitive standing,
RULE 5: LINK PARALLEL ACTIVITIES IN THE
including:
WORKFLOW INSTEAD OF JUST
● Decrease in product
INTEGRATING THEIR RESULTS
development duration by
Do multiple tasks at the same time instead of 40–60%
one after the other, and then combine their ● Decrease in response time by
outcomes to reduce the time it takes to complete 40–60%
a business process from start to finish. ● Decrease in lead time by
RULE 6: MAKE THE DECISION POINT 70–90%
WHERE THE WORK IS PERFORMED, AND ● Decrease in unit cost by
BUILD CONTROL INTO THE PROCESS 15–25%
Employees should be encouraged to make ● Decrease in inventory and
decisions as they work. They should be associated expenses by
supported and empowered to do so. 60–80%
RULE 7: CAPTURE INFORMATION ONCE 3. Strategic Advantages of BPR
AND AT THE SOURCE
Put information in one place and use it many
times. Don't type the same information multiple
times to prevent mistakes.

BPR principles can be simplified as follows:

● Combining several jobs into one.
● Allowing workers to make decisions.
● Following a natural order in process
steps.
● Having multiple versions of processes.
● Performing work where it makes the
most sense.
● Reducing checks and controls. BUSINESS PROCESSING
● Minimizing reconciliation efforts. REENGINEERING
● Designating a single case manager as
the main contact point. METHODOLOGY
● Utilizing a mix of centralized and 1. The Hammer and Champy
decentralized operations. methodology
Michael Hammer and James Champy
BENEFITS OF BPR
identify ineffective management and ambiguous
1. BPR Common Advantages objectives as the primary obstacles to achieving
● Getting rid of unnecessary success in Business Process Reengineering
tasks to save money. (BPR) initiatives.
● Being able to adjust to 2. Davenport and Short’s methodology
changes and help new Thomas H. Davenport and J. Short
businesses grow. positioned information technology (IT) as central
● Making products stand out by to Business Process Reengineering (BPR),
being faster.

28
TOTAL QUALITY MANAGEMENT
Business Process Re-engineering (BPR)
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

asserting that IT plays a pivotal role in driving 4. Identifying information technology

innovation in business processes. levers: This involves a brainstorming
3. Process analysis and design session with everyone involved to
methodology (PADM) identify new approaches to process and
The Informatics Process Group (IPG) at further improve it.
Manchester University introduced this 5. Design and build a prototype of the new
methodology as a collection of tools and process: This process is the
techniques designed for specific situations within implementation of re-engineering and
Business Process Reengineering (BPR) efforts. technical aspects. In this step, ensuring
Known as PADM, it aims to manage the the smooth transitioning of the new
relationship between supporting technology and system within the organization is a
the reengineering process, acknowledging the must.
mutual influence between technology and The implementation of BPR in projects may be
processes. explained in the following seven phases:
4. Jacobson’s object-oriented Phase 1: Begin operational change
methodology Phase 2: Build the re-engineering organization
The object-oriented methodology, developed by Phase 3: Identify BPR Opportunities
Jacobson, M. Ericsson, and A. Jacobson for Phase 4: Understand the existing process
Business Process Reengineering (BPR), is Phase 5: Re-engineer the process
named for its ability to clarify a company's Phase 6: Blueprint the new business system
internal operations and interconnections among Phase 7: Perform the transformation
processes, products, services, and resources. In
this approach, an object is an entity RE-ENGINEERING IN THE SERVICE AND
encompassing both information and behavior MANUFACTURING INDUSTRY
pertinent to the company's environment, with its Re-engineering in the Service Sector
functionality accessible to other objects. ● Make the customer the starting point for
CONSOLIDATED METHODOLOGY the change
● Design work processes in light of
Activity 1: Prepare for Re-engineering re-engineered goals
Activity 2: Map and Analyze the As-Is Process ● Restructure to support front-line
Activity 3: Design the To-Be Processes performance
Activity 4: Implement Re-engineered Process
Activity 5: Improve Process Continuously RE-ENGINEERING STRUCTURE

IMPLEMENTATION OF BPR BPR LEADER

Thomas H. Davenport prescribes a five-step
approach to the BPR model. This model can be
applied to any business process. The five steps
in the process are:
1. Develop the business vision and
process objectives: This step involves
setting future goals and prioritizing 1. BPR Project Manager
objectives. A BPR vision describes the ● This individual is responsible for leading
ideal state of a process. the overall BPR project, coordinating
2. Identify the business processes to be activities, managing resources, and
redesigned: This involves identifying ensuring that the project stays on
hindrances in the manufacturing schedule and within budget.
process that create bottlenecks. 2. Chief Process Officer (CPO)
3. Understand and measure the existing ● Some organizations have a dedicated
processes: This involves setting a executive role, such as a Chief Process
standard in the process and identifying Officer, who is responsible for
current problems. overseeing all business processes,

29
TOTAL QUALITY MANAGEMENT
Business Process Re-engineering (BPR)
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

including those undergoing 3. Cross-Functional Teams

re-engineering. Responsibility: In cases where processes span
3. Chief Transformation Officer (CTO) multiple departments or functions, organizations
● In some cases, the leader of a BPR may appoint cross-functional teams as process
initiative may be known as the Chief owners. These teams bring together
Transformation Officer, emphasizing representatives from different areas to
their role in driving trans-formative collaborate on the re-engineering efforts.
changes within the organization. 4. Process Improvement Teams
4. Director of Business Process Improvement Responsibility: Dedicated process improvement
● This title reflects a focus on improving teams or business process teams may be
business processes and may formed specifically to oversee the re-engineering
encompass BPR activities. The director of certain processes. These teams focus on
in this role leads the efforts to identify, driving improvements, managing change, and
analyze, and redesign key business ensuring the successful implementation of new
processes. processes.
5. Vice President of Operations or Business 5. Project Managers
Transformation Responsibility: BPR initiatives are often treated
● This executive may oversee the BPR as projects, and project managers can serve as
initiative as part of their broader process owners. They are responsible for
responsibilities related to operations or coordinating and overseeing the entire
organizational transformation. re-engineering project, ensuring it stays on
6. BPR Steering Committee schedule and within budget.
● In larger organizations, a group of 6. Change Management Specialists
senior executives may form a steering Responsibility: Individuals with expertise in
committee to collectively lead and guide change management may act as process
the BPR initiative. One of the committee owners to guide and facilitate the transition from
members may take on a more current processes to re-engineered ones. They
prominent role as the BPR leader. focus on addressing resistance, communicating
PROCESS OWNERS effectively, and ensuring a smooth change
process.
7. Quality Assurance/Process Excellence
Teams
Responsibility: Teams dedicated to quality
assurance or process excellence may take on
the role of process owners. They focus on
ensuring that the
RE-ENGINEERING TEAMS

1. Business Unit Managers

Responsibility: Business unit managers often
serve as process owners for the specific
processes within their departments or units.
They are accountable for the performance and
outcomes of the processes under their purview.
2. Functional Managers
Responsibility: Functional managers, such as 1. BPR Steering Committee
those overseeing finance, HR, or IT, may act as ● This is a group of senior executives and
process owners for the processes within their leaders who provide oversight,
functional areas. They ensure that the direction, and support for the BPR
re-engineering aligns with the overall objectives initiative. The steering committee
of their departments. ensures alignment with organizational

30
TOTAL QUALITY MANAGEMENT
Business Process Re-engineering (BPR)
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

goals and monitors the overall progress ● Data plays a crucial role in analyzing
of the re-engineering efforts. the current state of processes and
2. BPR Project Manager measuring performance. Data analysts
● Responsible for the day-to-day or data teams help gather, analyze, and
management of the BPR project, the interpret data to inform decision-making
project manager coordinates activities, during the re-engineering process.
manages resources, and ensures that 9. External Consultants
the project stays on track and meets its ● In some cases, organizations may bring
objectives. in external consultants with expertise in
3. Process Owners BPR methodologies and best practices.
● These individuals or teams are These consultants provide guidance,
responsible for specific business support, and an external perspective on
processes targeted for re-engineering. the re-engineering process.
Process owners play a crucial role in OTHER EMPLOYEES INVOLVED IN THE
understanding, analyzing, and RE-ENGINEERING PROCESS
redesigning their respective processes 1. Frontline Employees
to achieve desired improvements. ● These are the individuals directly
4. Cross-Functional Teams involved in executing day-to-day tasks
● BPR often involves processes that span within the processes being
multiple departments. Cross-functional re-engineered. Their input is valuable
teams bring together individuals from during the analysis phase, and they
different functional areas to collaborate play a crucial role in the successful
on the redesign of end-to-end implementation of the re-engineered
processes. These teams ensure that all processes.
perspectives are considered and that 2. Human Resources (HR) Department
the re-engineering efforts align with ● HR is involved in various aspects of the
organizational goals. BPR initiative, including workforce
5. IT Specialists planning, talent management, and
● Information Technology (IT) specialists ensuring that HR policies align with the
or teams are often integral to BPR, changes. HR may also be responsible
especially when technology solutions for communicating changes to
are involved in process improvements. employees and managing any
They work closely with process owners workforce transitions.
to implement technological changes 3. Communication Specialists
that enhance efficiency and ● Effective communication is vital in a
effectiveness. BPR initiative. Communication
6. Change Management Team specialists or corporate communication
● Given the significant organizational teams help in crafting and delivering
changes associated with BPR, a messages related to the re-engineering
change management team helps effort, keeping employees informed and
manage the human side of the engaged.
transformation. This team focuses on 4. Finance Department
communication, training, and ● The finance team is involved in
addressing resistance to ensure a budgeting, cost analysis, and financial
smooth transition. planning for the BPR initiative. They
7. Quality Assurance and Continuous ensure that financial resources are
Improvement Teams allocated appropriately and that the
● These teams are responsible for initiative aligns with the organization's
monitoring the effectiveness of financial goals.
re-engineered processes, identifying 5. Legal and Compliance Teams
areas for improvement, and ● These teams ensure that the
implementing continuous improvement re-engineering efforts comply with legal
initiatives. requirements, industry regulations, and
8. Data Analysts any applicable standards. They may be

