Subject: Total Quality Management

After midterm
Typical measurements (Cost, Time, HR, Marketing,
Administrative measures and so on)
In the context of Total Quality Management (TQM) or broader quality improvement efforts,
organizations typically use a variety of measurements to assess their performance and
progress.

These measurements span various aspects of the organization, including cost, time, human
resources (HR), marketing, administrative functions, and more. Here are some typical
measurements for each category:

1. Cost Measurements:
• Cost of quality (COQ):

This includes both the cost of conformance (preventing defects) and the cost of non-
conformance (failure to meet quality standards).

• Cost per unit:

The cost incurred to produce each unit of product or service.

• Return on Investment (ROI):

The financial return gained from investing in quality improvement initiatives compared to the
cost of implementing those initiatives.

2. Time Measurements:
• Cycle Time:

This measures the total time required to complete a process, task, or activity from start to
finish. It includes all stages of production or service delivery, such as processing time,
waiting time, and transit time.

• Lead time:

The time it takes to fulfill a customer order, from the moment it is placed to the moment it is
delivered. It reflects the responsiveness and efficiency of the organization's operations.

• Time-to-market:

The time it takes to develop and launch a new product or service into the market.

3. Human Resources (HR) Measurements:

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• Employee Satisfaction:

This measures employees' perceptions, attitudes, and satisfaction levels regarding their work
environment, job roles, supervision, compensation, benefits, and career development
opportunities. It may be assessed through surveys, interviews, or focus groups.

• Employee Turnover Rate:

This measures the rate at which employees leave the organization voluntarily or involuntarily
over a specified period. High turnover rates can indicate dissatisfaction, poor morale, or
issues with recruitment and retention.

• Training hours per employee:

The amount of time spent on employee training and development activities.

4. Marketing Measurements:
• Customer Satisfaction:

This measures customers' perceptions, expectations, and satisfaction levels regarding the
organization's products, services, and overall experience. It may be assessed through surveys,
feedback forms, online reviews, or Net Promoter Score (NPS) ratings.

• Market Share:

This measures the organization's share of the total market for its products or services relative
to competitors. It reflects the organization's competitive position and ability to attract and
retain customers.

• Customer retention rate:

The percentage of customers who continue to do business with the organization over time.

5. Administrative Measurements:
• Administrative expenses:

The costs associated with managing administrative functions such as finance, human
resources, and operations.

• Efficiency ratios:

Measures of how effectively administrative resources are utilized to support organizational

goals.

• Accuracy of administrative processes:

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The level of accuracy and reliability in administrative tasks such as billing, invoicing, and
record-keeping.

• Documentation and Record-Keeping:

Keep organized records of quality-related documents, like policies, procedures, and

inspection reports.

• Training and Development:

Provide training for employees to understand quality concepts and how to apply them
in their work.

• Quality Audits:

Regularly check to make sure everyone is following quality standards and procedures.

• Performance Tracking:

Keep an eye on key indicators like product quality and customer satisfaction to see how well
things are going.

• Continuous Improvement:

Always look for ways to make things better and involve employees in finding
solutions.

• Supplier Management:

Choose suppliers carefully and make sure they meet quality standards consistently.

• Customer Feedback:

Listen to customer complaints and use them to fix problems and improve processes.

6. Quality Measurements:
• Defect rates:

The number of defects or errors found in products or services relative to the total units
produced or delivered.

• Customer complaints:

The number of complaints received from customers about product quality, service issues, or
other concerns.

• Process capability indices:

Measures of process performance and the ability to meet customer requirements within
specified tolerances.

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These are just a few examples of the many measurements that organizations may use to
assess performance and track progress in quality improvement efforts. The specific
measurements chosen will depend on the organization's goals, objectives, and areas of focus.

Topic:
Criteria for choosing performance measures and building
performance excellence.
When choosing performance measures and aiming to build performance excellence, it's
important to select criteria that align with organizational goals, strategic objectives, and
stakeholders' expectations. Here are some key criteria for choosing performance measures
and building performance excellence:

1. *Relevance to Organizational Goals:*

- Ensure that performance measures directly support and align with the organization's
mission, vision, values, and strategic objectives. Choose measures that reflect what matters
most to the organization's success and long-term sustainability.

2. *Strategic Alignment:*
- Select performance measures that are closely linked to strategic priorities and key success
factors identified by the organization. Focus on measures that drive progress towards
achieving strategic goals and competitive advantage in the marketplace.

3. *Measurability and Quantifiability:*

- Choose performance measures that are measurable, quantifiable, and objective, allowing
for clear and reliable tracking of progress over time. Avoid measures that are too subjective
or difficult to quantify, as they may lead to ambiguity or inconsistency in performance
evaluation.

