| unit 3 basics of productivity tqm

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Unit 3Basics Of Productivity &TQM Q1WHAT IS PRODUCTION? A1) Production is a process of several activities which creates a product or set of products or services.

Production is meant for people to make use of.

Production of a product or production of services facilitates in terms comfort, saving of time, energy, space, manpower, money etc.

Easy and ample availability of Products is the result of production

Productivity is a measure of ratio of production to cost of production.

Productivity is production of an industry as a result of the production process and economical use of financial investment, Manpower, Technology, Land, Machinery and Equipments.

Productivity is an attitude and a mental activity.

The efforts of continuous improvement at reduced cost can result into improved productivity.

Productivity is integral part of our lives.

Productivity is not limited only to industries

Productivity refers to the physical relationship between the quantity produced (output) and the quantity of resources used in the course of production (input). “It is the ratio between the output of goods and services and the input of resources consumed in the process of production.”

Output implies total production while input means land, labour, capital, management, etc. Productivity measures the efficiency of the production system. The efficiency with which resources are utilized is called productive efficiency. Higher productivity means producing more from a given amount of inputs or producing a given amount with lesser inputs. At the level of a plant or an industry productivity is an output-input ratio. But at the macro level, productivity is a measure of performance of an economy or country. From a nation’s viewpoint productivity is the ratio of available goods and services to the potential resources of the country. Productivity means an economic measure of output per unit of input. Output refers to the total production in terms of units or in terms of revenues while input refers to all the factors of production used like capital, labour, equipment, etc. Productivity is a good indicator of the efficiency with which a factory is operating. If a firm has higher productivity, i.e. it produces more with a given amount of inputs, it means it is utilising the resources properly. Similarly, a lower productivity indicates wastage of resources and time. It is vital to have a high productivity rate because resources like capital and time are scarce and should be exploited in the best possible way. Productivity can be calculated as the ratio of the volume of output to the volume of inputs. Productivity = Output/Input Productivity can be increased by:i. Generating more outputs from same level of inputs.ii. Producing same level of outputs with reduced level of inputs.iii. A combination of both. For the long term growth of the firm and the economy as a whole, it is impertinent that a high level of productivity is maintained. A high productivity means that the resources are utilised to the optimum, while minimizing wastage. This leads to reduction in cost of production, and subsequently availability of quality products to customers at lower price. Profitability of the firm is also related to its productivity. More profits mean that more retained earnings which would ultimately increase shareholders’ wealth. Q2) What is the concept of productivity and how can it be measured?A2) The concept of productivity can be applicable to any economy, small, medium and large business, government and individuals. Productivity aims at the maximum utilization of resources for yielding as many goods and services as possible, desired by consumers at lowest possible cost. Productivity is the ratio of output in a period of time to the input in the same period time. Productivity can measured with the help of following formula:

In simple terms Productivity is the ratio of output to some or all of the resources used to produce the output. Productivity can thus be measured as:

“Productivity is the quantitative relation between; what a firm produces and what a firm uses as a resource to produce output, i.e. arithmetic ratio of amount produced (output) to the amount of resources (input)”. Productivity is a measure of the efficiency of production. The measure of productivity is defined as a total output per one unit of a total input. Productivity measurements must show a linkage with profitability; after all, it is the bottom line that is the ultimate barometer of a company’s success. Inputs in any production process comprises capital, labor, material and energy.Productivity of each resource can be measured separately. Such measurement gives single factor productivity. The method of calculating productivity considering more than one resource is called multi-factor productivity approach to measuring productivity. Total productivity (total productivity index) refers to the productivity of all resources put together. So productivity of all resources put together gives total productivity. There are broadly three types of productivity measurements and these are explained below:1. Single-Factor Productivity Measurement.2. Multi-Factor Productivity Measurement.3. Total (Composite) Factor Productivity Measures.4. Total Productivity Model. 1. Single-Factor Productivity Measurement:Single-Factor Productivity is a measure of output against specific input. Partial productivity is concerned with efficiency of one class of input. Its significance lies in its focus on utilization of one resource. Labor productivity is a single factor productivity measure. It is the ratio of output to labor input (units of output per labor hour). Material productivity is the ratio of output to materials input. Machine productivity is the ratio of machine units of output per machine hour, output per unit machine. Capital productivity is the ratio of output to capital input and it is measured in Rupees. Energy Productivity is units of output per kilowatt-hour (Rupee value of output per kilowatt-hour).

Advantages of Single-Factor Productivity:i. Ease in obtaining relevant data and easy to comprehend.ii. Acts as a good diagnostic measure to identify areas of improvement by evaluating inputs separately across the output.iii. Ease in comparing with other businesses in the industry. Disadvantages of Single-Factor Productivity:i. Does not reflect the overall performance of the business.ii. Misinterpreted as technical change or efficiency/effectiveness of labor.iii. Management may identify wrong areas of improvements if the focus areas of a business are not examined accurately. 2. Multi-Factor Productivity Measurement:The concept of multi-factor productivity was developed by Scott D. Sink, multi-factor productivity measurement model considered labour, material and energy as major inputs. Capital was deliberately left out as it is most difficult to estimate how much capital is being consumed per unit/ time.The concept of depreciation used by accountants make it further difficult to estimate actual capital being consumed. Multi-factor productivity is ratio of output to a group of inputs such as; labor, energy and material. Multi-factor productivity is an index of output obtained from more than one of the resources (inputs) used in production. It is the ratio of net output to the sum of associated labor and other factor inputs.

