There is no explicit definition of total quality management. Some people define it as pro- viding the customer with quality products at the right time and at the right place. Others de- fine it as meeting or exceeding customer requirements. Internally, TQM can be defined as less variability in the quality of the product and less waste.
Figure 20–34 shows the basic objectives and focus areas of a TQM process. Almost all companies have a primary strategy to obtain TQM, and the selected strategy is usually in place over the long term. The most common primary strategies are listed below. A sum- mary of the seven primary improvement strategies mapped onto 17 corporations is shown in Table 20–9.
Primary strategies:
● Solicit ideas for improvement from employees.
● Encourage and develop teams to identify and solve problems.
TABLE 20–8. THE SEVEN WASTES
1. Waste of overproduction.Eliminate by reducing setup times, synchronizing quantities and timing between processess, compacting layout, visibility, and so forth. Make only what is needed now.
2. Waste of waiting.Eliminate through synchronizing work flow as much as possible, and balance uneven loads by flexible workers and equipment.
3. Waste of transportation.Establish layouts and locations to make transport and handling unnecessary if possible. Then rationalize transport and material handling that cannot be eliminated.
4. Waste of processing itself.First question why this part or product should be made at all, then why each process is necessary. Extend thinking beyond economy of scale or speed.
5. Waste of stocks.Reduce by shortening setup times and reducing lead times, by synchronizing work flows and improving work skills, and even by smoothing fluctuations in demand for the product. Reducing all the other wastes reduces the waste of stocks.
6. Waste of motion.Study motion for economy and consistency. Economy improves productivity, and consistency improves quality. First improve the motions, then mechanize or automate. Otherwise there is danger of automating waste.
7. Waste of making defective products.Develop the production process to prevent defects from being made so as to eliminate inspection. At each process, accept no defects and make no defects. Make processes failsafe to do this. From a quality process comes a quality product—automatically.
Source:R. Hall,Attaining Manufacturing Excellence.(Homewood, IL: Dow-Jones-Irwin, 1987), p. 26.
11. This section has been adapted from C. Carl Pegels,Total Quality Management(Danvers, MA: Boyd &
Fraser, 1995), pp. 4–27.
● Encourage team development for performing operations and service activities re- sulting in participative leadership.
● Benchmark every major activity in the organization to ensure that it is done in the most efficient and effective way.
● Utilize process management techniques to improve customer service and reduce cycle time.
Total Quality Management (TQM) 807
CUSTOMER FOCUS (M)
BENCHMARKING (M)
REENGINEERING (M)
CYCLE TIME REDUCTION (M)
TIME-BASED COMPETITION (M)
JUST-IN-TIME OPERATIONS (M)
ADAPTABILITY (M)
CONCURRENT ENGINEERING (M)
FUNCTIONAL AREA INTEGRATION (M)
ACTIVITY-BASED COSTING (M)
SUPPLIER COOPERATION AND DEVELOPMENT (M)
PRODUCT INNOVATION (M)
BRAINSTORMING (T)
PARETO ANALYSIS (T)
CAUSE AND EFFECT DIAGRAMS (T)
STATISTICAL CONTROL CHARTING (T)
QUALITY FUNCTION DEPLOYMENT (T)
PROCESS QUALITY (T)
ISO 9000 (T)
GROUP DYNAMICS (E)
EMPLOYEE MOTIVATION (E)
TEAM PROBLEM SOLVING (E)
TEAMWORK (E)
EMPLOYEE EDUCATION AND TRAINING (E) NOTES: M = MANAGEMENT FOCUS
T = TOOL FOCUS E = EMPLOYEE FOCUS
QUALITY
PRODUCTIVITY
FLEXIBILITY
TIMELINESS
CUSTOMER RESPONSIVENESS
FIGURE 20–34. TQM objectives and focus areas. Source:C. Carl Pegels,Total Quality Management (Danvers, MA: Boyd & Fraser, 1995), p. 6.
TABLE 20–9. PRIMARY IMPROVEMENT STRATEGIES EMPLOYED BY LISTED CORPORATIONS Strategy
P1 P2 P3 P4 P5 P6 P7
Asea, Brown, Boveri X
AT&T X
Cigna X
DuPont X
Eastman Kodak X
Eaton Corp. X X X
Ford Motor Company X
General Motors X
Goodyear Tire X X
IBM Rochester X
ICL Plc X
Johnson Controls X
Motorola X
New England Corp. X
New York Life X X
Pratt and Whitney X
Xerox Corp. X
Source:C. Carl Pegels,Total Quality Management(Danvers, MA: Boyd & Fraser, 1995), p. 21.
