Production and Operations Management
Module-03
INTRODUCTION
• Now-a-days, customers demand products/services with greater
durability and reliability at the most economic price.
• This has led to stronger focus on improving the factors that affect
the various features of the product, keeping in consideration the
costs attached with the same.
• This is because, customers today are more flexible than ever, they
need to be kept hooked to our company in order to extract a value
out of them.
• In this entire context, the concept of QUALITY comes into the
picture
Quality- What is it?
• Different meaning could be attached to the word quality under different
circumstances.
• The word quality is not attached with the quality of manufactured product
only, it can be attached to the quality of the process used to produce that
product or even the management.
• In specific terms of Production Management, where a product is
manufactured, it can be defined as follows:
▫ Quality of product as the degree in which it fulfills the requirement of the
customer. It is not absolute, but it judged or realized by comparing it with some
standards”.
▫ Thus, we get some subtle idea of the Term Quality. It is the degree of fulfilling of
customer requirement.
▫ It is relative.
▫ It is measured through comparing it with standards.
Dimensions of quality
Performance Features Reliability Serviceability
Customer
Appearance Safety
Service
Dimensions of quality
• Performance: How will the product or service perform and
meet the customer’s intended use. Example: the speed of a sports
car.
• Features: The special characteristics that appeal to customers.
Example: the power steering of an automobile.
• Reliability: The likelihood of breakdowns, malfunctions, or need
for repairs. Higher the reliability lesser will be the likelihood of
breakdowns and malfunctions and better will be the quality of the
product.
Con…
• Serviceability: The speed, cost and convenience of repairs &
maintenance. Higher the serviceability better will be the quality of
the product.
• Appearance: The effect or human senses, the look, feel, taste,
smell or sound.
• Customer Service: The treatment received by the customers
before during and after the sale.
• Safety: How well the product protects users before, during and
after the use. Example: Airbags in a car.
Total quality management
• Total Quality Management is a Philosophy that involves everyone in an
organization in a continual effort to improve quality and achieve customer
satisfaction.
• Total Quality Management (TQM), is not a technical function, but a systemic
process extending throughout all phases of the business, e.g., marketing,
design, development, engineering, purchasing, production/operations.
• As per Feigenbaum, “Total Quality Management is an effective system of
integrating the quality development, quality maintenance and quality
improvement efforts of various groups in an organization so as to enable
marketing, engineering, production and service at the most economical levels
which allow for full customer satisfaction”.
• We shall not forget our aim, and that is to produce goods at lower cost of
production which helps us to achieve full customer satisfaction.
Basic concepts in total quality management
• Top Management commitment & support.
• Focus on both internal and external customers.
• Employee involvement and empowerment.
• Continuous Improvement.
• Partnership with suppliers.
• Establishing performance measures for processes.
Top Management commitment & support
• Top management plays a crucial role in the successful
implementation of TQM. Leaders must actively support quality
initiatives by setting clear quality goals, allocating adequate
resources, and creating a culture that values quality. Their
commitment motivates employees and ensures that quality
improvement becomes a strategic priority rather than a short-
term activity.
Focus on both internal and external customers
• TQM emphasizes satisfying both internal and external customers.
External customers are the end users who purchase products or
services, while internal customers are employees or departments
that depend on the output of others within the organization.
• By meeting the needs of both, organizations can improve service
quality, reduce errors, and ensure smooth workflow across
departments.
Employee involvement and empowerment
• Employee participation is essential for quality improvement. TQM
encourages employees at all levels to contribute ideas, identify
problems, and suggest solutions.
• Empowerment gives employees the authority and responsibility to
make decisions related to their work.
• This increases motivation, job satisfaction, and accountability,
leading to better performance and higher quality outcomes.
Continuous Improvement
• Continuous improvement is the core principle of TQM.
• It focuses on making small, consistent improvements in processes,
products, and services over time.
• Techniques such as PDCA (Plan-Do-Check-Act), Kaizen, and
quality circles are commonly used.
• The objective is to reduce waste, minimize defects, and enhance
efficiency and customer satisfaction.
Partnership with suppliers
• Strong relationships with suppliers are important for maintaining
quality standards. Instead of treating suppliers only as vendors,
TQM promotes long-term partnerships based on trust,
communication, and mutual benefits.
• Reliable suppliers help ensure consistent raw material quality,
timely delivery, and cost efficiency, which directly impacts the
final product or service quality.
Establishing performance measures for processes
• Measuring performance is necessary to evaluate quality
improvement efforts. TQM emphasizes the use of key
performance indicators (KPIs) such as defect rates, customer
satisfaction scores, cycle time, and productivity levels.
• These measurements help organizations identify problem areas,
monitor progress, and make data-driven decisions for continuous
improvement.
7 Underlying principles of Total quality management
1. Strive for quality in all things (Total Quality)
2. The customer is the creation of quality.
3. Improve the process or systems by which the products are
produced.