31
TOTAL QUALITY MANAGEMENT
Business Process Re-engineering (BPR)
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

involved in reviewing contracts, effectively adjust to shifting market conditions,

agreements, and ensuring that changes technology breakthroughs, and competitive
meet legal standards. pressures by reevaluating and restructuring their
BPR TEAMS IN PROJECT MANAGEMENT processes.
1. Process Improvement Team - A 2. Operational Efficiency - BPR focuses on
process improvement team's members process simplification to increase efficacy and
are representatives of each operation of efficiency. In order to decrease bottlenecks and
the procedure or a subroutine. Typically, delays, this may entail automating manual
the team's activities are restricted within operations, removing pointless processes, and
the work unit. A team including around rearranging workflows.
six to ten individuals will be selected 3. Organizational Improvement - BPR
from the work unit. implementation frequently necessitates
2. Cross-functional Team - Several considerable organizational change.
various functional areas, including Reorganizing teams, retraining staff members,
engineering, marketing, accounting, and promoting a continuous improvement culture
production, quality, and human may all be necessary to achieve this. Ensuring
resources, will be represented by a employee engagement and support during a
team of roughly six to ten people.\ change process is contingent upon effective
3. Natural Work Teams - This kind of change management.
team consists of every employee in the 4. Integration of Technology - BPR usually
work unit; it is not elective. The projects entails using technology to streamline
that need to be improved are chosen by procedures. This could entail putting in place
management, which sets it apart from new software, integrating current systems, and
quality control circles. A manager is measuring performance and identifying areas for
also a member of the team. For a improvement using data analytics.
variety of reasons, some employees 5. Customer Care - BPR places a strong
may choose not to work in teams. emphasis on comprehending and satisfying
4. Self-managed Work Teams - They are customer needs. Organizations may improve
essentially unsupervised versions of customer happiness, loyalty, and retention by
natural work teams. They oversee the reengineering processes from the perspective of
task as well as perform it, making them the customer.
the model empowered organization. 6. Performance Assessment - Setting up key
Subject to organizational work flow performance indicators (KPIs) is necessary for
restrictions, they are free to arrange BPR in order to track how well altered processes
their work however they see fit. are working. Organizations can monitor key
performance indicators (KPIs) including cycle
LIMITATION AND ISSUES IN BPR time, cost savings, and quality improvements to
evaluate the effectiveness of their reengineering
1. Resistance to Change initiatives and make necessary adjustments.
2. Resource Intensive
3. Risk of Failure
4. Lack of Leadership Support
5. Overemphasis on Technology
6. Neglecting Human Factors
7. Inadequate Communication
8. Short-Term Focus
9. Inflexibility
10. Measurement and Evaluation
Challenges

THE RELATIONSHIP BETWEEN BPR

1. Strategic Alignment - BPR seeks to match
the organization's strategic objectives with its
business processes. Businesses can more

32
TOTAL QUALITY MANAGEMENT
Business Process Management and Total Productive Maintenance
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

The evolution of BPM starts in the 1980’s,

BUSINESS PROCESS MANAGEMENT because of a considerable focus on Total Quality
Management and Six Sigma which awareness
BPM AT GENERAL ELECTRIC about “processes.” Which laid the groundwork on
Business Process Management or referred to as business processes. It was followed by business
BPM, examines the improvement in business process re-engineering (BPR) and the Third
processes which results in efficiency and Wave.
reduced cost. BPM is a comprehensive SCOPE OF PROCESS MANAGEMENT
approach to achieving optimized business Business Process Management, or BPM, is a
outcomes by aligning business functions with management approach that requires considering
customer needs. the entire organization. At the operational level,
There are 5 stages of BPM lifecycle which are: managers focus on improving and controlling key
processes to achieve the organization's goals.
There are two aspects to the operational
management of a business process:
1. Management of the business process
as an integral part of “management.”
2. Management of business process
improvements.
The critical success factors in BPM projects
are leadership, BPM-experienced business
project manager, linkage to organization
strategy, process architecture, people change
management, people and empowerment, project
initiation and completion, sustainable
performance and realizing value.
These processes typically fall into two
categories:
1. Value creation processes
1. Design. Analyze the existing process to Value creation processes are the heart
see what can be improved. Then, of the business, directly impacting customer
develop the business process as it satisfaction and the organization's competitive
should ideally exist using edge.
standardization and automation. 2. Support processes
2. Model. Look at how the redesigned Support processes are crucial to the
business process operates in different core operations and value creation activities as
scenarios. they provide the infrastructure for value creation
3. Execute. Execute improvements, processes to function smoothly, but they don't
including standardization and process directly add value to the final product or service.
automation. DESIGNING PROCESSES FOR QUALITY
4. Monitor. Track improvements to see mass customization— providing personalized,
how they perform. custom-designed products to meet individual
5. Optimize. Continue to improve the customer preferences at prices comparable to
business process on an ongoing basis. mass produced items.
INTRODUCTION THE PROCESS OWNER
BPM refers to the design, execution, and The design of a process begins with the process
improvement of activities that deliver value to owner. A process owner might be an individual, a
customers within the organization. It goes team, a department or some cross-functional
beyond just managing data and instead focuses group responsible for the overall performance of
on the entire process, considering both human a process.
and computer tasks.
EVOLUTION OF BPM

33
TOTAL QUALITY MANAGEMENT
Business Process Management and Total Productive Maintenance
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

understanding of a process or series of parallel

processes.
● Business Process Improvement
Consultant- hired by majority of
companies vying for ISO 9001 status to
assist in coming up with business
processing maps.
DESIGN PROCESS ● Process Mapping - is a workflow
Design processes involve all activities that are diagram to bring forth a clearer
performed to incorporate customer requirements, understanding of a process or series of
new technology and past learning into the parallel processes.
functional specifications of a product, and define IMPORTANCE OF PROCESS MAPPING
its fitness for use. METHOD
The typical product development process ● ISO criteria - an internationally
consists of six phases. recognised way of doing something. It
1. Idea generation: Product ideas should means that everyone follows the same
incorporate customer needs and set of guidelines no matter where they
expectations. are based, resulting in a safer, more
2. Preliminary concept development: In consistent end result.
this phase, new ideas are studied for ● Baldrige criteria for excellence -
feasibility criteria gives the company how to
3. Product/process development: This measure their performances on the
phase usually includes prototype testing seven criteria of leadership, strategic
in which a model is constructed to test planning, customer focus,
the product’s physical properties or use measurement, analysis and knowledge
under actual operating conditions as management, workforce focus,
well as consumer reactions to the operation focus and result.
prototypes. ● Balanced scorecard - refers to a
4. Full-scale production: If no serious strategic management performance
problems are found, the company metric used to identify and improve
releases the product to manufacturing various internal business functions and
or service delivery teams. their resulting external outcomes.
5. Market introduction: The product is ● Deming’s total quality management
distributed among the customers. model - the management technique
6. Market evaluation: Future product that focuses on the creation and
development and improvement continuous improvement of
processes depend on market evaluation organizational mechanisms for the high
and customer feedback to initiate quality of outputs.
continuous improvements. PROCESS MAPPING TOOLS
Design for manufacturing: Design for
1. Basic Flowchart
manufacturability is the process of designing a
● Type of diagram that is simplest to
product for efficient production at the highest
create and represents an algorithm,
level of quality
workflow or process, showing the steps
Production processes: Production/delivery
as boxes of various kinds, and their
processes create or deliver the actual product.
order by connecting them with arrows
Some examples are manufacturing, assembly,
2. Swim Lane Diagram
dispensing medications, teaching a class, etc.
● Also known as deployment maps or
PROCESS MAPPING cross-functional flowcharts that
Establishes the overall status of a business resemble a swimming pool with lanes.
enterprise and de nes what it does, along with ● It is a visual element used in process
what the people responsible for running the flow diagrams, or flowcharts that
business and the standard are required to do to visually distinguishes job sharing and
ensure the success of its operations. is a work responsibilities for sub-processes of a
ow diagram to bring forth a clearer

34
TOTAL QUALITY MANAGEMENT
Business Process Management and Total Productive Maintenance
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

business process. Swim lanes may be - This phase involves building

arranged either horizontally or vertically components for implementing the new
3. Value Stream Map (VSM) process, including infrastructure,
● Lean-management method for change management programs, and
analyzing the current state and testing hardware and software.
designing a future state for the series of 7. People
events that take a product or service - This phase ensures that activities,
from its beginning through to the roles, and performance align with
customer. organizational strategy and process
● At Toyota, it is known as “material and goals.
information flow mapping”. 8. Implement
4. SIPOC Diagram - In this phase, designed process
● Also known as COPIS, is tool that improvements are implemented, and
summarizes the inputs and outputs of change management activities are
one or more processes in table form. executed.
● SIPOC - Suppliers, Inputs, Process, 9. Realise value
Outputs, and Customers which form the - This phase ensures that benefits
columns of the table. outlined in the business case are
5. Spaghetti Diagram realized through benefits management
● Also known as spaghetti maps, indicate and reporting.
the flow of materials through various 10. Sustainable performance
areas, departments or physical spaces. - This phase focuses on transitioning
● a visual representation using a from project to business operational
continuous flow line tracing the path of activities.
an item or activity through a process. PROCESS MANAGEMENT PRACTICE
The continuous flow line enables Process management involves three primary
process teams to identify redundancies activities: design, control, and improvement.
in the workflow and opportunities to
expedite process flow. TOTAL PRODUCTIVE MAINTENANCE
THE BPM IMPLEMENTATION FRAMEWORK
The framework comprises ten phases: TPM AT TOYOTA KIRLOSKAR AUTO PARTS
1. Organizational strategy PRIVATE LIMITED
- In this phase, the project team must TPM
fully grasp the organization's strategy, ● Total Productive Maintenance (TPM) is
vision, and goals to ensure alignment a unique Japanese philosophy.
with the BPM project. ● Developed based on productive
2. Process architecture maintenance concepts and
- This phase establishes rules, principles, methodologies.
and models for BPM implementation TPM Awards
across the organization. ● Established in 1969 by Japan Institute
3. Launch pad of Plant Maintenance (JIPM) in Japan.
- This phase serves as the platform for ● Aims to strengthen the improvement of
scoping, establishing, and launching enterprise constitutions.
BPM projects. RELIABILITY
4. Understand
Reliability is a probability of success over time,
- This phase focuses on gaining a deep
contingent on meeting the intended function,
understanding of current business
operating within a specified period, and under
processes to facilitate innovation.
defined conditions.
5. Innovate
1. Reliability Engineering. Reliability
- This creative phase aims to optimize
engineering focuses on ensuring the
processes within the project scope to
dependability of a product throughout its
meet stakeholders' expectations.
lifecycle.
6. Develop

35
TOTAL QUALITY MANAGEMENT
Business Process Management and Total Productive Maintenance
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

Reliability by its definition has four important Types of FMEA

elements—probability, time, performance, and 1. System — focuses on global system
operating conditions. functions
A. Reliability is a Probability. Viewing 2. Design — focuses on components and
failure as a random occurrence with subsystems
varying likelihood over time. 3. Process — focuses on manufacturing
B. Reliability pertains to a specified time and assembly processes
period, meaning the system has a 4. Service — focuses on service functions
defined chance of operating without 5. Software — focuses on software
failure within that time. functions
C. Reliability is tied to the intended TOTAL PRODUCTIVE MAINTENANCE (TPM)
function, emphasizing operation without Total productive maintenance (TPM) is a concept
failure. developed by the Japan Institute of Plant
D. Reliability is confined to stated Maintenance (JIPM) Tokyo in the late 1960s.
operating conditions. Limitation is TPM is the key for the operational excellence of
necessary because it is impossible to many Japanese companies.
design a system for operation under
unlimited conditions. OVERALL EQUIPMENT EFFECTIVENESS
(OEE)
FAILURE MODE AND EFFECT ANALYSIS
Overall equipment effectiveness (OEE) is a term
(FMEA)
coined by Seiichi Nakajima in the 1960s to
evaluate how effectively a manufacturing
operation is utilized. It is based on the Harrington
Emerson way of thinking regarding labor
efficiency.
SIX BIG LOSSES
A. Availability (Downtime)
Downtime results because of:
1. Equipment failure from
breakdowns
2. Setup and adjustment from
exchange of die, tool changes.
B. Performance Rate (Speed Losses):
The primary purpose of FMEA is to identify all Speed losses result on account of:
potential product, service, design, manufacturing 1. Idling and minor stoppages
or assembly process failure. due to abnormal operation of
Application of FMEA sensors, blockage of work on
chutes, etc.
2. Reduced speed due to
discrepancies between the
design and the actual speed of
equipment.
C. Quality Rate (Defects):
Defects arise due to:
1. Process defects due to scraps
and quality defects to be
repaired.
2. Reduced yield from machine
startup to stable production.
EIGHT PILLAR OF TPM
Pillar 1 - Jishu Hozen (Autonomous
Maintenance)
Jishu Hozen (JH), a Japanese word that means
autonomous maintenance, is the first pillar of

