Module 5

Total Quality Management

•Evolution of quality; Concept, Meaning and Features of
TQM, Eight building blocks of TQM; TQM tools.
•Benchmarking: Concepts, Meaning, Benefits,
Elements, Reasons for benchmarking, Process of
benchmarking,
•FMEA;
•Quality Function Deployment (QFD) – House of
Quality, QFD Process, Benefits,
•Taguchi Quality Loss Function,
Quality Circles.
•Total Productive Maintenance (TPM) – Concept and need.
Evolution of quality
• https://asq.org/quality-resources/history-of-quality

• Quality Management in Medieval Gu

ilds
• Quality Management in the Industria
l Revolution
• Quality Management in WWII
• Quality Management in the 20th Cen
tury
• The Development of Total Quality M
Evolution of quality
QUALITY IN THE MEDIEVAL
GUILDS OF EUROPE

• The quality movement can trace its roots back to

medieval Europe
• Craftsmen began organizing into unions called guilds
in the late 13th century.
• These guilds were responsible for developing strict
rules for product and service quality.
• Inspection committees enforced the rules by marking
flawless goods with a special mark or symbol.
• Craftsmen themselves often placed a second mark on
the goods they produced.
QUALITY IN THE MEDIEVAL
GUILDS OF EUROPE
• At first this mark was used to track the origin of
faulty items.
• But over time the mark came to represent a
craftsman’s good reputation.
• Inspection marks and master craftsmen marks
served as proof of quality for customers
throughout medieval Europe.
• This approach to manufacturing quality was
dominant until the Industrial Revolution in the
early 19th century.
QUALITY IN THE INDUSTRIAL REVOLUTION

Until the early 19th century, manufacturing in the

industrialized world tended to follow this
craftsmanship model:
• The factory system, with its emphasis on product
inspection.
• Started in Great Britain in the mid-1750s and grew
into the Industrial Revolution in the early 1800s.
• American quality practices evolved in the 1800s as
they were shaped by changes in predominant
production methods.
QUALITY IN THE INDUSTRIAL REVOLUTION

• Craftsmanship
• The Factory System
• The Taylor System
Craftsmanship
• In the early 19th century, manufacturing in the
United States tended to follow the craftsmanship
model used in the European countries.
• Since most craftsmen sold their goods locally,
each had a tremendous personal stake in meeting
customers’ needs for quality.
• If quality needs weren’t met, the craftsman ran
the risk of losing customers not easily replaced.
• Therefore, masters maintained a form of
quality control by inspecting goods before sale.
The Factory System
• A product of the Industrial Revolution in Europe, began
to divide the craftsmen’s trades into specialized tasks.
• This forced craftsmen to become factory workers and
• Forced shop owners to become production supervisors
• Marked an initial decline in employees’ sense of
empowerment and autonomy in the workplace.
• Quality in the factory system was ensured through the
skill of laborers supplemented by audits and/or
inspections.
• Defective products were either reworked or scrapped.
The Taylor System
• Late in the 19th century the United States
broke further from European tradition and
adopted a new management approach
developed by Frederick W. Taylor,
• Goal was to increase productivity without
increasing the number of skilled craftsmen.
• He achieved this by assigning factory planning
to specialized engineers and by using
craftsmen and supervisors as inspectors and
managers who executed the engineers’ plans.
• According to Taylor, “Scientific Management is an art of knowing exactly
what you want your men to do and seeing that they do it in the best and
cheapest way”.
• Taylor’s approach led to remarkable rises in
productivity, but the new emphasis on
productivity had a negative effect on quality.
• To remedy the quality decline,
• Factory managers created inspection
departments to keep defective products from
reaching customers.
QUALITY IN WORLD WAR II

• After entering World War II, the United States enacted

legislation to help gear the civilian economy to military
production.
• During this period, quality became a critical component
of the war effort and an important safety issue.
• Unsafe military equipment was clearly unacceptable,
and the U.S. armed forces inspected virtually every unit
produced to ensure that it was safe for operation.
• This practice required huge inspection forces and
caused problems in recruiting and retaining competent
inspection personnel.
QUALITY IN WORLD WAR II
• To ease the problems without compromising product safety,
the armed forces began to use sampling inspection to replace
unit-by-unit inspection.
• With the aid of industry consultants, particularly from Bell
Laboratories,
• Adapted sampling tables and published them in a military
standard, known as Mil-Std-105.
• These tables were incorporated into the military contracts so
suppliers clearly understood what they were expected to
produce.
• The armed forces also helped suppliers improve quality by
sponsoring training courses in Walter Shewhart’s
statistical quality control (SQC) techniques.
QUALITY IN THE EARLY 20TH CENTURY