4. Quality improvement is continuous, never-ending activity.
(Continuous Improvement- Kaizen)
5. Worker Involvement is Essential.
6. Ground decisions and actions on knowledge.
7. Encourage teamwork and cooperation.
Strive for quality in all things (Total Quality)
• This principle emphasizes that quality should be maintained in
every activity of the organization, not only in the final product or
service.
• From procurement of raw materials to production, delivery, and
after-sales service, every process should follow quality standards.
• The goal is to create a culture where excellence becomes a habit
across all departments.
The customer is the creation of quality
• In TQM, quality is defined by the customer.
• A product or service is considered high quality only if it meets or
exceeds customer expectations.
• Organizations must understand customer needs, preferences, and
feedback.
• By aligning products and services with customer requirements,
businesses can achieve higher satisfaction and long-term loyalty.
Improve the process or systems by which the
products are produced
• Instead of blaming individuals for defects, TQM focuses on
improving the processes and systems that produce the output.
• Well-designed processes reduce errors, waste, and rework.
• Continuous evaluation and redesign of workflows help in
achieving efficiency, consistency, and better-quality outcomes.
Quality improvement is continuous, never-ending
activity
• Continuous improvement, also known as Kaizen, means making
small, regular improvements in work methods and processes.
• It is not a one-time effort but an ongoing practice.
• This approach helps organizations adapt to changing customer
needs, reduce operational costs, and maintain competitive
advantage.
Worker Involvement is Essential
• Employees are directly involved in daily operations, so their
participation is crucial for quality improvement.
• TQM encourages workers to share ideas, identify problems, and
participate in decision-making.
• When employees feel valued and involved, their motivation
increases, leading to better productivity and improved quality
performance.
Ground decisions and actions on knowledge
• Effective decision-making in TQM is based on facts, data, and
analysis rather than assumptions or personal opinions.
• Tools such as statistical analysis, performance reports, and quality
control charts help managers understand problems accurately.
• Data-driven decisions improve reliability and lead to better
results.
Encourage teamwork and cooperation
• Teamwork is an important element of TQM.
• Cooperation among departments and employees helps in solving
problems faster and improving overall performance.
• Cross-functional teams bring diverse skills and perspectives,
leading to innovative solutions and better coordination across the
organization.
Pros of Total Quality Management
• Deliver better products to customers - Since customers are at the
center of TQM, the number one goal is to deliver stronger and higher
quality based on customer-focused, fact-based decision-making
throughout the value chain.
• Enhance brand image - Customers who interact with a company
that truly operationalizes the principles of TQM into their business
processes will likely see an increase in brand image and reputation -
which can result in increased sales via word of mouth and satisfied
customers.
• Less product defects - By deeply analyzing the data in each
documented process, with methodical statistical process control,
companies can reduce product defects early in the product
development lifecycle.
Con…
• Minimizes product and time waste - TQM can save companies
time and money by focusing on initiatives that bring the most value
while figuring out ways to incrementally improve across all areas of the
business, ultimately resulting in higher quality products and therefore
greater customer satisfaction.
• Enables a company to become more adaptable to changing
markets & regulatory environments - If done correctly, TQM
actually enables all stakeholders at the company to detect and react
earlier to changing consumer mindsets and desires. Beyond this, it
enables easy adjustment to regulatory changes because all processes
are already documented and methodology can easily be changed to
meet customer requirements.
Cons of Total Quality Management
• Typically requires substantial financial investment
• Can be difficult to implement without expertise
• May be met with resistance to change by employees at all levels
• Can take years to show results
• Can discourage creativity and flexibility
Six Sigma
• Six sigma is a maintenance process that focuses on reducing the
variation in business production processes.
• By reducing variation, a business can achieve tighter control over
its operational systems, increasing their cost effectiveness and
encouraging productivity breakthrough.
• Six sigma is a term created at Motorola to describe the goal and
process used to achieve innovation of quality improvement.
Con…
• To achieve quality performance of six sigma level, special sets of
quality improvement methodologies and statistical tools
developed.
• These improvement methods and statistical tools are taught to a
small group of workmen known as six sigma champions.
• Six sigma methodologies improve any existing business process by
constantly reviewing and re-tuning the process.
• The Process of Six Sigma is given in the next slide:
Con…
• "Six Sigma" refers to a statistical measure of how far a process
deviates from perfection. A process that operates at Six Sigma has
a failure rate of only 0.00034%, producing virtually no defects.
Six Sigma Process
Define Measure Analysis Improve Control
Six sigma process
• Step-1- Define: This step involves determining benchmarks, Identifying key
stakeholders for implementing Six Sigma, getting customer commitments and
mapping the flow process.
• Step-2- Measure: This step involves development of failure measurement
techniques and tools, data collection process, compilation and display of data.