36
TOTAL QUALITY MANAGEMENT
Business Process Management and Total Productive Maintenance
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

Total Productive Maintenance (TPM). It ● Drastically reduce the time taken to

emphasizes autonomous maintenance by receive, install and set-up newly
operators itself. JH aims to empower operators purchased equipment (known as
to handle routine maintenance tasks to allow vertical start-up).
skilled maintenance personnel to focus on more ● Reduce the time to manufacture a new
complex repairs and value-added activities. product in the factory.
Pillar 2 - Kobetsu Kaizen (Focused Pillar 7—Safety, Health and Environment
Improvement) ● Achieve the objective of zero-accidents
Kobetsu Kaizen, or focused improvement, is a and defects.
movement toward zero losses of any kind. The ● Reduce the level of human effort
principle of zero losses is applied in all areas of required for attaining a given level of
operation. There is an unwavering commitment production.
to achieving cost reduction targets across all ● Zero-accidents, zero-health damage,
resources and improving plant equipment and zero-fires.
effectiveness. Pillar 8—Office TPM
Pillar 3 - Planned Maintenance (PM) ● Started after activating the four other
PM supports the Jishu Hozen pillar of TPM by pillars of TPM
encouraging operators to identify problems and ● Improve the productivity and infuse
develop preliminary standards for cleaning, efficiency in the administrative support
lubrication, and inspection through operator’s functions of the organization by
on-the-job training. identifying and eliminating losses.
Pillar 4 - Hinshitsu Hozen (Quality
Management)
● Aims for defect-free manufacturing and
customer satisfaction.
● Focuses on systematic elimination of
non-conformances.
● Sets equipment conditions to prevent
quality defects.
● Monitors transition of measured values
to predict potential defects.
● Prioritizes defect prevention at source,
defect-free conditions, and equipment
control.
● Supports quality assurance through QM
activities.
● Focuses on poka-yoke, in-line defect
detection, and operator quality
assurance.
● Targets include achieving zero
customer complaints, reducing
in-process defects, and reducing quality
cost.
Pillar 5 - Education and Training
● The aim is to have multi-skilled
revitalized employees whose morale is
high.
● Operators are trained to upgrade their
skills.
● Not only know the “know-how” but they
should also learn the “know-why.”
● Aim to create a factory full of experts.
Pillar 6—Development Management (Early
Management)

37
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

INTRODUCTION

CUSTOMER
● The traditional definition of a customer,
according to Webster, is "one that
purchases a commodity or service."
● In Total Quality Management, a
customer is anyone who receives and
utilizes what an organization or
individual provides.
Customer satisfaction, from the company's One of the basic concepts of the TQM
viewpoint, is influenced by three main philosophy is continuous process improvement.
components: An American Society for Quality survey on
● Company processes (operations): end-user perceptions of improvement factors
The efficiency and effectiveness of the that influenced purchases showed these
processes involved in delivering rankings:
products or services. 1. performance,
● Company employees who deliver the 2. features,
product and service: The 3. service,
competence, attitude, and dedication of 4. warranty,
employees in providing quality products 5. price and
or services. 6. reputation.
● Customer expectations: Meeting or
CUSTOMER FOCUS
exceeding the expectations of external
customers in terms of product quality, Customer focus is a business philosophy
service, and overall experience. centered on prioritizing the needs and
N. Kano, a renowned Japanese management preferences of customers above all else. This
scientist, identified three dimensions of customer approach emphasizes making products or
requirements: services with the customer in mind and working
● Basic Requirements: These are to meet their expectations
fundamental needs that customers
expect and take for granted. They are
non-negotiable and must be met for the
product or service to be considered
acceptable.
● Performance Requirements: These
are customer expectations that can be
negotiated and agreed upon. They
represent the minimum level of
performance that customers anticipate.
● Delight Requirements: These exceed
customer expectations and go above 1. Customer Retention
and beyond meeting their needs. 2. Increased Revenue
Delight requirements are unexpected 3. Brand Loyalty
and often result in a positive emotional
response from customers. BUYER-SUPPLIER RELATIONSHIPS
Several guidelines can facilitate a mutually
CUSTOMER PERCEPTIONS OF QUALITY beneficial long-term partnering relationship
Customer perception refers to how customers between suppliers and customers:
perceive a company or product, shaped by their 1. Implementation of Total Quality
interactions, experiences, and available Management (TQM):
information. It's influenced by personal opinions, 2. Long-term commitment to TQM and the
beliefs, and values. partnership
3. Reduction in the supplier base

38
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

4. Early involvement of suppliers in extended only to peers or subordinates.

research, development, and design It is commonly popular among Chinese
and Asian businesses.
CUSTOMER RELATIONSHIP
SIX KEY MARKET DOMAINS
MANAGEMENT
The expanded perspectives of relationship
Customer Relationship Management (CRM) is a marketing encompass six key market areas:
strategy that businesses use to manage 1. Customer markets: Includes current
customer interactions and data throughout the and potential customers, as well as
customer lifecycle. It involves practices, intermediaries.
strategies, and technologies aimed at improving 2. Referral markets: Consist of existing
business relationships with customers which customers who recommend products or
foster customer retention and drive sales growth. services to others, and referral sources,
HISTORY OR EMERGENCE OF CUSTOMER also known as multipliers, such as
RELATIONSHIP MANAGEMENT professionals who refer clients.
This trend has led to the emergence of CRM 3. Influence markets: Comprise entities
solutions in three stages: like government bodies, consumer
● Stage 1 involves implementing basic IT groups, business media, and financial
systems to automate sales, marketing, analysts.
and service functions. 4. Recruitment markets: Targeted at
● Stage 2 focuses on enterprise-wide attracting suitable employees to the
CRM, aiming to collect, share, and organization.
utilize customer information across 5. Supplier markets: Involve
marketing, sales, and service functions relationships with suppliers of raw
from different sources. materials, components, and services.
● Stage 3 integrates ERP and CRM 6. Internal markets: Encompass the
systems into comprehensive enterprise organization's internal departments and
solutions, incorporating blended contact staff.
centers that utilize web technologies PURPOSE OR OBJECTIVES OF CRM
and computer telephone interfaces. The primary goals of integrating CRM into a
INITIAL APPROACHES OF CRM business strategy are:
1. Anglo-Australian Approach: ● To simplify marketing and sales
Integrates quality management, operations
services marketing, and customer ● To enhance the efficiency of call centers
relationship economics to explain ● To deliver superior customer support
relationship marketing's emergence. ● To identify new customers and boost
2. Nordic Approach: Sees relationship revenue from existing ones
marketing as the convergence of ● To improve cross-selling efforts
interactive network theory, services CRM processes should align closely
marketing, and customer relationship with the fundamental stages of the
economics. Interactive network theory customer lifecycle:
in industrial marketing views marketing ● Attracting and retaining current and new
as an interactive process where customers
relationship building is crucial. ● Acquiring new customers
3. North American Approach: Initially ● Providing service to customers
focused on the buyer-seller relationship ● Retaining customers
within the organizational environment, COMPONENTS OF CRM
facilitating buyer-seller interactions. A CCM should encompass six elements:
4. Guanxi Approach: Essential due to the ● Establishing and utilizing a robust
lack of enforceable contracts found in customer or prospect database.
Western markets. Guanxi determines ● Identifying target customers or
business relationships and operations segments.
within networks based on status, where ● Defining and fulfilling the expected
invitations to join a network are customer experience.

39
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

● Establishing and assessing favorable ● Suspect: The first step begins with
business outcomes. deciding the target market segment.
● Aligning the organization to meet Suspects are aware of the company but
customer experience and business lack clarity on its brand message,
outcome goals. promise, and values. The company
● Fostering a culture of measurement, must establish brand value and promise
experimentation, learning, and to capture suspect customers' attention.
adaptability. This is achieved through awareness
TYPES OF CLASSIFICATION OF CRM and brand-building activities.
1. Strategic CRM emphasizes fostering a ● Prospect: A prospect meets the
customer-centric business culture marketer's target criteria and is ready to
dedicated to outperforming competitors make their first purchase. They've
in creating and delivering value to win accepted the brand's promise and
and retain customers. values. It's crucial for the company to
2. Operational CRM involves maximizing meet consumer expectations to convert
the collection and understanding of prospects into customers.
customer information from all ● Buyer: Once attracted by the
touchpoints such as point of sale, call marketer's offering, the prospect
centers, and the web, to enhance becomes a buyer by making a
customer loyalty and retention. purchase. They begin to develop
These customer touchpoints are divided preferences in their purchasing patterns
into: related to the company. The
a. Face-to-face touchpoints: organization must customize its
Sales/service/channel/events/s offerings as per the buyer’s buying
tores/promotions patterns and must deliver on its
b. Database-driven promises to retain the buyer.
touchpoints: Telephones/ ● Customer: A customer is someone
e-mail/mail/SMS/fax/loyalty who buys the product or service. The
cards/ATMs relationship is now well-established.
c. Mass media: Advertising They've shown a clear preference for
/PR/Websites the company's offerings over
3. Analytical CRM, also known as competitors. Relationship marketing
back-office or strategic CRM, focuses should prioritize delivering on the brand
on understanding customer activities in promise and providing exceptional
the front office. It involves analyzing value.
extensive cross-functional data using ● Frequent Customer: These customers
techniques like data mining, then have solidified their relationship with the
feeding the results back into operational organization. They consistently choose
CRM. the company as their preferred supplier,
4. Collaborative CRM aims to establish making it a significant part of their
enduring and profitable relationships portfolio.
with specific customers, requiring ● Loyal Customer: Loyal customers are
organizational collaboration with shared hesitant to switch and hold a deeply
purpose and strategies. It emphasizes positive attitude toward the company
close collaboration between internal and its offerings. They not only make
stakeholders and customers to frequent purchases but also have an
maximize customer lifetime value. emotional attachment that competitors
find difficult to break with mere tactical
LADDER OF LOYALTY offers.
● Advocate: A loyal customer transitions
into an advocate when satisfied with the
organization's offering, actively
recommending it to friends, relatives,
and acquaintances. Their positive