• The beginning of the 20th century marked the

inclusion of "processes" in quality practices.
• A "process" is defined as a group of activities
that takes an input, adds value to it, and
provides an output.
• Walter Shewhart began to focus on controlling
processes in the mid-1920s, making quality
relevant not only for the finished product but
for the processes that created it.
QUALITY IN THE EARLY 20TH CENTURY

• Shewhart recognized that industrial processes

yield data.
• Shewhart determined this data could be
analyzed using statistical techniques to see
whether a process is stable and in control, or if
it is being affected by special causes that
should be fixed.
• In doing so, Shewhart laid the foundation for
control charts, a modern-day quality tool.
• W. Edwards Deming, a statistician with the
U.S. Department of Agriculture and Census
Bureau, became a proponent of Shewhart’s
SQC methods
• Later became a leader of the quality
movement in both Japan and the United
States.
The Development of Total Quality Management

• The birth of total quality in the United States was in

direct response to a quality revolution in Japan
following World War II,
• As major Japanese manufacturers converted from
producing military goods for internal use to producing
civilian goods for trade.
• At first, Japan had a widely held reputation for shoddy
exports, and their goods were shunned by international
markets.
• This led Japanese organizations to explore new ways of
thinking about quality.
Deming, Juran, and Japan
• The Japanese welcomed input from foreign
companies and lecturers, including two
American quality experts:
• W. Edwards Deming, who had become
frustrated with American managers when
most programs for statistical quality control
were terminated once the war and
government contracts came to and end.
• Joseph M. Juran, who predicted the quality of Japanese
goods would overtake the quality of goods produced in
the United States by the mid-1970s because of Japan’s
revolutionary rate of quality improvement.
• Japan’s strategies represented the new "total quality"
approach.
• Rather than relying purely on product inspection,
Japanese manufacturers focused on improving all
organizational processes through the people who used
them.
• As a result, Japan was able to produce higher-quality
exports at lower prices, benefiting consumers
throughout the world.
The American Total Quality Management Response

• At first, U.S. manufacturers held onto to their assumption

that Japanese success was price-related, and thus
responded to Japanese competition with strategies aimed
at reducing domestic production costs and restricting
imports.
• This, of course, did nothing to improve American
competitiveness in quality.
• As years passed, price competition declined while quality
competition continued to increase.
• The chief executive officers of major U.S. corporations
stepped forward to provide personal leadership in the
quality movement.
• The U.S. response, emphasizing not only statistics
but approaches that embraced the entire
organization, became known as
Total Quality Management (TQM).
• Several other quality initiatives followed. The
ISO 9000 series of quality-management standards,
for example, were published in 1987.
• The Baldrige National Quality Program and
Malcolm Baldrige National Quality Award were
established by the U.S. Congress the same year.
American companies were at first slow to adopt
the standards but eventually came on board.
BEYOND TOTAL QUALITY MANAGEMENT

• As the 21st century begins, the quality movement has matured.

New quality systems have evolved beyond the foundations laid
by Deming, Juran, and the early Japanese practitioners of
quality.
• Some examples of this maturation in quality management
include:
• Most recently in 2015, the ISO 9001 standard was revised to
increase emphasis on risk management.
• In 2000, the ISO 9000 series of quality management standards
was revised to increase emphasis on customer satisfaction.
• Beginning in 1995, the Malcolm Baldrige National Quality Award
added a business results criterion to its measures of applicant
success.
BEYOND TOTAL QUALITY MANAGEMENT
• Six Sigma, a methodology developed by Motorola to improve
its business processes by minimizing defects, evolved into an
organizational approach that achieved breakthroughs and
significant bottom-line results.
• Quality function deployment was developed by Dr. Yoji Akao as
a process for focusing on customer wants or needs in the
design or redesign of a product or service.
• Sector-specific versions of the ISO 9000 series of quality
management standards were developed for such industries as
automotive (QS-9000 and ISO/TS 16949), aerospace (AS9000)
and telecommunications (TL 9000) and for environmental
management (ISO 14000).
• Quality has moved beyond the manufacturing
sector into such areas as service, healthcare,
education, and government.
• The Malcolm Baldrige National Quality Award
has added education and healthcare to its
original categories: manufacturing, small
business, and service.
• Many advocates are pressing for the adoption
of a "nonprofit organization" category as well.
Meaning and Features of TQM
• A core definition of total quality management
(TQM) describes a management approach to
long-term success through customer
satisfaction.
• In a TQM effort, all members of an
organization participate in improving
processes, products, services, and the culture
in which they work.
• https://quizizz.com/admin/quiz/
5f603fdc553efe001b91e2fd/total-quality-
management-tqm
Concept, Meaning of TQM