Advantages of Multi-Factor Productivity:i. Considers intermediate inputs of a business.ii. Measures technical change in an industry. Disadvantages of Multi-Factor Productivityiii. Difficulty in obtaining all the inputs.iv. Difficulty in communicating inter-industry linkages and aggregation. 3. Total (Composite) Factor Productivity Measures:The Total Factor Productivity model developed by John W. Kendrick in 1951, he has taken only labour and capital as only two input factors. In an effort to improve productivity of labour, company may install more machinery and then productivity of labour will go up bringing down the capital productivity. Therefore, labour and capital are considered to be the most significant in contribution in the process of production.

Advantages of Total Factor Productivity:i. Ease in obtaining data and to understand.ii. Ease in understanding.iii. Ease of aggregation across industries. Disadvantages of Total Factor Productivity:i. Not a good measure for technological change.ii. Other inputs are ignored.iii. Net output does not reflect the efficiency of production system in a proper way.

4. Total Productivity Model:Total Productivity Model was developed by David J. Sumanth in 1979 considered five items as inputs. These are human, material, capital, energy and other expenses. This model can be applied in any manufacturing or service organization.

Total Tangible Output = Value of finished units produced + Partial units produced + Dividends from securities + Interests from bonds + other incomes.Total Tangible Inputs = Value of human inputs + Capital inputs + Materials purchased + Energy inputs + other expenses (taxes, transport & office expenses etc.).

Advantages of Total Productivity:i. All quantifiable inputs are considered.ii. Sensitivity analysis can be done.iii. Provides both firm level and operational unit level productivity.

Disadvantages of Total Productivity:i. Data is difficult to compute.ii. Does not consider intangible factors of input and output. Q3) What is the Importance of Quality Management?

A3) 1) Consistent quality and make of the productsIt is highly imperative for the firms to plan, design, execute, and manufacture the product offerings for the target market realizing the Importance of Quality Management and maintaining the parameters of total quality management at every facet. It helps to maintain the realms of quality on a consistent and continuous basis. Plus the firm is able to conduct market research and study on a regular basis having a drive to offering the products that stand as a testimony to the quality and its principles. 2) Ensures long lasting efficiencyWhen we come to talk about the factor of efficiency whilst discussing the Importance of Quality Management, it is not only confined to the working efficiency of the staff that is into the manufacturing of the products but also to the each and every employee of the firm and even the types of machinery. When all the employees of the firm right from the engineers to the sales managers understand and follow the Importance of Quality Management, it improves their efficiency as they know that the product that they are manufacturing and selling is best in class.The confidence and agility that is gained understanding the overall process, elevate their efficiency in manifolds. And all of it has a cascading effect on the overall sales and profits of the firm. 3) Higher productivity levelsWhen the firm realizes and follows the Importance of Quality Management in each of its business operations, there is a rise in the productivity of the employeesThey know and understand that they working on something that is unique and high on quality plus due to the high parameters of quality, obstacles and bottlenecks are ironed out automatically, thus, increasing their productivity levels.

4) Attracts a loyal set of customersIt is the thumb rule of every business and industry domain that the business can successfully survive and thrive in the ever competitive market only if it is able to retain the long list of loyal customers.

Customer nowadays is presented with lot many options and alternatives on a silver platter and is much more aware of the quality standards with the help of social media and digital marketing. Hence, it is very crucial for the firms to follow the Importance of Quality Management in order to attract and retain the loyal set of customers and set their cash registers ringing.

5) Beat the competition in the marketFor successfully survive and thrive in the market that is all-time high on the competition for the new as well existing brands, it is vital for the firms to understand the Importance of Quality Management and make it as an integral part of its objectives and work culture. There are many brands in the market that have to shut their stores and business operations in a short period of time as they are unable to adhere to the standards of quality. As mentioned above, the customer nowadays is much more aware and agile plus there are lot many other brands in the market waiting for you to leave the market. Hence, TQM is one of the sure shot ways and means to beat the competition and carve a distinctive identity for your brand in the market. 6) Enhanced brand valueIn continuation of the above-mentioned point, every brand needs a higher market share and an enhanced brand value. And it is the aspect of following and astutely understanding the Importance of Quality Management that helps the firm make its brand value and equity soar amongst other prominent players of the market.

7) Customer Satisfaction:Customer Satisfaction and following the Importance of Quality Management go hand in hand. Realizing its importance at each and every level of your business operation ensures the higher level of customer satisfaction and happiness.

Majority of customers today wish to go for the products that are high on quality and they don’t mind paying an extra amount of money for the same. And if there is any sort of glitch in the quality of the products, the customer realizes the same at the very same moment and perceives the brand in a negative light. With the power of social media and various industry-specific forums on the digital space, it takes no time for any customer to spread it and make it viral that deteriorates the brand value of the firm.

8) Reduced risksYet another aspect that helps the firm to enhance and maintain its brand value in the market is the reduced amount of risks. And risks only occur in the business operations when the firm does not adhere to the parameters of quality. Risk mainly occur during the manufacturing process of the products and whilst dealing with the customers during the before and after sales procedures. Hence, it is of the vital significance for the firms to understand the Importance of Quality Management especially in these two aspects of the business.

