UNIT II

TQM PRINCIPLES
Leadership – Strategic quality planning, Quality Council - Employee involvement –
Motivation, Empowerment, Team and Teamwork, Recognition and Reward, Performance
appraisal - Continuous process improvement – PDSA cycle, 5s, Kaizen - Supplier partnership
– Partnering, Supplier selection, Supplier Rating.
 UNIT II TQM PRINCIPLES
LEADERSHIP
The process of influencing others towards the accomplishment of goals. He triggers tile will
to do, shows the direction and guide the group members towards the accomplishment

CHARACTERISTICS OF QUALITY LEADERS

1. Customers first

2. Value people

3. Build suppler partnership

4. Empower people

5. Strive for excellence

6. Demonstrate involvement / commitment

7. Explain & deploy policy

8. Improve communication

9. Promote teamwork

10. Benchmark continuously

11. Establish system

12. Encourage collaboration

LEADERSHIP ROLES
ROLE OF SENIOR MANAGEMENT

1. Study and investigate TQM concepts and issues

2. Set clear quality policies and provide challenging tasks

3. Establish customer satisfaction as a long term goal

4. To become coaches and cheer leaders for encouraging and supporting the managers during
transition phase of the transformation

5. To stimulate employees to be involved

6. To attend TQM training programs

7. To up hold norms and issues

8. To create a basic of trust, respect and open communication that ensures individual
participation and continuous improvement.

9. To monitor whether quality improvement programs are conducted as planned.

STRATEGIC QUALITY PLANNING

It sets the long term direction of the organization in which it wants to proceed in future. Can
be defined "As the process of deciding on objectives of the organization, on changes on this objective,
 on the resource used to obtain these objectives and on the policies that are to govern the acquisition
use and disposition of these resources"

Quality Council:

A quality council is established to provide overall direction.

The council is composed of

1. Chief Executive Officer

2. Senior Managers
3. Coordinator or Consultant
A representative from the Union Duties of the council is
 Develop the core values, vision statement, mission statement and quality policy statement
 Develop the strategic long term plan with goals and Annual Quality Improvement Program with
objectives
 Create the total education and training plan
 Determine and monitor the cost of poor quality
 Determine the performance measures
 Determine projects those improve the process
 Establish multifunctional project and work group teams
 Revise the recognition and rewards system.

EMPLOYEE INVOLVEMENT

It is the total involvement from every person at all levels in the organization

ASPECTS OF EMPLOYEE INVOLVEMENT

1. Employee motivation
2. Employee Empowerment
3. Teams and Team work
4. Recognition and Reward Schemes
5. Performance Appraisal

EMPLOYEE MOTIVATION

It is the process of stimulating people or attempting to influence other to do your will or

accomplish desire goals through the possibility of reward
1. Improves employee involvement
2. Reduces absenteeism and increases turn over
3. Promotes job satisfaction

EMPLOYEE EMPOWERMENT.
It is an environment in which people have the ability, the confidence and the commitment to
take his responsibility and ownership to improve the process and initiate the necessary steps to satisfy
customer requirements within well-defined boundaries in order to achieve organizational values and
goals.
Job Enrichment: Is expanding content of the Job.
Job Empowerment: Is expanding the context of the job

GENERAL PRINCIPLES OR CHARACTERISTICS FOR' EMPOWERING EMPLOYEES

1. Tell people what their responsibilities are.

2. Given the authority equal to the responsibility assigned to them.
3. Set standards of excellence.
4. Give them knowledge information and feedback.
5. Trust them and treat them with dignity and respect.
,,

CONDITIONS TO CREATE THE EMPOWERED ENVIRONMENT

1. Everyone should understand the need to change

2. The system need to change to new paradigm.
3. The organization must provide information, education, and skill to its employees.