TABLE 20–10. SECONDARY IMPROVEMENT STRATEGIES EMPLOYED BY LISTED CORPORATIONS Strategy
S1 S2 S3 S4 S5 S6 S7 S8 S9 S10
AMP Corp. X X X X
Asea, Brown, Boveri X X
British Telecom X X
Chrysler Corp. X X X
Coca-Cola X
Corning X
Eastman Kodak X
Eaton Corp. X
Fidelity Investment X X X
Ford Motor Company X
Fujitsu Systems X X X
General Motors X X X
Holiday Inns X
IBM Rochester X X X X
ICL Plc X
Johnson Controls X X X
Motorola X
New England Corp. X
New York Life X X
Pratt and Whitney X
Procter & Gamble X X
The Forum Corp. X X
VF Corp. X X
Xerox Corp. X
Source:C. Carl Pegels,Total Quality Management(Danvers, MA: Boyd & Fraser, 1995).
● Develop and train customer staff to be entrepreneurial and innovative in order to find ways to improve customer service.
● Implement improvements so that the organization can qualify as an ISO 9000 supplier.
There also exist secondary strategies that, over the long run, focus on operations and profitability. Typical secondary strategies are shown below, and Table 20–10 identifies the secondary improvement strategies by listed companies.
Secondary strategies:
● Maintain continuous contact with customers; understand and anticipate their needs.
● Develop loyal customers by not only pleasing them but by exceeding their expectations.
● Work closely with suppliers to improve their product/service quality and productivity.
● Utilize information and communication technology to improve customer service.
Total Quality Management (TQM) 809
TABLE 20–11. SUMMARY ILLUSTRATIONS OF QUANTIFIED IMPROVEMENTS ACHIEVED
AMP.On-time shipments improved from 65% to 95%, and AMP products have nationwide availability within three days or less on 50% of AMP sales.
Asea, Brown, Boveri.Every improvement goal customers asked for—better delivery, quality responsiveness, and so on—was met.
Chrysler.New vehicles are now being developed in 33 months versus as long as 60 months 10 years ago.
Eaton.Increased sales per employee from $65,000 in 1983 to about $100,000 in 1992.
Fidelity.Handles 200,000 information calls in 4 telephone centers; 1,200 representatives handle 75,000 calls, and the balance is automated.
Ford.Use of 7.25 man-hours of labor per vehicle versus 15 man-hours in 1980; Ford Taurus bumper uses 10 parts compared to 100 parts on similar GM cars.
General Motors.New vehicles are now being developed in 34 months versus 48 months in the 1980s.
IBM Rochester.Defect rates per million are 32 times lower than four years ago and on some products exceed six sigma (3.4 defects per million).
Pratt & Whitney.Defect rate per million was cut in half; a tooling process was shortened from two months to two days; part lead times were reduced by 43%.
VF Corp.Market response system enables 97% in-stock rate for retail stores compared to 70% industry average.
NCR.Checkout terminal was designed in 22 months versus 44 months and contained 85% fewer parts than its predecessor.
AT&T.Redesign of telephone switch computer completed in 18 months versus 36 months; manufacturing de- fects reduced by 87%.
Deere & Co.Reduced cycle time of some of its products by 60%, saving 30% of usual development costs.
Source:C. Carl Pegels,Total Quality Management(Danvers, MA: Boyd & Fraser, 1995), p. 27.
● Develop the organization into manageable and focused units in order to improve performance.
● Utilize concurrent or simultaneous engineering.
● Encourage, support, and develop employee training and education programs.
● Improve timeliness of all operation cycles (minimize all cycle times).
● Focus on quality, productivity, and profitability.
● Focus on quality, timeliness, and flexibility.
Information about quality improvements is difficult to obtain from corporations. Most firms consider this information confidential and do not like to publish for fear of provid- ing an advantage to their competitors. As a result, the information in Table 20–11 is sketchy. It is simply a snapshot of a limited number of quantitative performance improve- ments that were achieved by firms as part of their total quality management programs.
One noteworthy achievement is Ford’s reduction in man-hours to build a vehicle from 15 to 7.25. Although this took 10 years to achieve, it is still a sterling example of produc- tivity improvement. IBM Rochester, Minnesota’s reduction in defects per million by a fac- tor of 32 over a 4-year period is also noteworthy. And the ability of Chrysler and General Motors to reduce their design development times for new vehicles from 60 and 48 months to the current 33 and 34 months, respectively, is an achievement that indicates the return of competitiveness to the U.S. automobile industry.
Contracts and Procurement
811 Related Workbook Exercises and
Related Case Studies Case Studies (from Kerzner/Project PMBOK®Reference (from Kerzner/Project Management Workbook to Accompany Section for the PMP® Management Case Studies) Project Management,8th Edition) Certification Exam
None • Multiple Choice Exam • Procurement
• Crossword Puzzle on • Management
• Procurement Management