9) Less human errorsWhen the firm follows the Importance of Quality Management, it also follows a set of guidelines and principles that have been framed for each of the business operations. And right from the top management to the management trainees of the firm, all of them have to follow the same. This result in the less amount of human errors enhancing the productivity and work efficiency levels. Plus with less human errors there is a very low chance of risks.

10) Increased revenues and profitsIn today’s dynamic market that is ever high on competition, it is very difficult for the firm to generate the desired revenues and profits meeting their long term and short term objectives. And following the Importance of Quality Management is one of the assured ways to accomplish all the business aims and objectives. It ensures a high level of customer satisfaction, high brand value, higher market share, loyal customers, and a competitive edge. But many a time, firm fail to understand this simple and one of the most crucial fundamentals making them incur losses. Q4) What are the factors that affect qualityA4) Fundamental Factors Affecting Quality Market: Because of technology advancement, we could see many new products to satisfy customer wants. Money: The increased global competition necessitates huge outlays for new equipment's and process. Management: Because of the increased complex structure of business organization, the quality related responsibilities lie with persons at different levels in the organization. Men: The rapid growth in technical knowledge leads to development of human resource with different specialization. Motivation: If we fix the responsibility of achieving quality with each individual in the organization with proper motivation techniques, there will not be any problem in producing the designed quality products. Materials: Selection of proper materials to meet the desired tolerance limit is also an important consideration. Machines and mechanization: In order to have quality products which will lead to higher productivity of any organization, we need to use advanced machines and mechanize various operations. Modern information methods: The modern information methods help in storing and retrieving needed data for manufacturing, marketing and servicing. Mounting product requirements: Product diversification to meet customers taste leads to intricacy in design, manufacturing and quality standards. Hence, companies should plan adequate system to tackle all these requirements. Q5) What is the concept of TQM and its importance?A5) Total Quality Management (TQM) is a management framework based on the belief that an organization can build long-term success by having all its members, from low-level workers to its highest ranking executives, focus on improving quality and, thus, delivering customer satisfaction.

TQM requires organizations to focus on continuous improvement, or kaizen. It focuses on process improvements over the long term, rather than simply emphasizing short-term financial gains. Principles of TQMTQM prescribes a series of ways for organizations to accomplish this, with the pathway to successful continuous improvement centered on the use of strategy, data and effective communication to instill a discipline of quality into the organization's culture and processes. More specifically, TQM puts a spotlight on the processes that organizations use to produce their products, and it calls for organizations to define those processes, continuously monitor and measure their performance, and use that performance data to drive improvements. Furthermore, it calls for all employees, as well as all organizational departments, to be part of this process. TQM's objectives are to eliminate waste and increase efficiencies by ensuring that the production process of the organization's product (or service) is done right the first time. This management framework was initially applied to companies in the manufacturing sector, but, over the decades, organizations in other sectors have adopted it, as well. Importance of TQMTQM can have an important and beneficial effect on employee and organizational development. By having all employees focus on quality management and continuous improvement, companies can establish and uphold cultural values that create long-term success to both customers and the organization itself. TQM’s focus on quality helps identify skills deficiencies in employees, along with the necessary training, education or mentoring to address those deficiencies. With a focus on teamwork, TQM leads to the creation of cross-functional teams and knowledge sharing. The increased communication and coordination across disparate groups deepens institutional knowledge and gives companies more flexibility in deploying personnel. Benefits of TQMThe benefits of TQM include: Less product defects. One of the principles of TQM is that creation of products and services is done right the first time. This means that products ship with fewer defects, which reduce product recalls, future customer support overhead and product fixes. Satisfied customers. High-quality products that meet customers’ needs results in higher customer satisfaction. High customer satisfaction, in turn, can lead to increased market share, revenue growth via upsell and word-of-mouth marketing initiated by customers. Lower costs. As a result of less product defects, companies save cost in customer support, product replacements, field service and the creation of product fixes. The cost savings flow to the bottom line, creating higher profit margins. Well-defined cultural values. Organizations that practice TQM develop and nurture core values around quality management and continuous improvement. The TQM mindset pervades across all aspects of an organization, from hiring to internal processes to product development. Examples of TQMAutomobile manufacturer Toyota is one example of TQM. The adoption of TQM and kaizen at Toyota led to higher product and work quality at all levels of the organization. Toyota adopted a related practice called statistical quality control (SQC) in 1949. In 1951, Toyota launched the Creative Idea Suggestion System, which was based on a suggestion system used at Ford. In 1965, Toyota was awarded the Deming Application Prize for major advances in quality improvement. In 1994, the "Toyota Group Executive TQM Training Course" was established, providing TQM training for new executives. Toyota's TQM initiatives continue to the current day. In 2011, Toyota announced that more than 40 million suggestions (to date) were generated by the Creative Idea Suggestion System. Another example of TQM is Tata Steel, a steel-making company based in India and a subsidiary of the Tata Group. Tata Steel adopted TQM in the 1980s. The company was awarded the Deming Application Prize in 2008. Tata Steel used TQM methodologies to gain a deep understanding of customers. They sought to ensure value creation in a system that covered customers and suppliers. In 2008, Tata Steel created the Performance Improvement Committee (PIC) to drive continuous performance improvement. Performance Improvement (PI) Groups were established for iron making, steel making, flat rolling, long rolling, maintenance and more. As part of their 2008-2009 annual report, Tata Steel reported that their TQM initiatives resulted in a $150MM bottom line impact on their business. Q6) What is the cost of quality? A6) Cost of quality (COQ) is defined as a methodology that allows an organization to determine the extent to which its resources are used for activities that prevent poor quality, that appraise the quality of the organization’s products or services, and that result from internal and external failures. Having such information allows an organization to determine the potential savings to be gained by implementing process improvements.