40
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

word-of-mouth greatly impacts the new customers. For instance, ICICI

company's acquisition of new Bond holders were given the option to
customers. Recognizing and rewarding earn a higher interest rate if they
these advocates is crucial for their invested their redemption amount in a
continued support. fixed deposit. This strategy helps retain
● Partner: At this stage, the relationship customer loyalty.
transcends that of a typical customer. LEVEL 2 - SOCIAL BONDS
The individual evolves into a partner, Level 2 strategies aim to engage customers
collaborating with the company to beyond financial incentives by adapting solutions
achieve mutual benefits. An advocate to their evolving needs. Various forms of social
becomes a partner by actively bonds include:
participating in the company's ● Continuous relationships: Are
decisions. Such partnerships aimed at fostered when companies maintain
enhancing customer value are key to stable, long-standing partnerships with
fostering stronger bonds between dealers who possess local market
customers and marketers. knowledge and maintain close ties with
LEVELS OF RELATIONSHIP STRATEGIES customers. Recognizing the value of
FOR BONDING CUSTOMER continuous relationships in building
RELATIONSHIP loyalty, Caterpillar Corporation (which is
one of the world’s largest
Leonard Berry and A. Parasuraman developed a manufacturers of mining, construction,
framework that outlines four levels of relationship and agriculture heavy equipment)
strategies for bonding customer management credits much of its noted success to its
relationships (CRM), leading to sustained strong dealer network and product
competitive advantage and bonds the customer support services offered throughout the
closer to the firm. world.
LEVEL 1 - FINANCIAL BONDS ● Personal relationships: Involve
Financial bonds rely on financial incentives to cultivating deep connections with
attract customers, but they don't offer long-term customers, commonly seen among
advantages unless combined with other bond professional service providers like
types. Without differentiation, they fail to set the lawyers, teachers, and accountants, as
firm apart from competitors. One of the biggest well as personal service providers such
disadvantages of financial bonds is that they can as counselors, hairdressers, and
be easily imitated. healthcare providers.
The various forms of financial bonds are: Social bonds alone are much more difficult for
● Volume and frequency rewards: Offer competitors to imitate. When combined with
discounted prices for larger purchases financial incentives, social bonding strategies
or for loyal customers who have can be highly effective. These bonds are
consistently supported the firm. relatively harder to sever, leading to more
Examples include frequent flyer enduring customer relationships.
programs, hotel loyalty rewards, and LEVEL 3 - CUSTOMIZATION BONDS
credit card perks. Level 3 strategies go beyond social ties and
● Bundle and cross-selling: Involve financial incentives, focusing on intimate
linking reward programs with various knowledge of customers and their needs through
services, such as hotel stays, car a learning relationship. Customization bonds are
rentals, and credit card usage. This challenging to break because customers would
provides customers with added financial need to begin anew and educate a new potential
benefits in return for their loyalty. provider, even if that provider has the capability
McDonald's has effectively employed to meet the customer's requirements. Various
bundling strategies to enhance forms of customization bonds include:
customer value. ● Customer intimacy: Involves
● Stable pricing: Involves offering loyal customers actively sharing information
customers the assurance of consistent during interactions, aiding marketers in
or lower price increases compared to customizing products, services, or

41
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

marketing strategies. This fosters ● Customers become profitable in the

organizational learning about long run. Employees become more
customers. For instance, Marriott Hotels profitable as their tenure with an
gathers data on the preferences and organization increases.
habits of over five million customers ● Increasing client retention by only 5%
through employee input during their can boost profitability by 35-85% across
stays, enhancing their understanding of many industries.
customer needs. ● Approximately 70% of customers
● Mass customization: Involves migrate to competitors because they
employing flexible processes and feel their present provider is indifferent.
organizational structures to offer TYPES OF DEFECTORS
diverse and often individually tailored Customers who defect may be broadly classified
products and services, typically at as:
prices comparable to standardized, ● Price defectors: Price defectors are
mass-produced alternatives. For clients who go to a competitor that
example, Levi's provides customers offers a lower price. Typically, these
with the option to purchase jeans made consumers are compulsive bargain
to their specifications at special outlets. searchers and it might be preferable not
Customers can provide measurements, to have them. However, clients may not
which are then sent to the factory to perceive value in continuing to support
produce customized jeans, delivered their current service provider if a
within a week. competitor is providing comparable or
● Anticipation / Innovation: Involves superior service at lower prices.
delivering pleasant surprises and the ● Product defectors: Product defectors
"wow factor" by using customization are customers who have stopped
alongside customer intimacy to purchasing from the company due to
anticipate and meet customer needs dissatisfaction with its products. This
with innovative solutions. Amazon.com could be attributed to a negative
employs collaborative filtering encounter with the product's
techniques to anticipate customer performance or the presence of
needs by leveraging purchase behavior superior products from other
data from customers with similar companies.
profiles. This technique enables ● Service defectors: Service defectors
Amazon to even anticipate the needs of are unsatisfied former customers.
new customers who share information Service dissatisfaction typically has a
during registration. significant influence. Simultaneously,
LEVEL 4 - STRUCTURAL BONDS clients provide sufficient opportunity for
Structural bonds are established by integrating firms to maintain their loyalty.
services directly into the client's service delivery Customers not only have higher
system. Forms of structural bonds include: expectations and demands, but they
● Shared processes and equipment are also more eloquent in expressing
● Joint investments them.
● Integrated information systems ● Market defectors: Competition has
significantly risen in nearly every market
CUSTOMER DEFECTIONS in industrialized countries worldwide
Customer defection happens when a customer during the past decade. Globalization
changes to a competitor. Customer defection and modern manufacturing technology
refers to the pace at which customers have led to increased speed and
discontinue using a company's products. enhanced product quality in
Businesses with high defection rates are losing organizations. Market defectors have
their current consumers. ceased using their previous service
The following research' findings raised concerns providers due to relocation.
about minimizing and eradicating client attrition: ● Technology defectors: Technology
defectors are clients who have switched

42
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

to a different, usually more advanced, knowledge in specific areas to effectively handle

technology. Examples include clients and keep clients over an extended period:
transitioning from a typewriter to a word ● Companies need to identify their
processor, from a digital diary to a PDA profitable customers.
(personal digital assistant), a line printer ● They should analyze their customer
to an inkjet printer, and from fax to defection rate and the precise causes
email. behind it. Defection analysis is a tool
● Organizational defectors: Purchasing that assists the firm in determining
the most basic goods or service can which service quality investments will
involve a highly intricate yield profits and in overseeing ongoing
decision-making process if the enhancements.
customer desires. Individual users who ● It is crucial for the organization to
are part of a group may migrate to a understand the long-term worth of their
different supplier if the group changes consumers.
providers, even if some individuals are
content with the current service CUSTOMER RETENTION PROGRAMS
provider. An example is when an Step 1: Review the Mission Statement
organization transitions from using Step 2: Research Your Customer Base
VSNL to Spectranet for shared Internet Step 3: Measure Customer Defection Rates
services. Step 4: Stay in Front of Customers
● Physical defectors: Physical factors Step 5: Take the Extra Mileage
like location convenience are rated low, Step 6: Create a Proprietary Way of
as well as competition action and Communicating or Servicing Customers
innovation. Marketing, rival activity, and
competitor relationship account for ECONOMICS OF CUSTOMER RELATIONSHIP
approximately 15%. Customer MANAGEMENT
switching is mostly caused by the 1. Customers must have complete
business's disinterest, lack of attention, knowledge of all the products and
and the absence of compelling reasons services available.
for customers to stay. Understanding 2. Address all consumer needs
the reasons for client defection and comprehensively. If you are unable to
implementing strategies to minimize it is offer the service, collaborate with
crucial. Research indicates that over another company that can.
70% of customer defections occur as a 3. Establish a consistent method of
result of the apparent apathy of communication, such as a newsletter,
corporate personnel. Perceived direct mail, or monthly phone call.
indifference include inadequate
responses to service inquiries, LIFETIME VALUE OF CUSTOMERS
ineffective complaint resolution, lack of Customer Lifetime Value (CLV), also known as
civility, and similar behaviors. Customer Lifetime Customer Value (LCV) or Lifetime Value
defection in service firms including (LTV), represents the present value of
hospitality, shopping, telecom, credit anticipated future cash flows associated with a
cards, and banking can significantly customer relationship.
impact profitability due to the continual The formula for CLV is:
revenue generated by returning Customer Lifetime Value = Customer Value -
customers. Regrettably, this information Cost (Acquisition, Retention and Service)
remains concealed as most firms do not A. Measures Determining Customer Value:
track consumer defection. 1. Frequency: Reflects how often a
ZERO DEFECTIONS customer interacts with the company.
The quality movement in manufacturing during Higher frequency indicates a greater
the 1980s aimed for "zero defects," while the likelihood of future purchases.
quality revolution in services is striving for zero 2. Recency: Measures how recently a
defections. Companies need to acquire customer made a purchase. Recent

43
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

activity suggests a higher probability of overall spending compared to

future purchases. competitors.
3. Average Transaction Size: Indicates the 3. Success in Frequency of Up and
expected value of future transactions. It Cross-Selling
signifies the volume of business a - focuses on the company's ability to
customer is willing to transact, reflecting increase the frequency of customer
current and potential needs. transactions and enhance revenue by
4. Buying Habits and Needs Evolution: upselling (encouraging customers to
Customer requirements evolve over buy more expensive items) and
time. Understanding these changes can cross-selling (offering complementary
significantly impact a customer's value products or services). Success in these
if measured and managed strategies contributes to higher CLV.
appropriately. 4. Costs of Acquisition, Service, and
5. Customer Network Value: Provides Retention
insights into sales influenced by existing - Involves evaluating the expenses
customers, either directly or indirectly. associated with acquiring new
b. Measures Determining Costs: customers, providing ongoing services,
- Costs include expenses related to new and retaining existing customers.
customer acquisition, account servicing, Understanding these costs is critical for
incentives, promotions, retention efforts, calculating the net value derived from
and new product strategies. These the customer relationship and
costs can vary across customer determining the overall profitability of
segments, products, and channels. that relationship.
CUSTOMER PORTFOLIO ANALYSIS MAKING CUSTOMER LIFETIME VALUE
(CLTV) SUCCESSFUL
1. Align with Overall Business Strategy
2. Connect with Loyalty Objectives
3. Incorporate Referrals into CLTV
4. Consider Risk Rates and Sector
Dynamics
5. Customize CLTV for Volatile Sectors
6. Integrate with Loyalty Programs
CUSTOMER VALUE MANAGEMENT (CVM)
CVM focuses on acquiring, developing, and
retaining the most valuable customers. It aims to
improve customer profitability by understanding
DIMENSION OF CUSTOMER LIFETIME individual customer value and implementing
VALUE (CLV) strategies, campaigns, and programs to
1. Customer Lifetime Duration maximize that value. CVM
- refers to the duration of the entire The concept of CVM is all about:
customer lifecycle, i.e., the length of ● Asking Customers about Preferences
time a customer engages with and ● Determining Value Relative to
makes purchases from a company. Competitors
Understanding how long a customer ● Deciding Changes for Positive Impact
relationship lasts is essential for ● Aligning People and Processes for
estimating their overall value to the Value Delivery
business. ● Providing Consistent Flow of Data and
2. Firm’s Share of Customer Wallet Information
- represents the portion of a customer's ● Winning with Customers, Employees,
total spending on products or services and Shareholders
in a specific category that is captured
by the company. It indicates the
company's effectiveness in gaining a
significant share of the customer's

