Unit 1 Total Quality Management........................

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Unit 1.
Introduction to TQM
 Syllabus
Definitions – TOM framework, benefits, awareness and obstacles. Quality – vision,
mission and policy statements. Importance of TQM in Civil EngineeringSignificance of
quality in civil engineering projects, cost implications of poor quality, role of TQM in
achieving customer satisfaction.
 Quality:
Quality has been the most exploited word but at the same time most mis-
understood word. Quality is an off shoot of the work we do. It is a bi-product of an act. It
shows the level of commitment in doing our activity.
Definition:
The Quality is defined in many ways:
Quality is Excellence:
When quality is defined as excellence, it loses its measurability. Each person
understands to the level of his own excellence and involves in his work. It is often
misunderstood that high cost is high quality. Judgmental in nature. Ex. (Rolex watches,
BMW automobiles).
Quality is Value:
With this definition the performance and features or the usefulness of the products
are compared to only the cost of price of the product. Many a times the utility/
possession value is more than the value of the product. Ex: the features of the product
are compared to the cost of the product. Quality is Conformance to Requirements:
This definition has a manufacturing orientation. It requires that the customer gives
the specification and the products are manufactured to that requirement.
 Need for Quality

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 Good quality of goods and services can provide an organization with competitive edge.
 Good quality reduces costs due to product returns, rework and scrap.
 Good quality increases productivity, profits and other measures of success such as
brand image, product image and company goodwill.
 Most importantly, good quality generates satisfied customers today and tomorrow.
 Good quality creates an atmosphere for high employee morale, which improves
productivity.
 Definitions of Total Quality Management:
 Total – Whole, entire, complete
 Quality – Excellence, class, meeting expectation
 Management – organising, administering, art of getting things done
Total Quality Management (TQM) is a comprehensive management philosophy that
focuses on continuous improvement, customer satisfaction, and employee involvement.
It integrates quality principles into all aspects of an organization's functions and
processes.
Total Quality Management (TQM) is a comprehensive management philosophy and
approach that aims to enhance the overall performance, efficiency, and quality of an
organization's products or services. TQM emphasizes a customer-centric focus,
continuous improvement, and the involvement of all members of an organization in the
pursuit of excellence.
The key principles of Total Quality Management include:
1. Customer Focus:
Understanding and meeting the needs and expectations of customers are central to
TQM. Customer satisfaction is considered a primary measure of quality.
2. Continuous Improvement:

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TQM promotes an ongoing commitment to improvement at all levels of an
organization. This involves continuously refining processes, products, and services to
achieve higher levels of quality and efficiency.
3. Employee Involvement:
TQM recognizes the importance of involving all employees in the improvement
process. Employees are encouraged to contribute their ideas and expertise to enhance
quality.
4. Process Approach:
TQM emphasizes a systematic and process-oriented approach to managing activities.
Understanding and optimizing processes are essential for achieving consistent and high-
quality results. 5. Decision-Making Based on Data:
Decisions within a TQM framework are made based on data and analysis rather than
intuition. This ensures that improvements are grounded in factual information.
6. Supplier Relationships:
TQM extends its principles to suppliers, recognizing the importance of a
collaborative and mutually beneficial relationship with them. A focus on quality extends
beyond the organization's boundaries.
7. Leadership Commitment:
Successful implementation of TQM requires strong leadership commitment. Leaders
set the tone for a quality-focused culture and provide the necessary resources for
improvement initiatives.
8. Training and Education:
TQM emphasizes the importance of training and educating employees to enhance
their skills and knowledge. This contributes to the overall competence of the workforce.
9. Benchmarking:
TQM encourages organizations to compare their performance with industry
benchmarks or best practices to identify areas for improvement.
10. Prevention over Inspection:

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Rather than relying solely on inspection and correction, TQM emphasizes preventing
defects and errors from occurring in the first place, thereby saving resources and
improving efficiency.
Total Quality Management, when effectively implemented, can lead to increased
customer satisfaction, improved employee morale, reduced costs, and a more
competitive and resilient organization in the long run.
 Basic Approach of TQM
TQM requires six basic concepts:
1. A committed and involved management to provide long-term top-to-bottom
organizational support.
2. An unwavering focuses on the customer, both internally and externally.
3. Effective involvement and utilization of the entire work force.
4. Continuous improvement of the business and production process.
5. Treating suppliers as partners.
6. Establish performance measures for the processes.
These concepts outline an excellent way to run an organization. A brief paragraph on
each of them is given here. The next six chapters cover these concepts in greater detail.
1. Management must participate in the quality program. A quality council must be
established to develop a clear vision, set long-term goals, and direct the program.
Quality goals are included in the business plan. An annual quality improvement program
is established and involves input from the entire work force. Managers participate on
quality improvement teams and also act as coaches to other teams. TQM is a continual
activity that must be entrenched in the culture—it is not just a one-shot program. TQM
must be communicated to all people.
2. The key to an effective TQM program is its focus on the customer. An excellent
place to start is by satisfying internal customers. We must listen to the ―voice of the
customer‖ and emphasize design quality and defect prevention. Do it right the first time
and every time, for customer satisfaction is the most important consideration.

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3. TQM is an organization-wide challenge that is everyone‘s responsibility. All
personnel must be trained in TQM, statistical process control (SPC), and other
appropriate quality improvement skills so they can effectively participate on project
teams. Including internal customers and, for that matter, internal suppliers on project
teams are an excellent approach. Those affected by the plan must be involved in its
development and implementation. They understand the process better than anyone else.
Changing behavior is the goal. People must come to work not only to do their jobs, but
also to think about how to improve their jobs. People must be empowered at the lowest
possible level to perform processes in an optimum manner.
4. There must be a continual striving to improve all business and production
processes. Quality improvement projects, such as on-time delivery, order entry
efficiency, billing error rate, customer satisfaction, cycle time, scrap reduction, and
supplier management, are good places to begin. Technical techniques such as SPC,
benchmarking, quality function deployment, ISO 9000, and designed experiments are
excellent for problem solving.
5. On the average 40% of the sales dollar is purchased product or service; therefore,
the supplier quality must be outstanding. A partnering relationship rather than an
adversarial one must be developed. Both parties have as much to gain or lose based on
the success or failure of the product or service. The focus should be on quality and life-
cycle costs rather than price. Suppliers should be few in number so that true partnering
can occur.
6. Performance measures such as uptime, percent nonconforming, absenteeism, and
customer satisfaction should be determined for each functional area. These measures
should be posted for everyone to see. Quantitative data are necessary to measure the
continuous quality improvement activity.
The purpose of TQM is to provide a quality product and/or service to customers,
which will, in turn, increase productivity and lower cost. With a higher quality product
and lower price, competitive position in the marketplace will be enhanced. This series of

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events will allow the organization to achieve the objectives of profit and growth with
greater ease. In addition, the work force will have job security, which will create a
satisfying place to work.
 Benefits of TQM:
1. Increased Efficiency:
- Implementation of effective processes can lead to improved efficiency in operations.
- Reduction in waste and optimized resource utilization contribute to cost savings.
2. Enhanced Product Quality:
- Emphasis on quality control and continuous improvement results in higher-quality
products or services.
- Customer satisfaction increases as a result of consistent quality.
3. Customer Satisfaction:
- Meeting or exceeding customer expectations leads to increased loyalty and positive
word-of-mouth.
4. Employee Engagement:
- Involving employees in quality improvement processes fosters a sense of ownership
and commitment.
- Recognition for contributions boosts morale and motivation.
5. Competitive Advantage:
- Organizations that prioritize quality management often gain a competitive edge in the
market.
- Quality can be a key differentiator in attracting and retaining customers.
Following are some of the important benefits of the TQM approach for the organization
and as well as for employees :
1. Higher productivity
2. Enhancing market image
3. Increase customer loyalty
4. High employee morale

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5. Reduce warranty
6. Organizational development
7. Solving lack of absenteeism
8. Growing profits
9. Fiscal disciple through eliminating of unnecessary expenditure
10. Repeat customers
11. Increased job security
12. Cost reduction.
 Awareness of TQM:
1. Training and Education:
- Providing training programs on quality management principles and practices raises
awareness among employees.
- Continuous education ensures that teams stay informed about the latest industry
standards.
2. Communication:
- Regular communication about the importance of quality and its impact on the
organization's goals fosters awareness.
- Transparent communication builds trust among employees and stakeholders.
3. Benchmarking:
- Comparing the organization's performance with industry benchmarks enhances
awareness of areas for improvement.
- Understanding best practices helps in setting realistic quality goals.
4. Feedback Mechanisms:
- Establishing channels for feedback from customers, employees, and other
stakeholders helps in gauging awareness.
- Actively seeking input allows for continuous improvement.
 An organisation will not begin the transformation to TQM until it is aware that the
quality of the product or service must be improved.