Cost of poor quality (COPQ)

Appraisal costs

Internal failure costs

External failure costs

Prevention costs

COQ and organizational objectives

COQ resources

COST OF POOR QUALITY (COPQ)?Cost of poor quality (COPQ) is defined as the costs associated with providing poor quality products or services. There are three categories:

Appraisal costs are costs incurred to determine the degree of conformance to quality requirements.

Internal failure costs are costs associated with defects found before the customer receives the product or service.

External failure costs are costs associated with defects found after the customer receives the product or service.

Quality-related activities that incur costs may be divided into prevention costs, appraisal costs, and internal and external failure costs.

Appraisal costsAppraisal costs are associated with measuring and monitoring activities related to quality. These costs are associated with the suppliers’ and customers’ evaluation of purchased materials, processes, products, and services to ensure that they conform to specifications. They could include:Verification: Checking of incoming material, process setup, and products against agreed specificationsQuality audits: Confirmation that the quality system is functioning correctlySupplier rating: Assessment and approval of suppliers of products and services

Internal failure costsInternal failure costs are incurred to remedy defects discovered before the product or service is delivered to the customer. These costs occur when the results of work fail to reach design quality standards and are detected before they are transferred to the customer. They could include:Waste: Performance of unnecessary work or holding of stock as a result of errors, poor organization, or communicationScrap: Defective product or material that cannot be repaired, used, or soldRework or rectification: Correction of defective material or errorsFailure analysis: Activity required to establish the causes of internal product or service failure

External failure costsExternal failure costs are incurred to remedy defects discovered by customers. These costs occur when products or services that fail to reach design quality standards are not detected until after transfer to the customer. They could include: Repairs and servicing: Of both returned products and those in the fieldWarranty claims: Failed products that are replaced or services that are re-performed under a guaranteeComplaints: All work and costs associated with handling and servicing customers’ complaintsReturns: Handling and investigation of rejected or recalled products, including transport costs

PREVENTION COSTSPrevention costs are incurred to prevent or avoid quality problems. These costs are associated with the design, implementation, and maintenance of the quality management system. They are planned and incurred before actual operation, and they could include:Product or service requirements: Establishment of specifications for incoming materials, processes, finished products, and servicesQuality planning: Creation of plans for quality, reliability, operations, production, and inspectionQuality assurance: Creation and maintenance of the quality systemTraining: Development, preparation, and maintenance of programs

COST OF QUALITY AND ORGANIZATIONAL OBJECTIVES The costs of doing a quality job, conducting quality improvements, and achieving goals must be carefully managed so that the long-term effect of quality on the organization is a desirable one.These costs must be a true measure of the quality effort, and they are best determined from an analysis of the costs of quality. Such an analysis provides a method of assessing the effectiveness of the management of quality and a means of determining problem areas, opportunities, savings, and action priorities. Cost of quality is also an important communication tool. Philip Crosby demonstrated what a powerful tool it could be to raise awareness of the importance of quality. He referred to the measure as the "price of nonconformance" and argued that organizations choose to pay for poor quality. Many organizations will have true quality-related costs as high as 15-20% of sales revenue, some going as high as 40% of total operations. A general rule of thumb is that costs of poor quality in a thriving company will be about 10-15% of operations. Effective quality improvement programs can reduce this substantially, thus making a direct contribution to profits.The quality cost system, once established, should become dynamic and have a positive impact on the achievement of the organization’s mission, goals, and objectives.

Cost of Quality Example

COST OF QUALITY RESOURCESYou can also search articles, case studies, and publications for cost of quality resources. Using Cost of Quality to Improve Business Results (PDF) Since centering improvement efforts on cost of quality, CRC Industries has reduced failure dollars as a percentage of sales and saved hundreds of thousands of dollars. Cost of Quality: Why More Organizations Do Not Use It Effectively (World Conference on Quality and Improvement) Quality managers in organizations that do not track cost of quality cite as reasons a lack of management support for quality control, time and cost of COQ tracking, lack of knowledge of how to track data, and lack of basic cost data. The Tip of the Iceberg (Quality Progress) A Six Sigma initiative focused on reducing the costs of poor quality enables management to reap increased customer satisfaction and bottom-line results. Cost of Quality (COQ): Which Collection System Should Be Used? (World Conference on Quality and Improvement) This article identifies the various COQ systems available and the benefits and disadvantages of using each system. Q7) Describe the various Philosophies and Approaches To Quality.A7) Edward Deming,Deming’s 14 Points on Quality Management, or the Deming Model of Quality Management, a core concept on implementing total quality management (TQM), is a set of management practices to help companies increase their quality and productivity.

W. EDWARDS DEMING’S 14 POINTS

Create constancy of purpose for improving products and services.

Adopt the new philosophy.

Cease dependence on inspection to achieve quality.

End the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier.

Improve constantly and forever every process for planning, production and service.

Institute training on the job.

Adopt and institute leadership.

Drive out fear.

Break down barriers between staff areas.

Eliminate slogans, exhortations and targets for the workforce.

Eliminate numerical quotas for the workforce and numerical goals for management.

Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system.

Institute a vigorous program of education and self-improvement for everyone.

Put everybody in the company to work accomplishing the transformation.