44
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

THE 3R’S OF CVM CYCLE LINKING PROFITABILITY AND LOYALTY

1. Right Customers (Acquisition) - Based on profitability and loyalty the customers
identify and acquire customers with the are classified as:
highest long-term value. ● Butterflies: They are short-term
2. Right Relationship (Development) - customers having high profit potential.
develop relationships with loyal There is a good fit between a
customers, maximizing their lifetime customer’s offerings and a customer’s
value. needs.
3. Right Retention (Keeping Valuable ● Strangers: They are short-term
Customers) - focus retention efforts on customers having the lowest profit
customers with the highest lifetime potential. There is little fit between a
value. company’s offerings and a customer’s
needs.
CUSTOMER ACQUISITION AND ● Barnacles: They are long-term
SEGMENTATION customers having low profit potential.
Customers behave in four different ways: There is a limit between a company’s
1. Apostles: They are loyal customers offerings and a customer’s needs.
who are highly satisfied, keep coming ● True friends: They are long-term
back, and spread positive customers having the highest profit
word-of-mouth due to their exceptional potential. There is a good fit between a
experience. customer’s offerings and a customer’s
2. Terrorists/Defectors: Defectors are needs.
neutral but can be converted to highly CUSTOMER LIFECYCLE MANAGEMENT
satisfied customers if a company Customer lifecycle management or CLM is the
effectively addresses their needs with measurement of the CRM programme’s success
strong processes. over time—providing a person with CLM metrics
3. Mercenaries: These customers are from before and after the CRM implementation.
satisfied but disloyal, easily switching CLM measures customer-related metrics to
brands for low prices, impulse buys, assess business performance over time.
fashion trends, or novelty. They can be It might be useful to understand that each
expensive to acquire and disruptive to a customer has certain stages in the life cycle:
company's stability. ● Contact phase: The goal of this phase
4. Hostages: They are either monopolistic is to gain a new customer. Contact must
clients or habituated to the brand with a be made through marketing,
strong resistance to switching. They advertising, telemarketing, personal
endure poor service from a company selling, direct mail, promotion and
due to limited alternatives, accepting publicity.
subpar experiences. ● Acquisition phase: The goal of this
CUSTOMER ACQUISITION MANAGEMENT phase is to increase customer retention.
Customer Acquisition Management (CAM) is a Information must be collected about the
term used to describe the methodologies and customer and their purchase condition
systems to manage customer prospects and must be understood. They must be
inquiries, generally generated by a variety of offered post purchase reassurance and
marketing techniques. the price–value relationship must be
● CAM has many similarities to lead promoted.
management. A closed loop reporting ● Retention phase: The goal of this
system is always included in customer phase is to create long-term and
acquisition management. committed loyal customers. A service
● CAM also creates an orderly philosophy must be developed and
architecture for managing large responsiveness to customers must be
volumes of customer inquiries or leads. increased.
● Loyalty phase: The main objective
goal of this phase is to extend
customers' loyalty. Loyalty, customer

45
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

lifetime value and average net worth

must be defined. The costs associated MODELS OF CUSTOMER RELATIONSHIP
with loyalty must be analyzed. MANAGEMENT
1. The Identify, Differentiate, Interact,
FRAMEWORK FOR BUILDING CRM Customize (IDIC) Model
STRATEGY Developed by Peppers and Rogers. The model
● Switching suggests that companies should take four
Switching is very common in the initial stages of actions in order to build closer one-to-one
a relationship process. A prospect that gets relationships with customers—Identify,
attracted by a company’s marketing program Differentiate, Interact and Customize
may try out its product or service offering and 2. The Value Discipline Model
become a customer. As products become commoditized and margins
● Satisfaction shrink, with customers unwilling to pay for
Satisfaction is a complex emotion, which features, customer intimacy starts to play a
depends on the offer characteristics, critical role that competitors find difficult to
expectations, and usage situation. Customers replicate. Total customer experience becomes
are satisfied when the performance of the the key. Three major factors that influence the
product or service matches or exceeds their total customer experience are—external
expectations marketplace, company’s brand image and the
● Trust different ways in which the company touches a
Trust is defined as the willingness to rely on an customer.
exchange partner in whom one has confidence. 3. The Gartner Competency Model
It exists when a party has confidence in an Gartner defines CRM as a business strategy that
exchange partner’s reliability and integrity and maximizes profitability, revenue and customer
when they share common goals and values. satisfaction by organizing around customer
● Commitment segments, fostering behaviour that satisfies
Commitment to a relationship is defined as an customers and implementing customer centric
enduring desire to maintain a valued processes. The framework, called the eight
relationship. Therefore, commitment exists only building blocks of CRM, helps organizations see
when the relationship is considered important. It the big picture.
can be operationalized using the two 4. The QCi Model
dimensions: (1) attitude towards interacting with The QCi model is the product of a consultancy
each other and (2) the formation of bonds. firm. The model’s authors describe this model as
● Loyalty a customer management model. The heart of
Loyalty is not simply repeated buying. Loyalty this model depicts activities that companies need
includes future purchase intentions, price to perform to acquire and retain customers. The
sensitivity, and referral behavior (positive word of model features people performing processes and
mouth). using technology to assist in those activities.
5. Payne’s Five-Process Model
TIPS TO BUILD CUSTOMER LOYALTY This model was developed by Adrian Payne. The
model clearly identifies five core processes in
The following ten ways can build customer CRM—the strategy development process, the
loyalty: value creation process, the multi-channel
1. Develop communication channels integration process, the performance
2. Provide customer service assessment process and the information
3. Develop employee loyalty management process. The first two represent
4. Conduct employee training strategic CRM; the multi-channel integration
5. Offer customer incentives process represents operational CRM; the
6. Provide product awareness information management process is analytical
7. Reliability CRM.
8. Be flexible 6. The Francis Buttle Model
9. People over technology The model consists of five primary stages and
10. Know customer names four supporting conditions leading towards the
end goal of enhanced customer profitability. The

46
TOTAL QUALITY MANAGEMENT
Customer-Driven Quality
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

primary stages of customer portfolio analysis,

customer intimacy, network development, value
proposition development and managing the
customer lifecycle is sequenced to ensure that a
company with the support of its network of
suppliers, partners, and employees, creates and
delivers value propositions that acquire and
retain profitable customers.

BENEFITS OF CRM
Benefits of CRM The benefits of adopting CRM
processes are:
● Develop better communication
channels
● Collect customer related data
● Create detailed profiles of individual
customers
● Increased customer satisfaction
● Access to customer account history,
order information and customer
information
● Identify new selling opportunities
● Increased market share and profit
margin and revenues
● Reduced costs of buying and using
product and services
● Better stand against global competition

47
TOTAL QUALITY MANAGEMENT
TQM in Services
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

INTRODUCTION VALUE IN THE SERVICE INDUSTRY

Service Sector is an important sector in the world

economy today. The service sector is one of the
important sectors for the social growth of a
country. Globally, the service sector is the largest
and fastest growing sector contributing to the
global output and employing more people than
any other sector.

SERVICE INDUSTRY AND QUALITY

Service can be defined as “any primary or
complementary activity that does not directly
produce a physical product, i.e. the non-goods
part of the transaction between the buyer
(customer) and the seller (provider).”

CLASSIFICATION OF SERVICES
In the service process matrix, Schmenner
categorized the services into four categories.
They are: service factory, service shop, mass
service and professional service.

High degree of Interaction and Customization

- The services categorized in service
shops and professional services fall
within a high degree of interaction and
customization.
Low degree of Interaction and Customization
- The services categorized under service
factory and mass service have a low
degree of interaction and customization.
High degree of Labour Intensity
- Mass service and professional services
have a high degree of labor intensity.

48
TOTAL QUALITY MANAGEMENT
TQM in Services
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

Low degree of Labour Intensity ● Warranty

- Service factories and service shops The product warranty signifies a
have a low degree of labor intensity. dedication to ensuring a service level
that meets customer expectations. It
DEFINING SERVICE QUALITY embodies the organization's public
- Service quality is defined as meeting or commitment to product quality,
exceeding customer expectations and accompanied by a guarantee of
is considered an accomplishment in customer satisfaction.
customer service. ● Price
- Customers establish service In today's market, customers are willing
expectations based on previous to invest more for perceived value.
experiences, word-of-mouth They regularly compare products and
recommendations, and advertising. services between organizations to
- Service quality can be described as the identify the provider offering the most
gap between customer expectations value.
and the perceived service. When ● Reputation
expectations exceed performance, Many of us tend to evaluate
perceived quality falls below organizations based on our overall
satisfactory levels, leading to customer interaction with them. Complete
dissatisfaction. customer satisfaction hinges on the
A survey conducted by the American Society for entirety of the experience with the
Quality regarding factors influencing end-user organization, not solely on the product.
perceptions of improvement showed the COMPONENTS OF SERVICE SYSTEM
following rankings. QUALITY
● Performance
Performance is defined by its "fitness 1. Employees
for use," signifying that the product or - Dedicated staff members are crucial for
service is prepared for customer use enhancing services. The foundation of
upon purchase. Additional factors to the service quality system lies in
take into account include: prioritizing customer satisfaction.
- Availability: The likelihood that Customers primarily assess a service
the product will function when based on the quality of interaction with
needed. staff.
- Reliability: The absence of 2. Information Technology
failures over time. - In modern service organizations,
- Maintainability: The ease of information technology plays a critical
keeping the product role in ensuring quality due to the large
operational. amounts of data they handle and the
● Features growing demand from customers for
The distinguishable characteristics or faster service.
attributes of a product or service can be
categorized as psychological, DIMENSIONS OF SERVICE QUALITY
time-oriented, contractual, ethical, and ● Reliability - It refers to the capacity to
technological. These features represent consistently and accurately deliver the
secondary aspects of a product or service as promised. It entails the
service. company fulfilling its commitments
● Service regarding service provision, delivery,
Services are highlighted to provide pricing, and issue resolution.
customers with additional value. ● Responsiveness - This dimension
Customer service, being intangible, highlights the importance of being
cannot be easily measured. Achieving attentive and prompt in addressing
product excellence is simpler than customer inquiries, questions,
delivering exceptional customer complaints, and issues. It involves a
satisfaction.