• Step-3- Analysis: This step involves checking and verifying the data and drawing
conclusions from data. It also involves determining improvement opportunities,
finding root causes and map causes.
• Step-4- Improve: This step involves creating model equipment and maintenance
process as solutions to the causes, total maintenance plan and schedule and
implementing those plans and schedule.
• Step-5- Control: This step involves monitoring the improved programme.
Monitoring improves performance and assesses effectiveness and will make
necessary adjustments for the deviation if exists.
ISO- International Organization for Standardization
• ISO stands for International Organization for Standardization. It is an international body,
which consists of representatives from more than 90 countries.
• The national standard bodies of these countries are the members of this organization.
Bureau of Indian Standards is a member of ISO.
• These are non-governmental organizations, which exist to provide common standards on
international trade of goods and services.
• ISO 9000 standards expect firms to have a quality manual that meets ISO guidelines,
documents, quality procedures and job instructions, and verification of compliance by third-
party auditors.
• ISO 9000 series has five international standards on quality managements. They are:
▫ ISO 9000 — Quality management and Quality assurance standards
▫ ISO 9001 — Quality systems: Quality in design
▫ ISO 9002 — Quality systems: Production and Installation
▫ ISO 9003 — Quality systems: Final inspection and test
▫ ISO 9004 — Quality management and systems
Objectives of ISO 9000 SERIES
Standard Objectives
ISO 9000 This provides guidelines on selection and use of quality management and quality assurance
standards.
ISO 9001 It has 20 elements covering design, development, production, installation and servicing.
ISO 9002 It has 18 elements covering production and installation. It is same as ISO 9001 without the
first two tasks, viz., design and development. This is applicable for the units excluding R & D
functions.
ISO 9003 It has 12 elements covering final inspection and testing for laboratories and warehouses etc.
ISO 9004 This provides guidelines to interpret the quality management and quality assurance. This also
has suggestions which are not mandatory.
Benefits of ISO 9000 series
• This gives competitive advantage in the global market.
• Consistency in quality, since ISO helps in detecting deviation from quality
early which makes it possible to take corrective action.
• Documentation of quality procedures adds clarity to quality system.
• ISO 9000 ensures adequate and regular quality training for all members of
the organization.
• ISO helps the customers to have cost effective purchase procedure.
• The customers while making purchases from companies with ISO certificate
need not spend much on inspection and testing. This will reduce the quality
cost and lead-time.
• This will help in increasing productivity.
• This will aid to improved morale and involvement of workers.
• The level of job satisfaction would be more.
Steps in ISO 9000 registration
1. Selection of appropriate standard from ISO 9001, ISO 9002 and
ISO 9003 using the guidelines given in ISO 9000.
2. Preparation of quality manual to cover all the elements in the
selected model.
3. Preparation of procedures and shop floor instructions which are
used at the time of implementing the system. Also document
these items.
4. Self-auditing to check compliance of the selected model.
5. Selection of a registrar and making application to obtain
certificate for the selected model.
ISO 14000
• The ISO 14000 series of environmental management standards are intended to
assist organizations manage the environmental effect of their business practices.
• ISO 14000 deals with the management of the environmental effects of an
organization and is concerned with processes.
• The environmental standards of ISO 14000 deal with how a company manages the
environment inside its facilities and the immediate outside environment.
• However, the standards also call for analysis of the entire life cycle of a product,
from raw material to eventual disposal.
• These standards do not mandate a particular level of pollution or performance but
focus on awareness of the processes and procedures that can affect the environment.
• It should be noted that adherence to the ISO 14000 standards does not in anyway
release a company from any national or local regulations regarding specific
performance issues regarding the environment.
ISO 14000
Standard Objectives
ISO 14001 Specification of Environmental Management Systems
ISO 14004 Guideline Standard
ISO 14010 to ISO 14015 Environmental Auditing and Related Activities
ISO 14020 to ISO 14024 Environmental Labelling
ISO 14031 & ISO 14032 Environmental Performance Evaluation
ISO 14040 to ISO 14043 Life Cycle Assessment
ISO 14050 Terms & Definitions
BENEFITS OF ISO 14000 CERTIFICATION
• The environmental awareness and the documentation that are required by the ISO
14000 standards assist a company in conforming to environmental regulations.
• Less likely to violate environmental regulation and stands ready for any
inspection/assessment/audit.
• Wider market for goods & services as many companies and governments look for
products that are supplied by ISO 14000 Certificate holders.
• The process analyses that go along with ISO 14000 certification may result in
streamlining processes and more efficient use of resources and raw materials and
subsequently reduce a company’s costs.
• It reduces the possibility of huge fines/penalties after any
inspection/assessment/audit etc.
• It provides with a safer internal environment, reduced costs, and higher employee
morale as they feel safe in their organization.
Thank You