These total quality management principles can be put into place by any organization to more effectively implement total quality management. As a total quality management philosophy, Dr. Deming’s work is foundational to TQM and its successor, quality management systems. J. JuranThe Juran Trilogy, also called Quality Trilogy, was presented by Dr. Joseph M. Juran in 1986 as a means to manage for quality. The traditional approach to quality at that time was based on quality control, but today, the Trilogy has become the basis for most quality management best practices around the world. In essence, the Juran Trilogy is a universal way of thinking about quality—it fits all functions, all levels, and all product and service lines. The underlying concept is that managing for quality consists of three universal processes:

Quality Planning (Quality by Design)

Quality Control (Process Control & Regulatory)

Quality Improvement (Lean Six Sigma)

The Juran Trilogy diagram is often presented as a graph, with time on the horizontal axis and cost of poor quality on the vertical axis.

The initial activity is quality planning, or as we refer to it today, ‘quality by design’ – the creation of something new. This could be a new product, service, process, etc. As operations proceed, it soon becomes evident that delivery of our products is not 100 percent defect free. Why? Because there are hidden failures or periodic failures (variation) that require rework and redoing. In the diagram, more than 20 percent of the work must be redone due to failures. This waste is considered chronic—it goes on and on until the organization decides to find its root causes and remove it. We call it the Cost of Poor Quality. The design and development process could not account for all unforeseen obstacles in the design process. Under conventional responsibility patterns, the operating forces are unable to get rid of the defects or waste. What they can do is to carry out control—to prevent things from getting worse, as shown. The figure shows a sudden sporadic spike that has raised the failure level to more than 40 percent. This spike resulted from some unplanned event such as a power failure, process breakdown, or human error. As a part of the control process, the operating forces converge on the scene and take action to restore the status quo. This is often called corrective action, troubleshooting, firefighting, and so on. The end result is to restore the error level back to the planned chronic level of about 20 percent. The chart also shows that in due course the chronic waste was driven down to a level far below the original level. This gain came from the third process in Juran’s Trilogy—improvement. In effect, it was seen that the chronic waste was an opportunity for improvement, and steps were taken to make that improvement. Quality Planning (Quality by Design)The design process enables innovation to happen by designing products (goods, services, or information) together with the processes—including controls—to produce the final outputs. Today many call this Quality By Design or Design for Six Sigma (DFSS) The Juran Quality by Design model is a structured method used to create innovative design features that respond to customers’ needs and the process features to be used to make those new designs. Quality by Design refers to the product or service development processes in organizations. Quality Improvement (Lean Six Sigma)Improvement happens every day, in every organization—even among the poor performers. That is how businesses survive—in the short term. Improvement is an activity in which every organization carries out tasks to make incremental improvements, day after day. Daily improvement is different from breakthrough improvement. Breakthrough requires special methods and leadership support to attain significant changes and results. It also differs from planning and control as it requires taking a “step back” to discover what may be preventing the current level of performance from meeting the needs of its customers. By focusing on attaining breakthrough improvement, leaders can create a system to increase the rate of improvement. By attaining just a few vital breakthroughs year after year (The Pareto Principle), the organization can outperform its competitors and meet stakeholder needs. As used here, “breakthrough” means “the organized creation of beneficial change and the attainment of unprecedented levels of performance.” Synonyms are “quality improvement” or “Six Sigma improvement.” Unprecedented change may require attaining a Six Sigma level (3.4 ppm) or 10-fold levels of improvement over current levels of process performance. Breakthrough results in significant cost reduction, customer satisfaction enhancement and superior results that will satisfy stakeholders. Quality Control (Process Control & Regulatory)Compliance or quality control is the third universal process in the Juran Trilogy.The term “control of quality” emerged early in the twentieth century. The concept was to broaden the approach to achieving quality, from the then-prevailing after-the-fact inspection (detection control) to what we now call “prevention (proactive control).” For a few decades, the word “control” had a broad meaning, which included the concept of quality planning. Then came events that narrowed the meaning of “quality control.” The “statistical quality control” movement gave the impression that quality control consisted of using statistical methods. The “reliability” movement claimed that quality control applied only to quality at the time of test but not during service life. Today, the term “quality control” often means quality control and compliance. The goal is to comply with international standards or regulatory authorities such as ISO 9000. The Juran Trilogy has evolved over time in some industries. This evolution has not altered the intent of the trilogy. It only changes the names. For instance, traditional goods producers call it QC, QI and QP while another may say QA/QC, CI and DFSS. The Trilogy continues to be the means to present total quality management to all employees looking to find a way to keep it simple KaizenKaizen is a Lean manufacturing tool that improves quality, productivity, safety, and workplace culture. Kaizen focuses on applying small, daily changes that result in major improvements over time. Kaizen first surfaced during the effort to rebuild Japan after World War II. At the time, several U.S. business consultants collaborated with Japanese companies to improve manufacturing. The collaboration resulted in the development of several new management techniques, one of which was Kaizen.

Kaizen (改善) comes from two Japanese words: Kai (improvement) and Zen (good), which translates to “continuous improvement”. In business, Kaizen refers to activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. Kaizen’s strength comes from having all workers participate and make suggestions to improve the business. The purpose of Kaizen goes beyond simple productivity improvement. When done correctly, the process humanizes the workplace, eliminates overly hard work, and teaches people how to spot and eliminate waste in business processes.