• TQM is a continuous process of improvement for

individual, groups as well as the entire organisation,
whereby managers attempt to change the organization’s
way of working by developing people’s knowledge about
– what to do,
– how to do,
– doing it with the right methods and
– measuring the improvement of the process and the current
level of achievement.
• Total Quality Management (TQM) is a business
management strategy aimed at embedding awareness
of quality in all organizational processes.
Meaning of TQM
• Total Quality Management (TQM) is a business
management strategy aimed at embedding
awareness of quality in all organizational
processes.
• TQM is widely used in manufacturing,
education, hospitals, call centers, government,
and service industries, as well as space and
science programs.
Concept of TQM
• Total Quality Management is the organization-
wide management of quality.
• Management consists of planning, organizing,
directing, control, and assurance.
• Total quality is called total because it consists
of two qualities – quality of return to satisfy
the needs of the shareholders, or quality of
products.
History of Total Quality Management
(TQM)
Features of TQM

• Commitment to customer needs.

• Close link with the supply chain
• Personal responsibility by employees
• Company wide policy for all staff
• Emphasis on teamwork
• Clear measures of “Quality”
• Information gathering to support these
measures
• Well-used 2-way communication systems.
Eight building blocks of TQM
• https://asq.org/quality-resources/total-
quality-management
Customer-focused: The customer ultimately
determines the level of quality.
• Training employees, integrating quality into the
design process, or upgrading computers or
software.
Total employee involvement: All employees
participate in working toward common goals.
• Total employee commitment can only be
obtained after fear has been driven from the
workplace,
• Provide the proper environment
Process-centered: A fundamental part of TQM
is a focus on process thinking.
• A process is a series of steps that take inputs
from suppliers (internal or external) and
transforms them into outputs that are
delivered to customers (internal or external).
• The steps required to carry out the process
are defined, and performance measures are
continuously monitored in order to detect
unexpected variation.
• Integrated system
• Different functional specialties often organized
into vertically structured departments, it is the
horizontal processes interconnecting these
functions that are the focus of TQM.
• Micro-processes add up to larger processes,
• Everyone must understand the vision, mission
• Business performance must be monitored and
communicated continuously.
• Every organization has a unique work culture
• Continually improve and exceed the expectations of
customers, employees, and other stakeholders.
• Strategic and systematic approach
• A critical part of the management of quality is
the strategic and systematic approach to
achieving an organization’s vision, mission,
and goals.
• This process, called strategic planning or
strategic management,
• Includes the formulation of a strategic plan
that integrates quality as a core component.
• Continual improvement:
• A large aspect of TQM is
continual process improvement.
• Continual improvement drives an organization
to be both analytical and creative
• FindS ways to become more competitive and
more effective at meeting stakeholder
expectations.
• Fact-based decision making
• Data on performance measures are necessary.
• TQM requires that an organization continually
collect and analyze data in order to improve
decision making accuracy,
• Achieve consensus, and allow prediction
based on past history.
• Communications
• During times of organizational change,
• As well as part of day-to-day operation,
effective communications plays a large part in
maintaining morale and In motivating
employees at all levels.
• Communications involve strategies, method,
and timeliness.
• Customer-focused: The customer ultimately determines the
level of quality. No matter what an organization does to foster
quality improvement— training employees, integrating quality
into the design process, or upgrading computers or software—
the customer determines whether the efforts were
worthwhile.
• Total employee involvement: All employees participate in
working toward common goals. Total employee commitment
can only be obtained after fear has been driven from the
workplace, when empowerment has occurred, and when
management has provided the proper environment. High-
performance work systems integrate continuous improvement
efforts with normal business operations. Self-managed work
teams are one form of empowerment.
• Process-centered: A fundamental part of TQM is a focus on process thinking.
A process is a series of steps that take inputs from suppliers (internal or
external) and transforms them into outputs that are delivered to customers
(internal or external). The steps required to carry out the process are defined,
and performance measures are continuously monitored in order to detect
unexpected variation.
• Integrated system: Although an organization may consist of many different
functional specialties often organized into vertically structured departments,
it is the horizontal processes interconnecting these functions that are the
focus of TQM.
• Micro-processes add up to larger processes, and all processes aggregate into the business
processes required for defining and implementing strategy. Everyone must understand the
vision, mission, and guiding principles as well as the quality policies, objectives, and critical
processes of the organization. Business performance must be monitored and communicated
continuously.
• An integrated business system may be modeled after the Baldrige Award criteria and/or
incorporate the ISO 9000 standards. Every organization has a unique work culture, and it is
virtually impossible to achieve excellence in its products and services unless a good quality
culture has been fostered. Thus, an integrated system connects business improvement
elements in an attempt to continually improve and exceed the expectations of customers,
employees, and other stakeholders.
• Strategic and systematic approach: A critical part of the management of
quality is the strategic and systematic approach to achieving an organization’s
vision, mission, and goals. This process, called strategic planning or strategic
management, includes the formulation of a strategic plan that integrates
quality as a core component.
• Continual improvement: A large aspect of TQM is
continual process improvement. Continual improvement drives an
organization to be both analytical and creative in finding ways to become
more competitive and more effective at meeting stakeholder expectations.
• Fact-based decision making: In order to know how well an organization is
performing, data on performance measures are necessary. TQM requires that
an organization continually collect and analyze data in order to improve
decision making accuracy, achieve consensus, and allow prediction based on
past history.
• Communications: During times of organizational change, as well as part of
day-to-day operation, effective communications plays a large part in
maintaining morale and in motivating employees at all levels.
Communications involve strategies, method, and timeliness.
TQM Tools
• https://www.ifm.eng.cam.ac.uk/research/
dstools/tqm-tools/#:~:text=Scatter
%20Plots,Histogram%20or%20Bar%20Graph
TQM Tools