TEAMS AND TEAM WORKS

A team can be defined as a group of people working together to achieve common objectives or goals
Team work is the cumulative actions of the team during which each member of the team
subordinates his individual interest and opinions for the fulfilling of objectives of the group.
TYPES OF TEAMS

Process improvement team: Involved in improvement of sub processes or processes. Usually

has 6-10 members. Disbanded when the objective is reached. May include the local supplied and
customer depending on the location

Cross functional teams: 6-10 members temporary team. Members are Top management level
from various functional areas of management. Discuss complex problems and break down into
smaller parts to refer it to various departmental teams for further solution.

Natural work teams: Not voluntary and the total work unit is part of the team. Manager also a
part of the team and the management selects the projects to be improved. Managers must also
ensure that the entire team is comfortable with each other.

Self directed / self managed work team: Extension of natural work teams but here the group of
individuals is empowered not only to do work but manage it. No manger will present but a
coordinator (Which will be normally rotated among members) will be appointed. Additional
responsibilities of the team hiring/ dismissal, performance evaluation, customer relations,
supplier relations, recognition/rewards and training.

CHARACTERISTICS OF SUCCESSFUL TEAMS

1. Sponsor: In order to have effective liaison with quality council, there should be sponsor. The
sponsor is a person from the quality council, he is to provide support to the organization
2. Team Charter: A team charter is a document that defines the team‘s mission boundaries, the
background of the problem, the team‘s authority and duties and resources. It also identifies the
members and their assigned roles – leader, recorder, time keeper and facilitator.
3. Team Composition: Not exceeding 10 members except natural work team and self managed teams.
4. Training: The team members should be trained in the problem solving techniques team dynamics
and communication skills
5. Ground Rules: The team should have separate rules of operation and conduct. Ground rules should
be discussed with the members, whenever needed it should be reviewed and revised
6. Clear objectives, Accountability : Periodic status report should be submitted to quality council for
review
7. Well defined decision procedure, Resources: Adequate information should be provided
8. Trust by the management, Effective problems solving: Not by hunches or quick fires
9. Open communication, Appropriate Leadership, Balanced participation and Cohesiveness

ELEMENTS OF EFFECTIVE TEAM WORK

Regular scheduling with a fixed time limit, purpose, role and responsibilities, activities,
decision, results and recognition.

TEAM MANAGEMENT WHEEL

To make a lean more effective a team management wheel has been evolved. The activities are
advising, innovating, promoting, developing, organization, producing, inspecting, maintaining
and linking. The roles of wheel are advisor, explore, organizer and controller.

STAGES OF TEAM DEVELOPMENT

 Forming stage- Initial stage with only group of individuals and no team work. Team
purpose, roles are created.
 Storming Stage -Initial agreement roles are challenged. Hostilities, emerge which may
be resolved
 Norming Stage-Formal informal relations get established.
  Performing Stage -Team operates in a successful manner with trust, openness, healthy
conflict and decisiveness among the members.
 Maintenance stage – Functioning should not deteriorate with time Evaluating Stage –
Evaluating team performance

RECOGNITION AND REWARD.

Recognition is a process whereby management shows acknowledgement (Verbal or written) of

an employee outstanding performance. Recognition is a form of employee +ve motivation. Reward is
a tangible one such as increased salaries, commission, cash bonus, gain sharing etc., to promote
desirable behavior. It can be even theatre tickets, dinner for two, a small cash awards, etc., The
employees are recognized to improve their morale, show the company's appreciation for Better
Performance, create satisfied and motivated workplace and stimulate creative efforts.

INTRINSIC VS EXTRINSIC REWARDS

INTRINSIC REWARDS EXTRINSIC REWARDS
Related to feeling of accomplishment or self Related to pay or compensation issues
worth
1. Non monetary forms of recognition to 1. Profit sharing
acknowledge achievement of quality 2. Gain sharing
improvement goals 3. Employment security
2. Celebrations to acknowledge achievement 4. Compensation time
of quality improvement goals 5. Individual based performance systems
3. Regular expression of appreciation by 6. Quality based performance appraisals
managers and leaders to employees to
acknowledge achievement of quality
improvement goals
4. 360o performance appraisals feedback
from co-workers, subordinates or customers
is incorporated into performance appraisal
5. Formal suggestion system available
for individuals to make quality
improvement suggestion
6. Developmental based
performance appraisals
7. Quality based promotion

PERFORMANCE APPRAISAL.