The Kaizen philosophy states that our way of life - be it our working life, our social life, our home life - deserves to be constantly improved. Kaizen is about achieving improvements by taking small steps instead of drastic, rigorous changes. Although improvements under Kaizen are small and incremental, the process brings about dramatic results over time. Additionally, Kaizen is a low-risk and an inexpensive approach. It involves process improvements that do not require a large capital investment. As a result, Kaizen encourages workers to experiment and try out new ideas. If an idea does not work, they can always revert the changes without incurring large costs. Benefits of KaizenBeyond the obvious benefit of improving processes; Kaizen engenders teamwork and ownership. Teams take responsibility for their work and are able to make improvements to enhance their own working experience. Most people want to be successful and proud of the work that they do and Kaizen helps them to achieve this while benefitting the organization.

A Gallup poll of US workers in 2015 showed that just 32% of employees were engaged. A majority of employees (50.8%) were “not engaged”, while 17.2% were “actively disengaged”. One of the main benefits of Kaizen is getting employees actively involved and engaged with the company. Having more engaged workers leads to more efficient processes, lower turnover, and higher rates of innovation. Engaged employees feel that they have an impact on the company’s performance and are more likely to try out new ideas. Additionally, organizations with more engaged employees can achieve higher competitiveness, enhance customer satisfaction, and have an improvement culture of solving problems through teamwork. The Kaizen ProcessThe continuous cycle of Kaizen activity has six phases:

Identify a problem or opportunity

Analyze the process

Develop an optimal solution

Implement the solution

Study the results and adjust

Standardize the solution

Continuous Improvement CycleKaizen starts with a problem, more precisely the recognition that a problem exists and that there are opportunities for improvement. Once problems are identified, the organization needs to enlist the cross-functional personnel to understand the underlying cause of it. The proposed solution are then tested on a small-scale. Using data, the team makes adjustments to the solution. And finally, the results are spread across the organization and the solution is standardized. Getting Started With KaizenAs a Lean business practice, Kaizen succeeds when all employees look for areas to improve and provide suggestions based on their observations and experience. To facilitate this, management’s role is to communicate the need to change, demonstrate a personal commitment to process improvement, educate and train staff in Kaizen, and manage the improvement process. When first getting started with Kaizen, here are some things to keep in mind: Start with training: Everybody needs to know what Kaizen is and how it can benefit the workplace culture. Support Kaizen from the top: Employees need to know that they will get support when they need it. Get ideas flowing: Use Kaizen boards, quality circles, and suggestion boxes. Employees need a way to communicate effectively and document their ideas for improvement. Keep ideas coming: Let employees implement their own suggestions when possible. This will encourage participation. Remove barriers: Kaizen boards and software are especially useful here. They allow workers to post ideas, track their progress, and see the benefits of each improvement. Measure impacts: By keeping track of the beneficial results from the kaizen process, the company is more likely to continue investing in it and sustaining it.Kaizen is a long-term strategy and the goal is to develop the capabilities and confidence of workers. As a strategy, Kaizen works when employees at all levels of the company work together proactively to achieve regular, incremental improvements. In a sense, it combines the collective talents within a company to create a powerful engine for improvement.

By having the right system in place, management can help their Kaizen program gain momentum and succeed. Workers will gain a sense of ownership over their tasks and become more involved in every aspect of the business. This will ultimately lead to better processes, higher customer satisfaction, and a more profitable business. P. Crosby’s philosophy.Philip Crosby (1926-2001) was an influential author, consultant and philosopher who developed practical concepts to define and communicate quality and quality improvement practices. His influence was extensive and global. He wrote the best-seller Quality is free in 1979, at a time when the quality movement was a rising, innovative force in business and manufacturing. In the 1980s his consultancy company was advising 40% of the Fortune 500 companies on quality management. Key theoriesQuality, Crosby emphasised, is neither intangible nor immeasurable. It is a strategic imperative that can be quantified and put back to work to improve the bottom line.