4. *Actionability and Controllability:*

- Select measures that are actionable and within the organization's control to influence and
improve. Focus on measures that employees can directly impact through their actions,
behaviors, and decisions, rather than factors outside of their control.

5. *Balance and Diversity:*

- Build a balanced set of performance measures that capture different dimensions of
organizational performance, including financial, operational, customer, employee, and
innovation perspectives. Avoid over-reliance on any single measure or area of performance.

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6. *Timeliness and Responsiveness:*
- Choose measures that provide timely and relevant information to support decision-
making, problem-solving, and performance improvement efforts. Ensure that performance
data is available in a timely manner to enable timely intervention and corrective action.

7. *Benchmarking and Comparison:*

- Consider industry benchmarks, best practices, and comparative data when selecting
performance measures to gauge performance relative to peers, competitors, or industry
standards. Use benchmarking to identify areas of strength and opportunities for improvement.

8. *Transparency and Accountability:*

- Ensure that performance measures are transparently communicated to stakeholders,
including employees, managers, customers, investors, and regulators. Foster a culture of
accountability by holding individuals and teams responsible for achieving performance
targets and outcomes.

9. *Adaptability and Flexibility:*

- Choose performance measures that are adaptable to changing business environments,
market conditions, and organizational priorities. Regularly review and update performance
measures to reflect evolving needs, challenges, and opportunities.

10. *Continuous Improvement Focus:*

- Emphasize a continuous improvement mindset by selecting measures that encourage
learning, innovation, and experimentation. Focus on measures that promote agility,
adaptability, and resilience in the face of change.

Topic:

A Quality Management System (QMS)

A Quality Management System (QMS) is a structured framework of policies, processes, and
procedures aimed at ensuring that an organization can consistently deliver products or
services that meet customer and regulatory requirements. Here’s a detailed overview:

Key Components of a QMS

Quality Policy:
A formal statement from management, closely linked to the business and marketing plan and
to customer needs.

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Quality Objectives:
Specific, measurable goals that the organization aims to achieve to maintain and improve
quality.

Quality Manual:
A document that describes the QMS, including scope, processes, and interaction of these
processes.

Procedures:
Detailed instructions on how to perform specific tasks, ensuring consistency and compliance
with quality standards.

Work Instructions:
Step-by-step guides to perform individual jobs or tasks.

Records:
Evidence of activities performed and results achieved, demonstrating compliance with the
QMS and enabling traceability.

Core Principles of Quality Management

Customer Focus:
Meeting and exceeding customer expectations and requirements.

Leadership:
Establishing unity of purpose and direction for the organization.

Engagement of People:
Involving employees at all levels to utilize their abilities for the organization’s benefit.

Process Approach:
Understanding and managing interrelated processes as a system contributes to the
organization’s effectiveness and efficiency.

Improvement:
Continuous improvement of the organization’s overall performance.

Evidence-based Decision Making:

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Basing decisions on the analysis of data and information.

Relationship Management:
Managing relationships with interested parties, such as suppliers, to optimize performance.

Common QMS Standards

ISO 9001
The most widely recognized QMS standard, focusing on meeting customer expectations and
delivering customer satisfaction.

ISO 13485
Specific to the medical devices industry, emphasizing regulatory compliance and risk
management.

AS 9100
Used in the aerospace industry, incorporating ISO 9001 and additional requirements specific
to aerospace.

IATF 16949
An automotive industry-specific QMS standard.

Implementation Steps
Gap Analysis:
Assessing current processes against QMS requirements.

Planning:
Developing a plan to address identified gaps, including resources, timelines, and
responsibilities.

Training:
Educating employees on QMS principles, procedures, and their roles within the system.

Documentation:
Creating and maintaining the necessary documentation, such as the quality manual,
procedures, and records.

Execution:

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Implementing the QMS as per the plan and ensuring all processes are followed.

Monitoring and Measurement:

Continuously assessing the QMS performance through audits, reviews, and feedback
mechanisms.

Data-driven improvements
Utilizing the results from monitoring and measurement to make data-driven improvements to
the QMS.

A robust QMS helps organizations ensure quality in every aspect of their operations, leading
to sustained success and growth.

Benefit of ISO registration

1. Enhanced Customer Satisfaction
*Consistent Quality*:

- ISO registration ensures that products and services consistently meet customer
expectations, leading to higher satisfaction and repeat business.

*Improved Communication*:

- Clear processes and procedures enhance communication with customers, ensuring their
needs and feedback are effectively addressed.

2. Increased Efficiency and Productivity

*Streamlined Processes*:

- The ISO framework helps organizations streamline their operations by identifying and
eliminating inefficiencies, leading to more efficient use of resources.