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 Awareness comes about when an organisation loses market share or realises that
quality and productivity go hand-inhand.
 It also occurs if TQM is mandated by the customer or if management realises that
TQM is a better way to run a business and compete in domestic and world market.
 Automation and other productivity enhancements might not help a corporation if it is
unable to market its product or service because the quality is poor. The Japanese
learned this fact from practical experience.
 Prior to World War II, they could sell their products only at low prices, and even
then it was difficult to secure repeat sales. Until recent, corporations have not
recognised the importance of quality.
 However, a new attitude has emerged the quality first among the equals of cost and
service. Quality and productivity are not mutually exclusive. Improvements in quality
can lead directly to increased productivity and other benefits.
 Quality improvement is not limited to the conformance of the product or service to
specifications; it also involves the inherent quality in the design of the system.
 The prevention of the product, service, and process problems is a more desirable
objective than taking corrective action after the product is manufactured or a service
rendered
 Obstacles of TQM:
 Lack of management commitment:
Management does not allocate sufficient time and resources for TQM
implementation. The purpose is not clearly, consistently communicated to all
personnel. Management‘s compensation is not linked to quality goals such as failure
costs, customer complaints, and cycle time reduction.
 Inability to change organizational culture:

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Even individuals resist change; changing an organization‘s culture is much more
difficult and may require as much as 5 years or more. Exhortations, speeches, slogans
are effective only in the short run.
 Improper planning:
Absence of two-way communication of ideas during the development of the plan and
its implementation.
 Lack of continuous training and education.
 Inadequate use of empowerment and teamwork.
 Lack of employee involvement.
 Non-cooperation of first-line managers and middle management.
 Lack of clarity in vision.
 Emphasis on short-term results.
 Setting of unmanageable, unrealistic goals.
 Rigid system.
 TQM is considered as a quick-fix solution to current problems.
 Treating suppliers as adversaries to be manipulated, taken advantage of Adversarial
relationship between workers/unions and management. Motivating employees
through fear of punishment.
 Failure to continually improve. Tendency to sit back and rest on one‘s laurels.
Rigidly sticking to one ‗success formula‘. Lack of access to data and results. Paying
inadequate attention to internal and external customers. Ineffective measurement
techniques for key characteristics of the organization. Inability to understand the
changing needs and expectations of customers. Absence of effective feedback
mechanism.
1. Resistance to Change:
- Employees or stakeholders may resist changes to existing processes or systems.
- Overcoming resistance requires effective change management strategies.
2. Lack of Resources:

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- Inadequate financial, human, or technological resources can hinder the
implementation of quality management initiatives.
- Investment is often required for training, technology upgrades, and process
improvements.
3. Inadequate Leadership Support:
- Lack of commitment from top management can undermine the success of quality
management efforts.
- Strong leadership support is crucial for creating a quality-focused culture.
4. Complexity of Implementation:
- Implementing a comprehensive quality management system can be complex and
time-consuming.
- Breaking down the process into manageable steps and phases can help overcome this
obstacle.
5. Lack of Awareness:
- Ironically, one of the obstacles can be a lack of awareness itself. Some organizations
may not fully grasp the benefits of quality management.
- Education and communication are key to addressing this obstacle.
 Importance of TQM in Civil Engineering
Total Quality Management (TQM) stands as a universal and systematic methodology
that highlights continuous improvement, customer satisfaction, and active employee
participation across all organizational dimensions. While traditionally associated with
manufacturing and service sectors, the application of TQM principles has proven to be
strongly advantageous in the field of Civil Engineering.
1. Elevated Project Quality:
TQM underscores a commitment to quality at every phase of a project's life cycle.
From the initial planning and design stages to construction and maintenance, adherence
to TQM principles ensures that all processes meet or surpass specified standards. This