It is a systematic and objective assessment or evaluation of performance and

contribution of individual
Needs Identifying employees for salary revision, promotion, transfer, demotion, lay
off To determine training needs of employee To take organizational inventory of people To
know personal strength and weakness of individuals To validate the selection procedure
APPRAISAL FORMATS

Ranking (From highest to lowest), Narrative (Telling strength and weakness),

Graphics (Graphical display of duties by rating), Forced choice (Placing each employee with
a predetermined % like Good 25%, Poor 10% etc) Performance appraisal.

It is a systematic and objective assessment or evaluation of performance and

contribution of individual

Needs Identifying employees for salary revision, promotion, transfer, demotion, lay
off To determine training needs of employee To take organizational inventory of people To
know personal strength and weakness of individuals To validate the selection procedure

APPRAISAL PROCESS

BENEFITS OF PERFORMANCE APPRAISAL

1. Provides a feedback to identify employees for salary revision, transfer, lay-off

2. Helps in determining training needs of employee
3. Provides organization inventory of people
4. Helps to evaluate personal strength and weakness of individuals
5. To validate the selection procedure.
6. Provide the basis for promotion, demotion etc
7. May provide some information on external factors like family circumstances, health,
financial or personal matters that may be affecting the performance

CONTINUOUS PROCESS IMPROVEMENT (CPI)

 TQM has been defined as a philosophy based on quest for progress and continual
improvement in the areas of cost, reliability, quality, innovation, efficiency and business
effectiveness
 It is a continuous learning process which never stops and is cyclic and iterative
 To do CPI, we have different approaches such as Juran Trilogy, PDSA cycle, Kaizen and
5S concept

INPUT / OUTPUT PROCESS MODEL

The process refers to business and production activities of an organization. Example

Purchasing, Engineering, Marketing and Accounting
PDSA CYCLE

It is also called as Deming Cycle or Deming Wheel. Developed by Walter A. Shewart and
popularized by Edward Deming

PLAN
• Identify the problem, plan and opportunities
• Observe and analyze
• Isolate the real causes
• Determine corrective actions

DO
• Prepare
• Apply
• Check application

STUDY / CHECK
• Check results
• Compare with goals

ACT
• Standardize and consolidate
• Prepare next stage of planning

BENEFITS OF PDSA CYCLE

• Daily routine management for the individual and or the team
• Problem solving process
• Project management
• Continuous development
• Vendor development
• Human resource management
• New product development
• Process trials
5S HOUSE KEEPING

This is a house keeping technique used to establish and maintain a productive and quality
environment in an organization. This method is invented in Japan which will give safer, more
efficient and more productive operation results in boosting of morale of workers, job involvement
and satisfaction and ownership of their responsibilities.

JAPANESE TERM MEANING

Cleaning – Throw away all rubbish

SEIRI
unrelated materials in the work place

Arranging – Set everything in proper place

SEITON
for quick retrieval and storage
Sweeping – Clean the work place, every
SEISO thing with out fail

Maintaining Cleanliness – Standardizing

SEIKETSU
the way of maintaining cleanliness

SHISUKE Self Discipline – Practice ‗5S‘ daily. Make

it a way or life. This also means commitment

RELATIONSHIP BETWEEN VARIOUS 5S

OBJECTIVES OF 5S

 Create a neat and clean work place

 Create systemize day to day working
 Improve work efficiency
 Standardize work practice
 Improve work discipline
 Improve the quality of work and products
FACTORS IN IMPLEMENTING 5S

Participation by all - Should be understood and practiced by all employees

Top management commitment – CEO and Senior management team need personally
commitment practice and supervise the program
Should be self sustaining – Banners, slogan posters and new tutors should be fully utilized to
draw attention of every one
Review the program – Every month group of people from different areas of responsibilities plan
and evaluate each zone

BENEFITS IN IMPLEMENTING 5S

• Work place becomes proud place to work

• Results in good image and- generates business
• Operations become easier and safer in work place
• Disciplined people
• Improve productivity' and morality
• Better quality awareness
• More usable space
• Less Material handling time
• Less production cost
• Preventive maintenance
• High employee involvement
• Less accidents
• More time to improvement.