*Improved Process Control*:

- Standardized procedures and documentation reduce variability, enhancing process control

and reliability.

3. Better Risk Management

*Proactive Risk Identification*:

- ISO standards require organizations to identify and mitigate risks, reducing the likelihood
of errors and non-conformities.

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*Enhanced Compliance*:

- Adhering to ISO standards helps organizations comply with legal and regulatory
requirements, avoiding potential fines and legal issues.

4. Market Competitiveness
*Reputation and Credibility*:

- ISO certification is a globally recognized mark of quality, enhancing the organization’s

reputation and credibility in the market.

*Increased Market Opportunities*:

- Many clients and partners prefer or require suppliers to have ISO certification, opening up
new business opportunities and markets.

5. Improved Employee Engagement and Morale

*Clear Roles and Responsibilities*:

- ISO standards ensure that roles and responsibilities are clearly defined, leading to better
understanding and ownership among employees.

*Training and Development*:

- Continuous training and development as part of the ISO process keep employees informed
and skilled, improving job satisfaction and performance.

6. Cost Savings
*Reduced Waste*:

- Improved process efficiency and waste reduction lead to significant cost savings.

*Fewer Errors and Rework*:

- Consistent quality control reduces the incidence of errors and the need for costly rework
or recalls.

7. Continuous Improvement
*Systematic Approach*:

- The ISO framework promotes a culture of continuous improvement, encouraging

organizations to regularly review and enhance their processes.

*Data-Driven Decisions*:

- ISO standards emphasize evidence-based decision making, leading to more effective and
informed strategic planning.

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8. Enhanced Supplier Relationships
*Improved Supplier Performance*:

- Standardized processes and quality expectations lead to better supplier performance and
more reliable supply chains.

*Mutual Trust and Cooperation*:

- Clear quality standards and expectations foster stronger, more cooperative relationships
with suppliers.

9. Strategic Alignment
*Alignment with Organizational Goals*:

- ISO registration ensures that quality objectives are aligned with broader organizational
goals, enhancing overall strategic coherence and performance.

10. Audit and Review Mechanism

*Regular Audits*:

- Internal and external audits as part of ISO certification ensure ongoing compliance and
provide opportunities for improvement.

*Feedback and Corrective Actions*:

- A structured approach to feedback and corrective actions ensures that issues are promptly
addressed and resolved.

Environmental Management System (ISO 14000)

Overview
The ISO 14000 family of standards provides practical tools for companies and organizations
to manage their environmental responsibilities.

The standards are designed to address the delicate balance between maintaining profitability
and reducing environmental impact.

ISO 14000 includes the ISO 14001 standard, which specifies requirements for an effective
environmental management system (EMS).

ISO 14001: Key Standard in the ISO 14000 Family

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Purpose
ISO 14001 provides a framework that an organization can follow, rather than establishing
environmental performance requirements. It helps organizations improve their environmental
performance through more efficient use of resources and reduction of waste, gaining a
competitive advantage and the trust of stakeholders.

Structure
ISO 14001 is based on the Plan-Do-Check-Act (PDCA) cycle:

1. *Plan*:

Establish environmental objectives and processes necessary to deliver results in accordance

with the organization’s environmental policy.

2. *Do*:

Implement the processes as planned.

3. *Check*:

Monitor and measure processes against the environmental policy, objectives, and compliance
obligations, and report the results.

4. *Act*:

Take actions to continually improve.

Key Requirements
1. *Environmental Policy*:

Commitment to comply with applicable legal requirements and to continual improvement.

2. *Planning*:

Identification of environmental aspects and impacts, legal requirements, and objectives.

3. *Implementation and Operation*:

Defining roles, responsibilities, and competencies, ensuring communication and

documentation, and controlling operational procedures.

4. *Checking and Corrective Action*:

Monitoring and measuring environmental performance, evaluating compliance, and

addressing nonconformities.

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5. *Management Review*:

Periodic review by top management to ensure the EMS's suitability, adequacy, and
effectiveness.

Benefits of Implementing ISO 14001

1. *Improved Environmental Performance*:

Reducing environmental impact and improving efficiency in the use of resources.

2. *Regulatory Compliance*:

Ensuring compliance with current and future statutory and regulatory requirements.

3. *Reduced Costs*:

Through improved efficiency, waste reduction, and reduced energy consumption.

4. *Enhanced Reputation*:

Demonstrating to stakeholders a commitment to environmental management.

5. *Risk Management*:

Proactively managing environmental risks and opportunities.

ISO 14001 Certification Process

1. *Gap Analysis*:

Assessing current processes against ISO 14001 requirements.