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dedication to quality acts as a safeguard against defects, reduces errors, and elevates the
overall quality of the constructed infrastructure.
2. Optimized Cost Efficiency:
TQM principles advocate for getting things right on the first attempt, directly
impacting cost efficiency. By minimizing errors, rework, and corrective actions, TQM
aids in reducing unnecessary expenditures, leading to cost savings throughout the
project. This proves especially crucial in civil engineering, where projects often entail
substantial financial investments.
3. Enhanced Customer Satisfaction:
In civil engineering, end-users of the infrastructure hold significant importance.
TQM emphasizes understanding and fulfilling customer requirements. By incorporating
the expectations and needs of stakeholders, including the public, into the project design
and execution, civil engineering projects can achieve heightened levels of customer
satisfaction. Satisfied customers are more likely to support and appreciate the
infrastructure developed.
4. Commitment to Continuous Improvement:
TQM fosters a culture of continuous improvement through feedback and learning
from experiences. In civil engineering, where technologies, materials, and construction
methods are in constant evolution, a commitment to continuous improvement is
imperative for staying ahead. Regular assessment, feedback loops, and data-driven
decision-making allow civil engineering projects to adapt to changing circumstances and
implement enhancements for future projects.
5. Effective Risk Management:
Civil engineering projects frequently encounter various uncertainties, including
environmental factors, regulatory changes, and unforeseen challenges. TQM encourages
a proactive approach to risk management by identifying potential issues early in the
project and implementing measures to mitigate them. This approach aids in minimizing
project delays and cost overruns.

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6. Employee Engagement and Empowerment:
TQM recognizes the importance of involving and empowering employees at all
levels. In civil engineering, where teamwork and collaboration are essential, engaging
workers in decision-making processes enhances overall project performance.
Empowered and motivated teams are more likely to take ownership of their work,
resulting in improved productivity and innovative problem-solving.
Total Quality Management emerges as a valuable framework for achieving
excellence in civil engineering projects. By prioritizing quality, cost efficiency, customer
satisfaction, continuous improvement, risk management, and employee involvement,
TQM significantly contributes to the successful completion of infrastructure projects. As
the civil engineering industry evolves, embracing TQM principles becomes increasingly
critical for ensuring sustainable and high-quality outcomes that meet the needs of both
present and future generations.
 Significance of Quality in Civil Engineering Projects
Quality is a paramount aspect in the field of civil engineering, playing a pivotal role
in the success and longevity of infrastructure projects. Ensuring high standards of quality
is not merely a regulatory requirement but a fundamental necessity that directly impacts
the safety, functionality, and overall effectiveness of the built environment. This
discussion explores the profound significance of quality in civil engineering projects.
1. Safety Assurance:
Feasibly the most critical aspect, quality assurance in civil engineering projects is
synonymous with safety. High-quality materials, precise engineering, and adherence to
established standards are imperative to guarantee the structural integrity of buildings,
bridges, roads, and other infrastructure. Quality controls measures help identify potential
hazards and vulnerabilities, minimizing the risk of structural failures or accidents.
2. Durability and Longevity:
Quality construction materials and meticulous workmanship contribute to the
durability and longevity of civil engineering structures. Investing in superior quality

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ensures resistance to environmental factors such as weathering, corrosion, and seismic
activity, thereby extending the lifespan of the infrastructure. Long-lasting structures
reduce the need for frequent maintenance and repair, leading to cost savings over time.
3. Functional Efficiency:
The functionality of civil engineering projects is closely tied to the quality of design
and construction. Precise engineering and attention to detail are crucial for ensuring that
structures serve their intended purpose efficiently. Quality control measures help in
avoiding design flaws, construction errors, and operational inefficiencies, resulting in
infrastructure that meets or exceeds performance expectations.
4. Compliance with Regulations:
Quality assurance is integral to meeting and surpassing regulatory standards and
codes. Civil engineering projects must adhere to a myriad of regulations to ensure public
safety and environmental protection. Rigorous quality control processes facilitate
compliance with these standards, reducing the risk of legal issues and ensuring that
projects meet the required approvals and certifications.
5. Customer Satisfaction:
The end-users of civil engineering projects, whether they are residents, commuters,
or businesses, expect a certain level of quality. Meeting or exceeding these expectations
enhances customer satisfaction. A well-executed and high-quality infrastructure project
contributes positively to the community, garnering support and fostering a sense of pride
among the stakeholders.
6. Cost-Effectiveness:
While the upfront cost of using high-quality materials and implementing stringent
quality control measures may be higher, it often results in long-term cost-effectiveness.
Quality construction reduces the likelihood of premature failures or the need for
extensive repairs, minimizing overall life-cycle costs. Additionally, well-constructed
infrastructure tends to attract more favorable financing and insurance terms.
7. Environmental Impact:

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Quality in civil engineering extends beyond structural considerations to include
environmental sustainability. Employing eco-friendly materials, efficient construction
methods, and sustainable design practices contribute to minimizing the environmental
impact of construction projects. This aligns with the growing emphasis on green and
sustainable infrastructure development.
 TQM Framework
Figure shows the framework for the TQM system. It begins with the knowledge
provided by gurus of quality: Shewhart, Deming, Juran, Feigenbaum, Ishikawa, Crosby,
and Taguchi.
As the figure shows, they contributed to the development of principles and practices
and/or the tools and techniques. Some of these tools and techniques are used in the
product and/or service realization activity. Feedback from internal/external customers or
interested parties provides information to continually improve the organization‘s system,
product and/or service.
An organization will not begin the transformation to TQM until it is aware that the
quality of the product or service must be improved. Awareness comes about when an
organization loses market share or realizes that quality and productivity go hand-in-
hand. It also occurs if TQM is mandated by the customer or if management realizes that
TQM is a better way to run a business and compete in domestic and world markets.
Automation and other productivity enhancements might not help a corporation if it is
unable to market its product or service because the quality is poor. The Japanese learned
this fact from practical experience.
Prior to World War II, they could sell their products only at ridiculously low prices,
and even then it was difficult to secure repeat sales. Until recently, corporations have not
recognized the importance of quality. However, a new attitude has emerged—quality
first among the equals of cost and service. To sum it up, the customer wants value.

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Quality and productivity are not mutually exclusive. Improvements in quality can lead
directly to increased productivity and other benefits. Many quality improvement projects
are achieved with the same work force, same overhead, and no investment in new
equipment. Recent evidence shows that more and more corporations are recognizing the
importance and necessity of quality improvement if they are to survive domestic and
world-wide competition.
Quality improvement is not limited to the conformance of the product or service to
specifications; it also involves the inherent quality in the design of the system. The
prevention of product, service, and process problems is a more desirable objective than
taking corrective action after the product is manufactured or a service rendered. T
QM does not occur overnight; there are no quick remedies. It takes a long time to
build the appropriate emphasis and techniques into the culture. Overemphasis on short-
term results and profits must be set aside so long-term planning and constancy of
purpose will prevail.

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QM framework consists of important blocks.
1. Gurus of quality : Shewhart, Deming, Juran figenbaum, Ishikawa, Crosby and
Taguchi.
2. Principles and practices : Leadership, customer satisfaction, employee involvement,
supplier partnership.
3. Tools and techniques : Benchmarking, Quality management systems, Quality
function deployment quality by design. Management tools, Failure mode and effect
analysis. Statistical process control.

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4. Product or service realization : Continuous process improvement performance
measures techniques.
 Dimension of Quality:
Quality has 2 dimensions.
These dimensions are product and service quality.
a) Dimensions of product quality:
1. Performance: primary product characteristics, e.g. picture brightness in TV.
2. Features: secondary characteristics, added features, e.g. remote control, picture-in-
picture.
3. Usability: ease of use with minimum training.
4. Conformance: meeting specifications, industry standards,. (E.g. ISI specs.,
emission norms)
5. Reliability: consistency of performance over a specified time period under
specified conditions.
6. Durability: extent of useful life, sturdiness.
7. Maintainability/Serviceability: ease of attending to maintenance, repairs.
8. Efficiency: ratio of output to input. E.g. mileage, braking distance, processing
time.
9. Aesthetics: sensory characteristics, e.g. appearance, exterior finish, texture, color,
shape, etc.
10. Reputation: subjective assessment based of past performance, brand image,
industry ranking.
11. Safety: in items like pressure cookers, electrical items, toys, cranes, etc
b) Dimensions of service quality:
1. Time: how much time a customer must wait / undergo service.
2. Timeliness: whether service will be performed when promised.
3. Completeness: whether all items in the order are included.