SUPPLIER PARTNERSHIP

A commitment to continuous quality improvement cannot be translated into reality without

treating supplier as partner

PRINCIPLES OF CUSTOMER / SUPPLIER RELATION

• Both the customer and the supplier are fully responsible for the control quality

• Both the customer and the supplier should be independent of each other and respect each
other‘s independence

• The customer is responsible for providing the supplier with clear and sufficient
requirements so that the supplier can know precisely what to produce

• Both the customer and the supplier should enter into an non adversarial contract with
respect to quality, quality, price, delivery method and terms of payments

• The supplier is responsible for providing the quality that will satisfy the customer and
submitting necessary data upon the customer‘s request
 • Both the customer and the supplier should decide the methods to evaluate the quality of
the product or service to the satisfaction of both parties

• Both the customer and the supplier should establish in the contract the method by which
they can reach an amicable settlement of any disputes that may arise

• Both the customer and the supplier should continually exchange information, sometimes
using multifunctional teams, in order to improve the product or service quality
• Both the customer and the supplier should perform business activities such as
procurement, production and inventory planning, clerical work and system so that an
amicable and satisfactory relationship is maintained
• When dealing with business transactions both the customer and the supplier should
always have the best interest of the end user in mind

SUPPLIER PARTNERING

It is defined as a continuing relationship, between a buying firm and supplying firm,

involving a commitment over an extended time period, an exchange of information, and
acknowledgement of the risks end rewards of the relationship.

BENEFITS OF SUPPLIER PARTNERING

Improved Quality Reduced cost Increased Productivity Increased efficiency Increased market
share Increased opportunity for innovation Continuous improvement of products/services. .

JAPANES REVIEW OF PARTNERING

The Japanese partnering concept is KELRESTU – developing long term relationships with a
few key suppliers rather than having short term relationship with many suppliers.

Key elements to Partnering Long term Commitment Trust Shared vision - To satisfy the end
users is the common goal of both supplier and customer.

SUPPLIER SOURCING
Sole sourcing - only one supplier for the entire organization. This may be forced. to happen
because of patent, technical specification, raw material location, monopolistic supplier
Multiple sourcing - For a single item having two or more supplier, resulting in better quality,
better service at lower cost
Supplier Selection
Supplier selection is the process of choosing which prospective vendor or supplier should an
organization get into business with. One of the primary goals of supplier selection is to establish
a mutually-beneficial business-to-business relationship with a reliable supplier that provides the
most value for money.

Supplier selection is an important process that sets a foundation for a long-term business-to-
business partnership with suppliers that can greatly contribute to the success or failure of a
business.

Stages of Supplier Selection

Stage 1: Identify Business Needs

Identify what your business needs in order to produce its products or provide the services that it
offers. Determine also if there are industry standards that you need to meet or regulations that
your business must comply with. If you are in the business of manufacturing goods or providing
services, be aware that your business partners and your customers may also expect your own
suppliers to comply with the same standards that they require of you in order to maintain an
acceptable level of quality across a product’s lifecycle.

Stage 2: List Potential Suppliers

Come up with a list of your potential suppliers after you have identified your business needs.
One of the easiest ways to find potential suppliers is by going through your personal and
business networks. You can also check advertisements, industry publications, as well as attend
trade shows and business forums to find potential suppliers.

Stage 3: Determine your Supplier Selection Criteria

What are the supplier selection criteria?