49
TOTAL QUALITY MANAGEMENT
TQM in Services
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

willingness to assist customers should prioritize measuring customer

promptly. perceptions regarding critical success factors
● Assurance - Assurance refers to the such as service promptness, staff
combination of employees' expertise responsiveness, and problem understanding.
and politeness, along with the firm and EMPLOYEE FEEDBACK
its employees' capacity to instill trust Employees are often an untapped source of
and confidence. information. Employees can offer insight into
● Empathy - It is described as the conditions that inhibit service quality in the
personalized care and attention that the organization. Although customer research
company gives to its customers. The reveals what is happening, employee research
essence of empathy lies in reveals why it is happening. Employee feedback
demonstrating, through customized or should be proactively solicited.
personalized service, that each
customer is recognized as unique and FOCUS GROUPS
valued. A focus group serves as a research technique
● Tangibles - Tangibles refer to the aimed at uncovering genuine customer opinions.
physical aspects of facilities, It involves gathering a group of customers in a
equipment, personnel, and meeting room to respond to a set of carefully
communication materials. structured questions
TOLL FREE TELEPHONE NUMBERS
PROCESS OF SERVICE QUALITY Toll-free service phone numbers are an effective
MANAGEMENT technique for receiving complaint feedback.
1. Setting the right standard Organizations can respond faster and more
- Having the correct standard for service cheaply to the complaint. Such a number does
quality is essential; otherwise, the not, however, reach those who have decided not
quality assurance process may provide to buy the product or those who have discovered
unsuitable service levels. Quality some likable features in a competitor’s product.
standards are not limited to REPORT CARD
manufacturing but apply to all other The report card is a very effective
functions as well. information-gathering tool. It is usually sent to
2. Implementing Quality Service each customer on a quarterly basis. The data
- The implementation process requires are analyzed to determine areas for
full commitment from every level of the improvement.
organization, with teamwork playing a
THE INTERNET
crucial role. Achieving effective
implementation of service quality is By employing keyword searches, managers can
attainable through internal programs scan newsgroups, electronic bulletin boards, and
like TQM. mailing lists, especially when aware of the
3. Monitoring Service Quality company's product relevance to specific
- Several tools and techniques employed activities or professions.
to monitor service quality include THE SERVQUAL MODEL
statistical tools, quality function
deployment, internal performance SERVQUAL is the most popular method of
analysis, and customer satisfaction service quality measurement in almost all the
analysis. service industries. Service quality and
satisfaction with the services provided are best
TOOLS USED FOR DETERMINING understood when services are viewed via the
CUSTOMER EXPECTATIONS Gaps Model of service quality.

CUSTOMER SATISFACTION SURVEY

Customer satisfaction surveys can be conducted
through various methods like face-to-face
interactions, phone calls, or mailed
questionnaires. A successful survey program

50
TOTAL QUALITY MANAGEMENT
TQM in Services
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

8. Courtesy: Politeness, respect and

friendliness.
9. Understanding: Knowing the customer,
his needs and requirements.
10. Access: Case of approach and contact.
SERVQUAL APPLICATIONS
The five gaps in accordance with the
SERVQUAL model are:
Gap 1: Between customers’ expectations and
management’s perceptions of customer’s
expectations:
Gap 2: Between management’s perceptions of
customers’ expectations and service quality
specifications
Gap 3: Between service quality specifications
and service delivery
Gap 4: Between service delivery and external
communications to customers
Gap 5: Between customers’ expectations and
perceived service

SCHOOLS OF QUALITY
Gap 1: Customers’ expectations versus Let's delve into the key pillars and principles that
management perceptions characterize these innovative schools.
Gap 2: Management perceptions versus service 1) Issue with Current Instruction
specifications Systems: Educators recognize the
Gap 3: Service specifications versus service limitations of current instructional
delivery systems for quality education in the
Gap 4: Service delivery versus external 21st century.
communication 2) TQM Philosophy for Schools of
Gap 5: The discrepancy between customer Quality: Total Quality Management
expectations and their perceptions of the service (TQM) is considered for creating
delivered "schools of quality" with a
customer-focused, continuous
Valarie A. Zeithaml, A. Parasuraman and improvement, systems-oriented, and
Leonard L. Berry also suggest that the criteria leadership-driven approach.
used by consumers, which are important in 3) Four Pillars of Schools of Quality:
molding their expectation and perceptions of ● Customer-Supplier Focus:
service fit ten dimensions: Schools prioritize meeting
1. Tangibles: Physical evidence. human needs and view
2. Reliability: Getting it right the first time students as both workers and
and honoring promises. customers.
3. Responsiveness: Willingness, ● Continuous Improvement
readiness to provide service. Culture: Dedication to
4. Communication: Keeping customers improvement within individual
informed in a language they can spheres, with support teams
understand. for mutual assistance.
5. Credibility: Honesty and ● Process/Systems Approach:
trustworthiness. Acknowledges that
6. Security: Physical, financial and organizational issues often
confidentiality. stem from systems,
7. Competence: Possession of required emphasizing collaboration for
skills and knowledge of all employees. continuous improvement.

51
TOTAL QUALITY MANAGEMENT
TQM in Services
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

● Consistent Quality Leadership: And in order to achieve service quality the

Leadership plays a pivotal following prerequisites are:
role, fostering fearless 1. Visionary leader - A visionary leader is
environments, innovation, and essential in achieving quality. The vision
dedication to TQM principles. of a leader guides an organization and
4) Assessment and Improvement: its effort to attain a high standard of
Marks are seen as inadequate; quality as it shows the leader’s idea of
assessments indicate teacher success where the future lies.
through student achievements. 2. Setting high performance standards
5) Adapting to Modern Environment: - Every employee should understand
Recognizing the importance of service that they are expected to give their
quality in education, promoting best. Casual attitudes in completing
innovation, and collaboration with work are not tolerated.
external entities. 3. Management’s commitment and
support - The top management shall
SERPVAL SCALE fully support the process of quality
Personal values are the final frontier in a improvement.
purchase decision. A customer looks at the 4. Preparing the employees - The
following dimension in deciding before making a organization should ensure that
purchase: employees are adequately trained to
● The service attributes - Core functional provide high-quality service. Training
attributes or service attributes that programs should be implemented to
identify the basic usefulness of the enhance technical skills as well as
service itself. interpersonal relations and
● The service quality - The difference communication abilities.
between the customers’ expectations 5. System for addressing customer
and the actual performance of the complaints - A system for managing
service delivery. both complaints and suggestions
● Service value - Tradeoff between the should be in place. The customers
perception of what is given and should be notified of the actions and
received. This determines whether the steps taken in response, as well as
service received greats the cost of thanked for their feedback.
availing the service. 6. System for monitoring service
● Service personal values - Key elements quality - Services that are delivered
that make it possible to better should be continuously monitored in
understand consumer behavior order to assess how well the services
are from the customers’ perspective
IMPROVING THE SERVICE QUALITY and how satisfied they are of the
services offered. This involves
In order to improve service quality, one must conducting internal performance
maintain the following lessons: evaluations, analyzing customer
1. Listening feedback, and conducting specialized
2. Reliability marketing research to identify areas for
3. Basic Service improvement.
4. Service Design
5. Recovery problem again.
6. Fair Play - S
7. Teamwork
8. Employee Research
9. Servant Leadership

PREREQUISITES FOR ACHIEVING

SERVICE QUALITY

52
TOTAL QUALITY MANAGEMENT
Quality Management System
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

on December 15, 2000, by the updated

INTEGRATED MANAGEMENT SYSTEM and improved ISO 9001:2000.
QUALITY MANAGEMENT SYSTEM ● On November 13, 2008, ISO 9001:2008
● Quality management system refers to a was formally published and offers a set
set of processes, procedures, policies, of uniform specifications for a QMS.
and documentation that an organization ● The fourth edition (ISO 9001:2008),
uses to ensure that its products or which was technically amended by the
services consistently meet or exceed adoption of a revised clause sequence,
customer expectations. revised quality management principles,
● In simple terms, it is a framework that and new concepts, is canceled and
allows businesses to monitor and replaced by the fifth edition (ISO
improve the quality of their products or 9001:2015).
services throughout the entire
production or service delivery process. ISO 9001:2015
● Two most important objectives in the
INTEGRATED MANAGEMENT SYSTEM revision of the ISO 9000 series of
● An integrated management system standards are
(IMS) combines all related components ○ to develop a simplified set of
of a business into one system for easier standards that will be equally
management and operations. applicable to small as well as
● Quality (QMS), Environmental (EMS), medium and large
and Occupation Health and Safety organizations and;
Management Systems (OHSMS) are ○ the amount and detail of
often combined and managed as an documentation required should
IMS. These systems are not separate be more relevant to the
systems that are later joined together, desired results of the
rather they are integrated with linkages organization’s process
so that similar processes are activities.
seamlessly managed and executed
without duplication ● Changes are done in: Structure, Key
Concepts, Terminology
DEVELOPMENT OF THE ISO 9000 ● All the requirements of ISO 9001:2015
STANDARDS are generic and are intended to be
applicable to any organization,
ISO 9000 STANDARDS regardless of its type or size, or the
● Internationally acknowledged standard products and services it provides.
for quality management systems (QMS) ● ISO 9001:2015 specifies requirements
● It is the QMS standard that is most for a QMS when an organization:
commonly utilized globally. ○ Needs to demonstrate its
● Contains detailed explanations of the ability to consistently provide
seven quality management principles products and services that
● It also includes many of the words and meet customer and applicable
definitions from ISO 9001, making it a statutory and regulatory
helpful companion guide for developing requirements
a productive QMS. ○ Aims to enhance customer
● With QMS, ISO 9004 offers guidance satisfaction through the
on how to achieve long-term success. effective application of the
system including processes for
DEVELOPMENT OF THE ISO 9000 improvement of the system
STANDARDS and the assurance of
● The ISO 9000 standards were released conformity to customer and
in 1987 applicable statutory and
● The three 1994 versions of ISO 9001, regulatory requirements.
ISO 9002, and ISO 9003 were replaced

53
TOTAL QUALITY MANAGEMENT
Quality Management System
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

● Three pillars of the ISO 9001:2015 products or services to customers, which

○ Process approach ultimately improve customer satisfaction.
○ Risk-based thinking
○ Continual improvement The design and implementation of an
organization’s qualified management systems is
● Compatible with influenced by
○ ISO 14001:2015 ● Its organizational environment, changes
Environmental Management in that environment, and the risk
System associated with that environment.
○ ISO 45001:2016 Occupational ● Its varying needs.
Health and Safety ● Its particular objectives.
Management System ● The products it provides.
● The processes it employs.
● Benefits of ISO 9001 Certification ● Its size and organizational structure.
○ Customer satisfaction -
Deliver products that Risk-based thinking enables an organization to
consistently meet customer determine the factors that could cause its
requirements. processes and its QMS to deviate from the
○ Reduced operating cost - planned results and to put in place the
Continual improvement of preventive controls to minimize negative effects
processes and resulting to make maximum use of opportunities as they
operational efficiencies means arise.
money saved.
○ Improved stakeholder In this International Standard, the following
relationships - Improve the verbal forms are used:
perception of your organization ● Shall – requirement
with staff, customers, and ● Should – recommendation
suppliers. ● May – permission
○ Legal compliance - ● Can – possibility or capability
Understand how statutory and
regulatory requirements PROCESS APPROACH
impact your organization and ISO 9000 standards promote the adoption of a
its customers. process approach when developing,
○ Improved risk management - implementing, and improving the effectiveness of
Greater consistency and a QMS to enhance customer satisfaction by
traceability of products and meeting customer requirements.
services mean problems are For organizations that are in the process of
easier to avoid and rectify. implementing or yet to implement a QMS, ISO
○ Proven business credentials 9001:2015 emphasizes a process approach.
- independent verification This includes:
against a globally recognized ● determining the processes necessary
industry standard speaks for the effective implementation of the
volumes. QMS
○ Ability to win more business ● determining the interactions between
- Procurement specifications these processes
often require certification as a ● documenting the processes to the
condition to supply, so extent necessary to assure their
certification opens doors. effective operation and control.
QUALITY MANAGEMENT SYSTEMS
BENEFITS OF APPLYING PROCESS
QMS is the system that records the rules, APPROACH IN A QMS
practices, and controls required for an Management of the processes and the system
organization to produce and provide high-quality as a whole can be achieved using the PDCA
cycle with an overall focus on risk-based thinking