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4. Consistency: consistent service every time, and for every customer Reliability of
service.
5. Accessibility/Convenience: ease of obtaining the service.
6. Accuracy: absence of mistakes.
7. Responsiveness: quick response, resolution of unexpected problems.
8. Courtesy: cheerful, friendly service.
9. Competency/Expertise: In professions like doctors, lawyers, mechanics, etc.
 Vision Statement ,Mission Statement and Quality Policy:
In addition to the core values and concepts, the quality statements include the vision
statement, mission statement, and quality policy statement. Once developed, they are
only occasionally reviewed and updated. They are part of the strategic planning process.
The utilization of the three statements varies considerably from organization to
organization. In fact, small organizations may use only the quality policy statement.
Additionally, there may be considerable overlap among the statements.
a) Vision Statement
The vision statement is a short declaration of what an organization aspires to be
tomorrow. It is the ideal state that might never be reached but which you continually
strive to achieve. Successful visions are timeless, inspirational, and become deeply
shared within the organization, such as IBM‘s service, Apple‘s computing for the
masses, Disney theme park‘s the happiest place on earth, and Polaroid‘s instant
photography.
These shared visions usually emerge over time. Ideally, visions are elevated to a
cause. Successful visions provide a succinct guideline for decision-making. Having a
brief statement of the desired end provides criteria for sound decision making. Once
remarked that he used the company‘s vision statement when faced with difficult
decisions in gray areas that were not covered by company policy.
It is important that the leader articulate and act upon the vision and that employee
understand the vision and can connect their work with the well-being of the

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organization. One way to reinforce the significance of the vision statement is to include
it (or a portion of it) on employee badges.
An example of a more elaborate vision statement is
1. L&T shall be a professionally-managed Indian multinational, committed to total
customer satisfaction and enhancing shareholder value.
2. L&T shall be an innovative, entrepreneurial and empowered team constantly
creating value and attaining global benchmarks.
3. L&T shall foster culture of caring, trust and continuous learning while meeting
expectations of employees, stakeholders and society.
b) Mission Statement
The mission statement answers the following questions:
Who we are,
Who are the customers,
What we do, and how we do it.
This statement is usually one paragraph or less in length, is easy to understand, and
describes the function of the organization. It provides a clear statement of purpose for
employees, customers, and suppliers.
An example of a mission statement, Our mission is to improve continually our
products and services to meet our customers‘ needs, allowing us to prosper as a business
and to provide a reasonable return to our shareholders, the owners of our business.
……………………………..FORD MOTOR COMPANY.
A simpler mission statement is Our mission is to help our customers achieve their
business goals through excellence in global product realization. We will enable this
through solutions based on innovative technologies, efficient processes and world-class
competencies in our people.
c) Quality Policy Statement
The quality policy is a guide for everyone in the organization as to how they should
provide products and service to the customers.

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It should be written by the CEO with feedback from the work force and be approved
by the quality council.
 Common characteristics are Quality is first among equals.
 Meet the needs of the internal and external customers.
 Equal or exceed the competition.
 Continually improve the quality. Include business and production practices.
 Utilize the entire work force.
 A quality policy is a requirement of ISO/QS 9000.
 Role of Total Quality Management (TQM) in Achieving Customer Satisfaction
Customer satisfaction is a cornerstone of business success, and Total Quality
Management (TQM) plays a pivotal role in ensuring organizations meet and exceed
customer expectations. TQM is a comprehensive management philosophy that emphasizes
continuous improvement, employee involvement, and a customer-centric approach. This
article explores the key ways in which TQM contributes to achieving and sustaining high
levels of customer satisfaction.
1. Customer-Centric Philosophy:
- TQM instills a customer-focused mindset throughout the organization.
- Understanding and meeting customer needs become central to decision-making.
- All employees, from top management to front-line workers, are aligned with the
goal of satisfying customers.
2. Quality Product and Service Delivery:
- TQM emphasizes the production of high-quality products and services.
- Stringent quality control measures are implemented at every stage of the
production process.
- Consistency in delivering defect-free products enhances customer trust and loyalty.
3. Continuous Improvement:

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- The core principle of TQM is continuous improvement or Kaizen.
- Organizations regularly assess and enhance processes to eliminate defects and
inefficiencies.
- A commitment to ongoing improvement ensures that products and services evolve
to meet changing customer expectations.
4. Employee Involvement:
- TQM encourages the active participation of employees in quality improvement
initiatives.
- Employees at all levels are empowered to contribute ideas and suggestions.
- Engaged and motivated employees are more likely to provide excellent service,
positively impacting customer satisfaction.
5. Communication and Feedback:
- TQM promotes open communication channels with customers.
- Customer feedback is actively sought and used to identify areas for improvement.
- Transparent communication builds trust and allows organizations to respond
promptly to customer concerns.
6. Process Optimization:
- TQM advocates a systematic approach to managing and optimizing processes.
- Well-defined and efficient processes lead to consistent and reliable outcomes.
- Optimized processes contribute to the timely delivery of products and services,
meeting customer expectations.
7. Relationship Building:
- TQM extends beyond the organization to include suppliers and other stakeholders.
- Strong supplier relationships ensure the quality of raw materials and components.
- Collaborative efforts with suppliers contribute to a seamless supply chain, positively
impacting the overall customer experience.
8. Data-Driven Decision Making:
- TQM relies on data and metrics to drive decision-making.

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- Customer satisfaction surveys, quality metrics, and performance indicators guide
improvements.
- Data-driven insights enable organizations to address specific customer pain points
and preferences.
 Total Quality Management is a powerful strategy for achieving and maintaining
customer satisfaction. By embedding TQM principles in organizational culture
and operations, businesses can create an environment where quality is not just a
goal but a way of doing business. The holistic approach of TQM ensures that
organizations consistently meet customer expectations, foster long-term
relationships, and position themselves for sustained success in the competitive
marketplace.
 Cost of Quality
―Cost of quality‖ is an approach to measure and track financial impact of various
quality activities. Until 1950s, the concept did not explicitly extend to the quality
function and the activities related to inspection, testing and audits were merely
categorized as ―overheads‖.
In the 1950s, Dr. Armand Feigenbaum suggested to consider reporting systems
focusing on quality costs. Dr. Joseph Juran also started emphasizing the need to speak of
the language of upper management which is money. As the upper management best
understands the language of money, reporting cost of quality can help in prioritizing
appropriate improvement activities to minimize overall costs.
With the increasing efforts towards quality control, more and more resources were
allocated to the quality function and it became necessary to account for them separately.
The heads of quality departments also had to sell their activities to the top management.
Since the management understands only one language, money, there was the emergence
of the concept of studying quality related costs. Such studies were undertaken and they
led to many surprising results. The quality related costs were much more than those
shown in accounting statements. These costs were not only limited to factory operations

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but also extended to support functions. Big chunk of the cost was on account of poor
quality.
The term ―Quality Cost‖ means different to different people. Some perceive it as the
cost involved in attaining the quality, whereas some equate it with the cost of running
Quality Department. The interpretation of quality specialists has been to equate the
―quality cost‖ with the cost of poor quality.
 What is the Need for Evaluation?
The language of money is well understood across an organization. Quality problems,
when manifested on monetary scale, have better appeal. Cost of quality is a result of
many specific segments, each one linked with a specific (or linked) root cause.
Estimation of quality cost leads to identification of improvement plans and also
sensitizes the managers to take actions in order to reduce the costs. Reduction in quality
cost has a direct bearing on the increase in profitability, without increasing sales or
without deploying more resources.
Some components of poor quality are the result of product failure, which takes place
after sales. Quality costing and its associated analysis exercise leads to identification of
opportunities for reducing customer dissatisfaction. Most companies have financial
controls on the basis of departments. For costs like scrap, rework and field failures,

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which cut across the departmental lines, quality costing helps in bringing the right focus
and financial allotments.
 Categories of Quality Cost
1. Internal failure costs
These are costs which are associated with the defects or non-conforming
situations that are found prior to shipment of the product to customer. These costs can
be reduced to zero if no defect existed prior to shipment. Whenever quality appraisals
are carried out, there exists a possibility of discovering nonconforming situations.
Such situations are salvaged by rework, complete replacement or scrapping.
The total cost of carrying out re-inspection/re-tests, failure analysis, evaluation,
disposition and subsequent actions are included in the internal failure cost. In
summary, this includes all material, labor, energy and overhead expenses that are
wasted on account of non-conforming or defective product or service.
Examples of internal failure costs are:
• Premium freight due to late delivery
• Internal scrap
• Engineering and drawing changes to correct errors
• labour charges for dismantle of casting column of rejected strength.
2. External failure costs
Often the defects are found only after the product reaches the dealer or
customer. Such costs are included in the external failure costs. This component of
quality cost also disappears if there are no defects.
External failure costs arise from the rejection of products and service by the
customer due to poor quality. The external failure costs are tests that occur when non-
conforming product or services reaches the customer. These costs are associated with
the adjustments of malfunctions after delivery of the product, such as: repair costs,
travel and lodging expenses, replacement costs, stock spare parts etc.
It includes:

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 Costs of commissioning failures
 Cost of servicing or replacing the detective items
 Cost of guarantee and warranty claims
 Cost of lost goodwill of customer
 Cost of product reliability compensation
 Cost of loss of sales
Some examples of external failure cost are:
• Complaints:
Complaints from customer are analyzed, resolved and communication is sent to
customer. Sometimes it may also involve field service or adjustments.
• Warranty claims:
Recall of vehicles for defects, costs involved in repairs or replacement of product
during warranty period, the cost associated with receipt, evaluation and replacement
of defective product from field.
• Retrofit and recall costs:
It is often required to modify or update the product in order to incorporate new design
changes in order to overcome design deficiencies. There are several cases in recent
past, where automobiles were recalled due to failure investigation reports on the steel
used in the manufacturing.
• Liabilities and penalties:
Insurance claims and contractual obligatory claims are included in such types
of costs.
• Allowances and customer goodwill:
The cost of concessions offered to the customer due to substandard product,
poor quality or costs incurred because the customer is not completely satisfied with
the quality because his expectations were higher than those delivered to him by the
product.

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• External failure costs will also include lost sales and loss of goodwill although these
are difficult to measure.
a. Appraisal costs
These are the costs incurred while conducting inspection, tests, and several
other planned evaluations with the purpose of determining whether the product (or
service) confirms to its stated requirements.
Appraisal cost also includes various activities related to quality system audit,
cost of legal compliance, supplier surveillance, product quality audits, costs for
calibration of testing equipment, etc. Thus, cost of maintaining the inspection and test
equipment is a part of appraisal cost.
Examples include:
• Design reviews
• Set-up inspection
• Performance testing by customer
• Calibration of gauges
• Calibration of testing facility
• Receiving inspection of purchased parts
b. Prevention costs
These are the costs of all such activities undertaken to prevent defects in
design, development, purchase, labor and other aspects of creation of the
product/service. Prevention costs lower the other costs (failure cost and appraisal
cost). Prevention is achieved by examining previous failure data and developing
action plans for incorporating into the basic system so that the same failures/ defects
do not occur again.
Examples of prevention costs include:
• Staff training
• Product Quality Planning
• Design and Process

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• Tolerance analysis before design release
• Computer aided design and analysis
• Process capability study for process qualification
• Part selection for better reliability
• Designed experiment for optimum settings of the product.
Hidden costs, also known as the intangible costs, are the cost associated with
providing a non-conforming product or service to a customer that are difficult
to identify and quantify.
Optimum Quality costs (Economic model for quality costs)
The model shows the curves:
 Cost of internal and external failures curves:
These costs are equal to zero when the product is 100 % good and equal to
infinity when the product is 100 % defective.
 Costs of appraisal plus prevention curve:
These costs are equal to zero when the product is 100% defective and rise as
perfection is approached.
 Basic Approach of TQM

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Six concepts of Total Quality Management are :
1. Top level support for TQM
Management commitment to TQM principles and methods & long term
Quality plans for the Organization
2. Focus on the customer/client
Customer/client requirements should be considered as the top priority, and it is
important to always remember that it is the customer who defines what quality is.
Keep the customer satisfied at all times.
3. Quality at all levels of the work force
Involve all the employees in the organization in the quality process. It is very
important to make your employees understand how the quality process works, for
they are the ones who will create/sustain quality, and not you.
4. Continuously improve the quality process
A very critical concept in TQM is to continuously enhance and refine your
quality process.
5. Treating suppliers as partners
Have a close relationship with your suppliers, treat them as if they were
partners to your company, this will better involve them in your quality process, and
they will start appreciating and respecting your work on TQM, and they will work
with you towards achieving your goals when it comes to enhancing quality.
6. Establish performance measures for the processes
Measure the performance of quality process. Use tools to track your quality
process and measure its performance to see if there is any improvement needed.

Unit 1 Total Quality Management........................

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