A supplier selection criteria is a list of things that you prioritize and will help you decide which
supplier or vendor you are going to select. Aside from detailed specifications, here are some
supplier selection criteria that you may want to think about when looking for suppliers:
  Quality and safety of products – this is the very basic and non-negotiable for your
business when looking for a supplier and something that your supplier should be
consistent with.

 Flexibility – the supplier’s ability to adapt to your (possible) changing business needs
may come in handy should you require some changes to your orders in the future.

 Delivery – a supplier, at the very least, is expected to deliver on time all the time and be
reliable enough to inform you if there are going to be any foreseen delays.

 Reliability – a reliable supplier is a business partner that can greatly contribute to your
business’ success while, on the flip side, an unreliable and unpredictable supplier can
spell trouble for your business.

 Cost – make sure that the supplier’s cost is within budget. Ensure also that savings made
on lower costs will not compromise the quality and safety of the supplier’s products.
Another thing to consider is if there is a type of payment arrangement that’s going to be
ideal or agreeable to both parties in case your business needs to do this in the future.

Stage 4: Meet the Suppliers

Once you have made a shortlist, arrange a meeting with the potential suppliers and ask if
they can do a presentation of their products and demo how they supply their customers.
Meeting the suppliers is an opportunity to gauge how they operate and if they might be ideal
for your business.
Stage 5: Draft, Negotiate, and Sign the Contract

This is the conclusion of your supplier selection process that began with identifying your
business needs from suppliers, getting to know suppliers, and selecting from a shortlist of
potential suppliers. At this stage, you can draft a contract that clearly details your expectations
and review them with the supplier. Be prepared and expect a negotiation that will cover
important information such as the amount of compensation for the corresponding supplier
deliverables as well as the frequency of payment, due dates, expected delivery dates, and point
persons, among others.
Suppliers Rating

Suppliers rating is when the suppliers are provided with a status or a title based on several
factors.
Suppliers can earn a rating based on how reliable, punctual, and reasonably priced their goods
are – not to mention the quality, of course!
Ratings range from Good or Average all the way up to Best-in-Class – depending on
performance and your company’s overall criteria for success.

Quality

The quality of the products or goods the vendor supplies is the main factor. The vendor can
maintain good quality by improving production and having quality planning in the supply chain.
Quality factor consists following things.

 The supplier should follow the terms and conditions mentioned in the purchase order.

 The vendor’s products or services must meet the specifications mentioned in the proposal
and purchase order request.
  The product failure rate should be within the appropriate limit.

 The vendor should do proper repair or rework.

 He should provide an adequate time duration for replacement.

Price

A company always wants to get the materials at less expense to reduce its manufacturing cost to
increase its profit. Hence the vendor needs to set a competitive price for his products. It includes
the following things.

 Stable price: The price of the product or service must be stable over time.

 Accurate price: There should not be much difference between the purchase order and
invoice prices.

 Prior notice about price changes: He should inform about price changes in advance.

 Billing: He must provide easily readable and understandable bills.

Delivery

The supplier has to develop the ability to deliver the goods on a scheduled date. This factor
consists following things.

 Lead time: Lead time is between the actual delivery day and order placement day. The
shortest lead time helps to get a good impression of the supplier. The vendor should
deliver products on or before the promised date.

 Quantity: He must deliver the correct amount of products as mentioned in the contract.

 Packing and documentation: Packing of the products must be suitable, studied, and
undamaged. The vendor should provide proper documents along with the delivered
products.
  Emergency delivery: The vendor must be able to deliver products in case of emergency
requirements.

Service

It is one of the crucial criteria for the supplier. He has to provide good service by providing an
updated catalog, pricing, technical information, etc.

 The vendor must have the ability to handle complaints effectively.

 The vendor should provide technical support for installation, maintenance, and repair.

 Emergency support: The supplier should support in the emergency condition of product
failure or repair.

 Resolve the problems: The supplier should find the solution for the problem on time.

The supplier rating system is a by-product of the just-in-time approach.