54
TOTAL QUALITY MANAGEMENT
Quality Management System
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

aimed at taking advantage of the opportunities ● Clause 9. Performance Evaluation

and preventing undesirable results. ● Clause 10. Improvement
● Annex A. Clarification of new structure,
PDCA CYCLE terminology, and concepts Annex B.
Plan: Establish the objectives of the system and Other International Standards on QMS
its processes, and the resources needed to developed by ISO/TC176 Bibliography
deliver the results in accordance with customers’
requirements and the organization’s policies, and BASIC CLAUSES (ISO 9001:2015)
identify and address risks and opportunities; CLAUSE 1: SCOPE
Do: Implement what was planned; ● All the requirements of QMS are
Check: Monitor and (where applicable) measure generic and are intended to be
processes and the resulting products and applicable to any organization,
services against policies, objectives, regardless of its type or size, or the
requirements, and planned activities, and report products and services it provides.
the results; CLAUSE 2: NORMATIVE REFERENCES
Act: Take actions to improve performance, as ● The following documents, in whole or in
necessary. part, are normatively referenced and
are indispensable for its application.
The PDCA cycle can be applied to all processes CLAUSE 3: TERMS AND DEFINITION
and to the QMS as a whole. QMS Model ● For the purposes of this document, the
illustrates how Clauses 4 to 10 can be grouped terms and definitions given in ISO 9000
in relation to the PDCA cycle. (ISO 9000: 2015, Quality Management
PROCESS APPROACH Systems-Fundamentals and
Vocabulary) apply. Throughout the text
QMS Model of this International Standard, wherever
the term “product” occurs, it can also
mean “service”

MAIN CLAUSES (ISO 9001:2015)

CLAUSE 4: CONTEXT OF THE
ORGANIZATION
● This clause requires the companies to
identify, monitor, and review external
and internal issues that are relevant to
its purpose and its strategic direction
that affect its performance which could
have an impact on its QMS.
ISO 9001:2015 QUALITY MANAGEMENT Clause 4.1: Understanding the organization and
SYSTEMS REQUIREMENTS its context
Clause 4.2: Understanding the needs and
The requirements to be met for ISO 9001:2015 expectations of interested parties - Organizations
Quality Management Systems consists of 10 are required to identify “relevant requirements” or
clauses. Clauses 1 to 3 are basic clauses and “relevant interested parties,” and once identified,
Clauses 4 to 10 are main clauses. the organizations have to monitor and review
such information.
ISO 9001:2015 STRUCTURE Clause 4.3: Determining the scope of the QMS -
● Clause 1. Scope The scope of the QMS sets its boundaries,
● Clause 2. Normative References identifying what requirements of the QMS are
● Clause 3. Terms and Definitions applicable and what are not.
● Clause 4. Context of the Organization Clause 4.4: QMS and its processes - This clause
● Clause 5. Leadership requires organizations to establish processes
● Clause 6. Planning that, once established, are maintained and
● Clause 7. Support continually improved.
● Clause 8. Operation

55
TOTAL QUALITY MANAGEMENT
Quality Management System
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

CLAUSE 5: LEADERSHIP Clause 8.2: Requirements for products and

Clause 5.1: Leadership and Commitment services
- Clause 5.1.1: Leadership and Clause 8.3: Design and development of products
commitment to Quality Management and services
System - This clause will require Clause 8.4: Control of externally provided
management to demonstrate their processes, products, and services
leadership and commitment to the QMS Clause 8.5: Production and service provision
by taking responsibility for the effective Clause 8.6: Release of products and services
running of the organization’s QMS. Clause 8.7: Control of nonconforming outputs
- Clause 5.1.2: Customer Focus CLAUSE 9: PERFORMANCE EVALUATION
Clause 5.2: Quality Policy Clause 9.1: Monitoring, measurement, analysis,
- Clause 5.2.1: Establishing the Quality and evaluation
Policy Clause 9.2: Internal audit
- Clause 5.2.2: Communicating the Clause 9.3: Management review
Quality Policy CLAUSE 10: IMPROVEMENT
Clause 5.3: Organizational roles, responsibilities, Clause 10.1: General
and authorities Clause 10.2: Nonconformity and corrective
CLAUSE 6: PLANNING action
Clause 6.1: Actions to address risks and Clause 10.3: Continual improvement
opportunities
- Clause 6.1.1: Consider Risks and ANNEX A (INFORMATIVE): CLARIFICATION
Opportunities OF NEW STRUCTURE, TERMINOLOGY, AND
- Clause 6.1.2: Plan to Manage Risks CONCEPTS
and Opportunities It gives further explanation on some of the
Clause 6.2: Quality objectives and planning to changes and updates to ISO 9001. Annex A
achieve them explains the concepts that are included in the
- Clause 6.2.1: Establish Quality requirements.
Objectives for all Relevant Areas ● A1 structure and terminology:
- Clause 6.2.2: Develop Plans to Achieve ● A2 product and service:
Objectives and Evaluate Results ● A3 understanding the needs and
- Clause 6.3: Planning of changes expectations of interested parties:
CLAUSE 7: SUPPORT ● A4 Risk-based thinking:
Clause 7.1: Resources ● A5 Applicability:
- Clause 7.1.1: General ● A6 Documented information:
- Clause 7.1.2: People ● A7 Organizational knowledge:
- Clause 7.1.3: Infrastructure ● A8 Control of externally provided
- Clause 7.1.4: Environment for the processes, products, and services
Operation of Processes
- Clause 7.1.5: Monitoring and Measuring ANNEX B (INFORMATIVE): OTHER
Resources INTERNATIONAL STANDARDS ON QUALITY
- Clause 7.1.6: Organizational MANAGEMENT AND QMS DEVELOPED BY
Knowledge ISO/TC 176
Clause 7.2: Competence Annex B lists all ISO standards related to ISO
Clause 7.3: Awareness 9001 and clauses to which each of the listed
Clause 7.4: Communication standards is referring.
Clause 7.5: Documented Information
- Clause 7.5.1: General
- Clause 7.5.2: Creation and Updating MANDATORY DOCUMENTS AND
- Clause 7.5.3: Control of Documented RECORDS REQUIRED BY ISO 9001:2015
Information A particular support requirement is now
- Clause 7.5.3.2: Control How QMS considered as documented information.
Documents and Records are Controlled
CLAUSE 8: OPERATION Documentation Information is the information
Clause 8.1: Operational planning and control required to be controlled and maintained by an

56
TOTAL QUALITY MANAGEMENT
Quality Management System
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

organization and the medium on which it is ● Criteria for evaluation and selection of
contained. suppliers (Clause 8.4.1)

It can be in any format and media and from any NON-MANDATORY DOCUMENTS:
source such as paper, magnetic, electronic, or 1. Procedure for determining context of
optical computer disc, photograph, master the organization and interested parties
sample, and so on. It can also be referred as (Clauses 4.1 and 4.2)
follows: 2. Procedure for addressing risks and
● QMS, including related processes; opportunities (Clause 6.1)
● Information created in order for the 3. Procedure for competence, training and
organization to operate awareness (Clauses 7.1.2, 7.2, and 7.3)
(documentation); Procedure for equipment maintenance
● Evidence of results achieved (records). and measuring equipment (Clause
7.1.5)
It is stressed that ISO 9001 requires (and always 4. Procedure for document and record
has required) a “Documented quality control (Clause 7.5)
management system,” and not a “system of 5. Sales procedure (Clause 8.2)
documents.” Some of the main objectives of an 6. Procedure for design and development
organization’s documented information are as (Clause 8.3)
follows: 7. Procedure for production and service
● Communication of Information - It is provision (Clause 8.5)
used as a tool for information 8. Warehousing procedure (Clause 8.5.4)
transmission and communication. 9. Procedure for management of
● Evidence of conformity - Provision of nonconformities and corrective actions
evidence that what was planned and 10. (Clauses 8.7 and 10.2)
what has actually been done. 11. Procedure for monitoring customer
● Knowledge Management - The satisfaction (Clause 9.1.2)
inclusion of Knowledge Management 12. Procedure for internal audit (Clause
(KM) within the recently released ISO 9.2)
9001:2015 marks a huge change within 13. Procedure for management review
the world of KM. (Clause 9.3)
● To disseminate and preserve the
organization’s experiences MANDATORY RECORDS THAT ARE ONLY
MANDATORY IN CASES WHEN THE
THE DOCUMENTATION PYRAMID RELEVANT CLAUSE IS NOT EXCLUDED:

DOCUMENTS AN ORGANIZATION NEEDS TO

PRODUCE TO BE COMPLIANT WITH ISO
9001:2015:
● Scope of the QMS (Clause 4.3)
● Quality policy (Clause 5.2)
● Quality objectives (Clause 6.2)

57
TOTAL QUALITY MANAGEMENT
Quality Management System
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

58
TOTAL QUALITY MANAGEMENT
Management Audit
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

organization are suitable. In 2002, ISO first

NATIONAL ACCREDITATION BOARD FOR published an audit standard. This was revised in
CERTIFICATION BODIES 2011 and was published exactly on November
The National Accreditation Board for Certification 15, 2011. The latest version of ISO 19011:2011 –
Bodies (NABCB) is a constituent board of the “Guidelines for auditing management systems” –
Quality Council of India. It provides accreditation became the new audit standard. It defined audit
to certification and inspection bodies based on as a “systematic, independent, and documented
assessment of their competence as per the process for obtaining audit evidence (records,
Board’s criteria and in accordance with statements of fact, or other information that are
international standards and guidelines. Their relevant and verifiable) and evaluating it
goal is to offer services adhering to national and objectively to determine the extent to which the
international norms, ensuring equal audit criteria (set of policies, procedures, or
opportunities, transparency, integrity, and requirements) are fulfilled.”
confidentiality. NABCB extends accreditation COMPARISON BETWEEN ISO 19011:2011
services to certification and inspection bodies AND ISO 19011:2002
within SAARC nations, and potentially beyond.
The NABCB is a member of IAF, PAC, and a The following features comparison between the
signatory to MLAs for various systems. first and second edition in terms of:
Additionally, NABCB is a full member of 1. Scope
International Laboratory Accreditation ● ISO 19011:2002 – applied only to
quality and environmental systems ➢
Objectives of the National Accreditation Board ● ISO 19011:2011 – applies to all types of
for Certification Bodies (NABCB) management systems (risk
● To be equally accessible to all the management systems, quality
certification body applicants who wish management systems, energy
to be accredited to the criteria of the management systems, safety
Board within its scope and capability management systems, health
and within the geographical limitations management systems, service
decided by the Board. management systems, records
● To upgrade criteria of accreditation in management systems, disaster
line with international improvements management systems, document
and to foster improvement in the quality management systems, food safety
of certification process with the support management systems, emergency
of certification bodies. management systems, sustainability
● To be impartial in its decision on criteria management systems, environmental
and process of accreditation. management systems, business
● To seek mutual recognition of the continuity management systems,
accreditation schemes internationally. information security management
● To be independent of any undue systems, supply chain security
influence of any stakeholder and to management systems, transportation
conduct its business professionally. safety management systems,
organizational resilience management
INTRODUCTION TO ISO AUDIT systems, and occupational health and
Auditing involves physically checking processes safety management systems)
or quality systems to ensure they meet 2. Focus
requirements. It can cover the entire organization ● ISO 19011 2011 applies to first- and
or focus on specific functions, processes, or second-party audits, whereas ISO
production steps. An ISO audit is conducted to 17021: 2015 applies to third-party
verify whether the management system is audits.
complying with relevant International 3. Principle
Organization for Standardization (ISO) standards ● The new standard now emphasizes
or not. It is a way to check and ensure that the confidentiality and information security.
actions taken to meet quality objectives of the 4. Concept