2. *Planning*:

Developing an implementation plan to address gaps.

3. *Training*:

Educating employees on ISO 14001 requirements and their roles.

4. *Implementation*:

Applying the new processes and controls.

5. *Internal Audit*:

Conducting internal audits to ensure the system is working as intended.

6. *Certification Audit*:

An external audit by a certification body to verify compliance.

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7. *Continuous Improvement*:

Ongoing monitoring, review, and improvement of the EMS.

Related Standards in the ISO 14000 Family

- *ISO 14004*:

Provides guidelines for the establishment, implementation, maintenance, and improvement of

an EMS.

- *ISO 14006*:

Guidelines for incorporating eco-design.

- *ISO 14031*:

Guidelines for environmental performance evaluation.

- *ISO 14064*:

Standards for greenhouse gas accounting and verification.

Introduction to Statistical Process Control (SPC)

Overview

Statistical Process Control (SPC) is a methodological approach to quality control that

employs statistical methods to monitor and control a process.

It helps organizations to ensure that their processes operate at their maximum potential to
produce products that meet specifications with minimal waste. SPC is vital in maintaining
consistent quality and identifying areas for improvement.

Objectives of SPC

1. *Monitor Process Behavior*:

SPC helps in observing the process over time to detect unusual patterns and variations.

2. *Improve Quality*:

By identifying and controlling variability, SPC ensures that products meet quality standards
consistently.

3. *Reduce Waste*:

SPC aids in identifying the sources of defects and variations, thus reducing rework and scrap.

4. *Enhance Decision Making*:

Provides a data-driven basis for making informed decisions about process improvements.

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Key Concepts in SPC
1. *Variation*

- *Common Cause Variation*:

This type of variation is inherent to the process and is due to the system itself. It is consistent
and predictable over time.

- *Special Cause Variation*:

This variation arises from external sources that are not part of the system. It is unpredictable
and can indicate problems or changes in the process.

2. *Control Charts*

Control charts are the primary tools in SPC. They help in visualizing the process performance
over time and in distinguishing between common and special cause variations.

3. *Process Capability*

Process capability indices (Cp, Cpk) measure how well a process can produce output within
specification limits.

- *Cp*: Measures the potential capability of a process if it is centered between the

specification limits.

- *Cpk*: Measures the actual capability of the process considering it may not be centered.

4. *Process Stability*

A process is considered stable if it operates consistently over time, free from special cause
variation.

Stability is determined using control charts by analyzing the plotted points against control
limits.

Steps in Implementing SPC

1. *Select the Process*:

Identify the critical processes to be monitored using SPC.

2. *Determine Key Quality Characteristics*:

Select measurable characteristics that are critical to the process quality.

3. *Collect Data*:

Gather data on these key characteristics during the process operation.

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4. *Construct Control Charts*:

Use the collected data to construct appropriate control charts.

5. *Analyze Data*:

Examine control charts for patterns, trends, and any signs of special cause variation.

6. *Take Action*:

Investigate and address the causes of special variations to bring the process back into control.

7. *Review and Improve*:

Continuously review the process performance and make necessary improvements to enhance
quality.

Types of Control Charts and Their Applications

Variable Data Control Charts
*X-bar and R Charts*:

Used for monitoring the mean and range of variables when the sample size is small.

- *Example*: Monitoring the diameter of machined parts.

- *X-bar Chart*:

Monitors the process mean.

- *R Chart*:

Monitors the range of the process.

- *X-bar and S Charts*:

Used for monitoring the mean and standard deviation of variables when the sample size is
larger.

- *Example*: Monitoring the weight of packaged products

- *X-bar Chart*:

Monitors the process mean.

- *S Chart*:

Monitors the standard deviation.

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Attribute Data Control Charts
- *P Chart*:

Used for monitoring the proportion of defective units in a sample. Applicable when data is in
attribute form (e.g., pass/fail, yes/no).

- *Example*: Monitoring the percentage of defective products in a batch.

- *C Chart*:

Used for monitoring the count of defects per unit when the number of defects can be counted.

- *Example*: Monitoring the number of defects in a fabric roll.

Benefits of SPC
1. *Improved Quality*:
Achieved by consistently monitoring and controlling process variations.

2. *Reduced Costs*:
Through minimization of waste, rework, and scrap, leading to cost savings.

3. *Enhanced Productivity*:
By maintaining a stable process, efficiency and productivity are improved.

4. *Better Decision Making*:

Decisions are based on statistical data rather than intuition, leading to more accurate and
reliable outcomes.

5. *Customer Satisfaction*:
Consistently producing high-quality products increases customer trust and satisfaction.

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