Acceptable quality or defect levels and traditional quality control measures represent evidence of failure rather than assurance of success. The emphasis, for Crosby, is on prevention, not inspection and cure. The goal is to meet requirements on time, first time and every time. He believes that the prime responsibility for poor quality lies with management, and that management sets the tone for the quality initiative from the top. Crosby's approach to quality is unambiguous. In his view, good, bad, high and low quality are meaningless concepts, and the meaning of quality is conformance to requirements. Non-conforming products are ones that management has failed to specify or control. The cost of non-conformance equals the cost of not doing it right first time, and not rooting out any defects in processes. Zero defects does not mean that people never make mistakes, but that companies should not begin with allowances or sub-standard targets with mistakes as an in-built expectation. Instead, work should be seen as a series of activities or processes, defined by clear requirements, carried out to produce identified outcomes. Systems that allow things to go wrong - so that those things have to be done again - can cost organizations between 20% and 35% of their revenues, in Crosby's estimation. His seminal approach to quality was laid out in Quality is free and is often summarized as the 14 steps: The 14 stepsManagement commitment: The need for quality improvement must be recognized and adopted by management, with an emphasis on the need for defect prevention. Quality improvement is equated with profit improvement. A quality policy is needed which states that '… each individual is expected to perform exactly like the requirement or cause the requirement to be officially changed to what we and the customer really need.' Quality improvement team: Representatives from each department or function should be brought together to form a quality improvement team. These should be people who have sufficient authority to commit the area they represent to action. Quality measurement: The status of quality should be determined throughout the company. This means establishing quality measures for each area of activity that are recorded to show where improvement is possible, and where corrective action is necessary. Crosby advocates delegation of this task to the people who actually do the job, so setting the stage for defect prevention on the job, where it really counts. Cost of quality evaluation: The cost of quality is not an absolute performance measurement, but an indication of where the action necessary to correct a defect will result in greater profitability. Quality awareness: This involves, through training and the provision of visible evidence of the concern for quality improvement, making employees aware of the cost to the company of defects. Crosby stresses that this sharing process is a - or even the - key step in his view of quality. Corrective action: Discussion about problems will bring solutions to light and also raise other elements for improvement. People need to see that problems are being resolved on a regular basis. Corrective action should then become a habit. Establish an ad-hoc committee for the Zero Defects Programme: Zero Defects is not a motivation programme - its purpose is to communicate and instil the notion that everyone should do things right first time. Supervisor training: All managers should undergo formal training on the 14 steps before they are implemented. A manager should understand each of the 14 steps well enough to be able to explain them to his or her people, Zero Defects Day: It is important that the commitment to Zero Defects as the performance standard of the company makes an impact, and that everyone gets the same message in the same way. Zero Defects Day, when supervisors explain the programme to their people, should make a lasting impression as a 'new attitude' day. Goal setting: Each supervisor gets his or her people to establish specific, measurable goals to strive for. Usually, these comprise 30-, 60-, and 90-day goals. Error cause removal: Employees are asked to describe, on a simple, one-page form, any problems that prevent them from carrying out error-free work. Problems should be acknowledged within twenty-four hours by the function or unit to which the problem is addressed. This constitutes a key step in building up trust, as people will begin to grow more confident that their problems will be addressed and dealt with. Recognition: It is important to recognize those who meet their goals or perform outstanding acts with a prize or award, although this should not be in financial form. The act of recognition is what is important. Quality Councils: The quality professionals and team-leaders should meet regularly to discuss improvements and upgrades to the quality programme. Do it over again: During the course of a typical programme, lasting from 12 to18 months, turnover and change will dissipate much of the educational process.It is important to set up a new team of representatives and begin the programme over again, starting with Zero Defects day. This 'starting over again' helps quality to become ingrained in the organisation. Q8) What are Product & Service Quality Dimensions?A8) When it comes to measuring the quality of your services, it helps to understand the concepts of product and service dimensions. Users may want a key board that is durable and flexible for using on the wireless carts. Customers may want a service desk assistant who is empathetic and resourceful when reporting issues. Quality is multidimensional. Product and service quality are comprised of a number of dimensions which determine how customer requirements are achieved. Therefore it is essential that you consider all the dimension that may be important to your customers. Product quality has two dimensions.Physical dimension - A product's physical dimension measures the tangible product itself and includes such things as length, weight, and temperature.Performance dimension - A product's performance dimension measures how well a product works and includes such things as speed and capacity. While performance dimensions are more difficult to measure and obtain when compared to physical dimensions, but the efforts will provide more insight into how the product satisfies the customer. Like product quality, service quality has several dimensions.Responsiveness - Responsiveness refers to the reaction time of the service.Assurance - Assurance refers to the level of certainty a customer has regarding the quality of the service provided.Tangibles - Tangibles refers to a service's look or feel.Empathy - Empathy is when a service employee shows that she understands and sympathizes with the customer's situation. The greater the level of this understanding, the better. Some situations require more empathy than others.Reliability - Reliability refers to the dependability of the service providers and their ability to keep their promises. The quality of products and services can be measured by their dimensions. Evaluating all dimensions of a product or service helps to determine how well the service stacks up against meeting the customer requirements. Q9) What is SERVQUAL ?A9) About the SERVQUAL (or RATER) Model(Note: This model is also referred to as the RATER model, which stands for the five service factors it measures, namely: reliability, assurance, tangibles, empathy and responsiveness.) As is indicated by the name of this model, SERVQUAL is a measure of service quality. Essentially it is a form of structured market research that splits overall service into five areas or components. The SERVQUAL model features in many services marketing textbooks, usually when discussing customer satisfaction and service quality. It was developed in the mid 1980’s by well-known academic researchers in the field of services marketing, namely Zeithaml, Parasuraman and Berry. Note one of their original journal papers has been uploaded by a university. DESIGNED FOR SERVICE FIRMSThe SERVQUAL model was initially designed for use for service firms and retailers. In reality, while most organizations will provide some form of customer service, it is really only service industries that are interested in understanding and measuring service quality. Therefore, SERVQUAL takes a broader perspective of service; far beyond simple customer service. One of the drivers for the development of the SERVQUAL model was the unique characteristics of services (as compared to physical products). These unique characteristics, such as intangibility and heterogeneity, make it much harder for a firm to objectively assess its quality level (as opposed to a manufacturer who can inspect and test physical goods). The development of this model provided service firms and retailers with a structured approach to assess the set of factors that influence consumers’ perception of the firm’s overall service quality. Service quality, while being interrelated with customer satisfaction, is actually a distinct concept.Please see the discussion of the difference between service quality and customer satisfaction. Service quality is the consumer’s assessment of overall delivery and value of the firm, which the SERVQUAL model splits into five main categories as discussed in the next section. SERVQUAL’s Five DimensionsAs later suggested by the original developers of the SERVQUAL model, the easy way to recall the five dimensions are by using the letters of RATER, as follows: R = ReliabilityA= AssuranceT = TangiblesE = EmpathyR = Responsiveness According to the original academic journal article:

Tangibles refers to physical facilities, equipment and appearance of personnel

Reliability is the firm’s ability to perform the promise service accurately and dependably

Responsiveness is the firm’s willingness to help customer and provide prompt service

Assurance is knowledge and courtesy of employees and their ability to inspire trust and confidence

Empathy is caring and individualized attention paid to customers

servqual or rater model

SERVQUAL’s 22 QuestionsWhen the SERVQUAL model was originally developed and researched it consisted of 22 questions (as also discussed on this website) under the five RATER dimensions. Like any piece of academic research, there is always debate and modifications over time of the appropriate factors/questions to use. Please keep in mind that 97 factors were originally considered and only the ones that were helpful (able to discriminate between firms) remained in the model. This study initially looked at four different service industries, namely, banking, credit cards, repairs and maintenance, and telephone companies. SERVQUAL’S TWO PARTS OF THE QUESTIONNAIREThe SERVQUAL questionnaire is split into two main sections: 1. Respondents are asked about their expectations of the ideal service firm in that service category.In this case, the questions would be reworded to state a particular industry, such as banking, or hotels, or education. There is no reference to a specific firm at this stage; instead respondents are asked about the ideal firm to deal with. This is done to frame expectations for that service category and to establish a benchmark for comparison. By working through the RATER elements, it can be seen that there would be significant differences in expectations across service industries. For example, for banking firms, assurance would be important, for medical firms, empathy would be important, and for hotels, tangibles would be important. 2. Respondents are then asked about the service quality delivery of specific firms in that industry.This approach provides the researcher with:A comparison of perceived service quality levels between competing firms,The difference between expected and delivered service quality for each firm, andThe ability to drill down to the 22 questions to determine where a specific firm is performing above/below expectations or competitor quality levels. Q10) What is Ishikawa Fish Bone and its Applications in Organizations?A10) Kaoru Ishikawa invented the fishbone diagram in the 1960s. He was a Japanese professor and a quality management innovator of his time. He used this tool for the first time when he worked with the Kawasaki shipyards in the quality management process. The fishbone diagram is also known as the Ishikawa diagram, as a tribute to its creator. What is a fishbone diagram?

A fish-bone diagram is one of the seven quality circles (QC) tools. It helps to visualize the potential causes in order to find the root cause of a particular problem. It helps to identify, analyze and improve quality issues. Sometimes, it can also be helpful to analyze what can go wrong - preventing future problems. It derives its name for its shape which resembles the side view of the skeleton of a fish. WHEN TO USE A FISHBONE DIAGRAMWhen identifying possible causes for a problemWhen a team’s thinking tends to fall into ruts FISHBONE DIAGRAM PROCEDUREMaterials needed: marking pens and flipchart or whiteboard.Agree on a problem statement (effect). Write it at the center right of the flipchart or whiteboard. Draw a box around it and draw a horizontal arrow running to it.Brainstorm the major categories of causes of the problem. If this is difficult use generic headings:

Methods

Machines (equipment)

People (manpower)

Materials

Measurement

Environment

Write the categories of causes as branches from the main arrow.Brainstorm all the possible causes of the problem. Ask "Why does this happen?" As each idea is given, the facilitator writes it as a branch from the appropriate category. Causes can be written in several places if they relate to several categories.Again ask "Why does this happen?" about each cause. Write sub-causes branching off the causes. Continue to ask "Why?" and generate deeper levels of causes. Layers of branches indicate causal relationships.When the group runs out of ideas, focus attention to places on the chart where ideas are few.

Fishbone Diagram ExampleExample 1: XYZ Manufacturing Pvt. Ltd.XYZ Manufacturing Pvt. Ltd has a production unit that produces iron nails. Recently, they started facing the issue of the nails not conforming to their standard dimensions. Also, the nails were rusted by the time they were set for delivery. Here is the fishbone diagram for the company.

Fishbone Diagram for a CompanyThe main problem is shown on the right, “Iron nails out of shape – rusting”. This means that the problem that is dealt with is the incorrect dimensions of the nails due to rust. The nails are rusty and out of dimension. Then the main categories are identified and the potential causes from each of the categories are identified. The man category has two causes. There is a cause that the workman working on the nails production does not have enough training or that he or she is not experienced enough with the machines, method or working process of the iron nails. As a solution, the organization could give adequate training to the workmen working on the nails production unit.Machine: The tool used to shape the nail was not aligned accordingly. The pressure of the coolant that is used to mitigate the heat developed during machining caused the movement of the work piece – leading to a discrepancy of alignment. A thorough check of the machine and the machining operations should be done to get the desired nails. Method: The turning process, the work piece moved too fast which lead to a distorted dimension of the nail.Measurement systems like tools are referred to here. The tools may not be correctly used for measuring the material. There could have been calculation errors. Material: The raw material was not cleaned properly because of this the nail was out of dimension when a machining operation was conducted on the nail.The environment category has a cause and a sub-cause. The cause is moisture. Why was there moisture in the atmosphere? Answer: It was the rainy season. This is the root cause from the Environment category. Now, the company can look for solutions on how to overcome the problem of moisture content, especially if it was rainy or humid weather. One important point to note is that the categories mentioned are only to give a sense of direction. All problems may not have caused by each of these categories. The categories can be changed depending on the problem or industry.

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