59
TOTAL QUALITY MANAGEMENT
Management Audit
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

● The new standard now wants you to purpose of a management audit relates to
think about risk and expects you to management interests such as assessment of
consider the risks that could affect the area performance or efficiency. An audit may
achievement of audit program also be classified as internal or external
objectives. It also suggests you allocate depending on the interrelationships among
audit program resources so that more participants. Internal audits are performed by
significant matters receive priority. employees of an organization. External audits
Adding more resources to more are performed by an outside agent. Internal
important matters is called risk based audits are often referred to as first-party audits,
auditing. whereas external audits can be either second- or
5. Method third-party audits.
● Consider using remote audit methods in ● Product Audit - An examination of a
addition to onsite audit methods. particular product or service (hardware,
Remote audit methods are carried out processed material, or software) to
away from the auditee’s physical evaluate whether it conforms to the
location. They include long distance requirements, that is, specifications,
interviews and the use of interactive performance standards, and customer
electronic communications. requirements.
6. Annex ● Process Audit - It is a verification to
● The standard now has two annexes. confirm whether the processes are
Annex A describes the type of working within the established limits. It
knowledge and skill that management evaluates an operation or method
system auditors should have, and against predetermined instructions or
Annex B is designed to help auditors to standards to measure conformance to
plan and perform their work. these standards and the effectiveness
7. Purpose of the instructions. Such an audit may:
● ISO 19011 distinguishes between 1. Check conformance to defined
internal and external auditors. Internal requirements such as time, accuracy,
auditors perform first-party audits, temperature, pressure, composition,
whereas external auditors perform responsiveness, amperage, and
second- and thirdparty audits. An component mixture.
auditor may specialize in different types 2. Examine the resources (equipment,
of audits based on the audit purpose, materials, and people) applied to
such as to verify compliance, transform the inputs into outputs, the
conformance, or performance. Some environment, the methods (procedures
audits have special administrative and instructions) followed, and the
purposes such as auditing documents, measures collected to determine
risk, performance, or following up on process performance.
completed corrective actions. 3. Check the adequacy and
8. Types of Audits effectiveness of the process controls
ISO 19011:2011 also distinguishes established by procedures, work
between combined audits and joint audits. When instructions, flowcharts, and training
two or more management systems of different and process specifications.
disciplines are audited together at the same ● System Audit - It is an audit conducted
time, it is called a combined audit, and when two on a management system. It can be
or more auditing organizations cooperate to audit described as a documented activity
a single auditee organization, it is called a joint performed to verify, by examination and
audit. There are three discrete types of audits: evaluation of objective evidence, that
product (which includes services), process, and applicable elements of the system are
system. However, other methods, such as a appropriate and effective and have
desk or document review audit, may be been developed, documented, and
employed independently or in support of the implemented in accordance and in
three general types of audits. Some audits are conjunction with specified requirements.
named according to their purpose or scope. The

60
TOTAL QUALITY MANAGEMENT
Management Audit
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

● Internal and External Audits (1st, 2nd, Clause 3: Audit Terms and Definitions
and 3rd -party audits) ➢ 1. Auditee: An organization (or part of an
1. First-party audits - Referred as organization) that is being audited. ➢
internal audits and use ISO 2. Auditor: A person who carries out
19011:2011. audits.
2. Second-party audits - An external 3. Audit client: Any person or
audit that uses ISO 19011:2011, which organization that requests an audit.
is performed on a supplier by a 4. Audit conclusions: Drawn by the audit
customer or by a contracted team after the audit has been
organization on behalf of a customer. A completed and after audit findings and
contract is in place, and the goods or audit objectives have been considered.
services are being, or will be, delivered. Audit findings result from a process that
3. Third-party audits - Use ISO IEC evaluates audit evidence and compares
17021:2015, which is performed by an it against audit criteria.
audit organization independent of the 5. Audit criteria: Includes policies,
customer– supplier relationship and is procedures, and requirements
free of any conflict of interest. 6. Audit evidence: Includes records,
Independence of the audit organization factual statements, and other verifiable
is a key component of a third-party information that is related to the audit
audit. criteria being used, policies,
procedures, and requirements.
COMPARISON BETWEEN ISO 19011:2011 7. Audit findings: It results from a
VERSUS ISO IEC 17021:2015 process that evaluates audit evidence
and compares it against audit criteria.
8. Audit plan: Specifies how you intend to
conduct a particular audit.
9. Audit program: A set of arrangements
that are intended to achieve a specific
audit purpose within a specific time
frame.
Clause 1: Scope
10. Audit scope: The scope of an audit is
● This international standard provides
a statement that specifies the focus,
guidance on auditing management
extent, and boundary of a particular
systems including the principles of
audit. The scope can be specified by
auditing, managing an audit
defining the physical location of the
programme, and conducting
audit, the organizational units that will
management system audits, as well as
be examined, the processes and
guidance on the evaluation of
activities that will be included, and the
competence of individuals involved in
time period that will be covered.
the audit process, including the person
11. Audit team: Made up of one or more
managing the audit programme,
auditors, one of whom is appointed to
auditors, and audit teams. It is
be the audit leader and may also
applicable to all organizations that need
include audit trainees.
to conduct internal or external audits of
12. Competence: Being able to apply
management systems or manage an
knowledge and skill to achieve intended
audit programme. The application of
results and having the knowledge and
this international standard to other
skill that you need and knowing how to
types of audits is possible, provided that
apply it.
special consideration is given to the
13. Conformity: “Fulfilment of a
specific competence needed.
requirement.”
Clause 2: Normative Reference
14. Guide: Appointed by auditee
● No normative references are cited. This
organizations to help auditors.
clause is included in order to retain
15. Management system: A set of
clause numbering identical with other
interrelated or interacting elements that
ISO management system standards.

61
TOTAL QUALITY MANAGEMENT
Management Audit
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

organizations use to establish and Clause 5.4.4: Selecting the Audit Team
implement policies and set and achieve Members
objectives. Clause 5.4.5: Assigning Responsibility
16. Nonconformity: “non-fulfilment of a for an Individual Audit to the Audit Team
requirement.” Leader
17. Observer: Accompany auditors and Clause 5.4.6: Managing the Audit
witness audit activities. However, they Programme Outcome
are not audit team members and Clause 5.4.7: Managing and
therefore do not perform audit Maintaining Audit Programme Records
functions. Clause 5.5: Monitoring the Audit
18. Risk: “Effect of uncertainty on Programme
objectives” and an effect is a positive or Clause 5.6: Reviewing and Improving
negative deviation from what is the Audit Programme
expected. Clause 6: Performing an Audit
19. Technical expert: Support audit teams Clause 6.1: General
by providing specific expertise or Clause 6.2: Initiating an Audit
knowledge about the organization, Clause 6.2.2 Establishing Initial Contact
process, or activity being audited or with the Auditee
about the auditee’s language or culture. Clause 6.2.3: Determining the
They do not act as auditors. Feasibility of the Audit
Clause 4: Audit Principles Clause 6.3: Preparing Audit Activities
● Auditing is characterized by reliance on Clause 6.4: Conducting the Audit
a number of principles. Activities
● It is based on the following six Clause 7: Competence and Evaluation of
principles: Auditors
○ Integrity
○ Fair Presentation ISO IEC 17021:2015
○ Due professional care ISO/IEC 17021:2015 outlines principles and
○ Confidentiality requirements for the competence, consistency,
○ Independence and impartiality of bodies conducting audits and
○ Evidence-based approach certification of various management systems.
Clause 5: Managing an Audit Program Certification bodies adhering to this standard are
Clause 5.1: Create your Audit Program not obligated to provide certifications for all types
Clause 5.2: Create your Audit Program of management systems.
Clause 5.3: Establishing the Audit Four Phases of an Audit
Program 1. Audit Preparation:
Clause 5.3.2: Competence of the ● Involves activities conducted by various
Person Managing the Audit Programme stakeholders, including the auditor, lead
Clause 5.3.3: Establishing the Extent of auditor, client, and audit program
the Audit Programme manager, to align the audit with the
Clause 5.3.4: Identifying and Evaluating client's objectives.
Audit Programme 2. Audit Performance:
Clause 5.3.5: Establishing Procedures ● Also known as the fieldwork phase, this
for the Audit Programme stage encompasses data gathering
Clause 5.3.6: Identifying Audit throughout the audit duration, from
Programme Resources arrival at the audit location to the exit
Clause 5.4: Implementing the Audit meeting.
Programme 3. Audit Reporting:
Clause 5.4.1: General ● Aims to communicate investigation
Clause 5.4.2: Defining the Objectives, results effectively through an audit
Scope, and Criteria for an Individual report.
Audit 4. Audit Follow-Up and Closure:
Clause 5.4.3: Selecting the Audit ● According to ISO 19011, Clause 6.6,
Methods the audit is considered complete when

62
TOTAL QUALITY MANAGEMENT
Management Audit
CIVCM0425 - 4 | ENGR. Vien Carlo M. Amora | SEM 2 2024

all planned audit activities have been

executed or as otherwise agreed with
the audit client.

CERTIFICATION
An accreditation body that has received
recognition from one or more accrediting bodies,
accreditation certificates bearing the
accreditation body's logo (choice of the
organization seeking certification) may be issued
subject to the organization's adherence to
relevant standards and the proficiency of its
managerial and technical resources.
● NAAC
Education is fundamental to national
development, emphasizing the importance of
both increased access and quality in higher
education programs. The National Assessment
and Accreditation Council (NAAC) aids
institutions in assessing their performance
against set parameters, fostering participation
and introspection.
● NBA
The National Board of Accreditation
(NBA) in India originated under the AICTE Act in
1994 to conduct periodic evaluations of technical
institutions and programs according to set
norms.

63