• Pareto Principle
• Scatter Plots
• Control Charts
• Flow Charts
• Cause and Effect , Fishbone, Ishikawa Diagram
• Histogram or Bar Graph
• Check Lists
• Check Sheets
Pareto Principle
• The Pareto principle suggests that most effects
come from relatively few causes.
• In quantitative terms: 80% of the problems
come from 20% of the causes (machines, raw
materials, operators etc.);
• 80% of the wealth is owned by 20% of the
people etc.
• Therefore effort aimed at the right 20% can
solve 80% of the problems.
• Double (back to back) Pareto charts can be
used to compare 'before and after' situations.
• General use, to decide where to apply initial
effort for maximum effect.
Scatter Plots
• A scatter plot is effectively a line graph with no
line
• The point intersections between the two data
sets are plotted but no attempt is made to
physically draw a line.
• The Y axis is conventionally used for the
characteristic whose behaviour we would like
to predict.
• Use, to define the area of relationship
between two variables.
• Warning: There may appear to be a
relationship on the plot when in reality there
is none, or both variables actually relate
independently to a third variable.
Control Charts
CONTROL CHART

• The control chart is a graph used to study how a

process changes over time.
• Data are plotted in time order.
• A control chart always has a central line for the
average, an upper line for the upper control limit, and
a lower line for the lower control limit.
• These lines are determined from historical data.
• By comparing current data to these lines, you can draw
conclusions about whether the process variation is
consistent (in control)
• Is unpredictable (out of control, affected by special
causes of variation)
WHEN TO USE A CONTROL CHART

• When controlling ongoing processes by finding and

correcting problems as they occur
• When predicting the expected range of outcomes from a
process
• When determining whether a process is stable (in
statistical control)
• When analyzing patterns of process variation from
special causes (non-routine events) or common causes
(built into the process)
• When determining whether your quality improvement
project should aim to prevent specific problems or to
make fundamental changes to the process
FLOW CHARTS
• A flowchart is a picture of the separate steps
of a process in sequential order.
• It is a generic tool that can be adapted for a
wide variety of purposes
• Can be used to describe various processes,
such as a manufacturing process, an
administrative or service process, or a project
plan
WHEN TO USE A FLOWCHART

• To develop understanding of how a process is

done
• To study a process for improvement
• To communicate to others how a process is done
• When better communication is needed
between people involved with the same process
• To document a process
• When planning a project
FLOWCHART BASIC PROCEDURE

• Define the process to be diagrammed. Write

its title at the top of the work surface.
• Discuss and decide on the boundaries of your
process: Where or when does the process
start? Where or when does it end? Discuss
and decide on the level of detail to be
included in the diagram.
• Brainstorm the activities that take place.
• Write each on a card or sticky note.
• Arrange the activities in proper sequence.
• When all activities are included and everyone
agrees that the sequence is correct, draw
arrows to show the flow of the process.
• Review the flowchart with others involved in
the process (workers, supervisors, suppliers,
customers) to see if they agree that the
process is drawn accurately.
High-Level Flowchart for an Order-Filling
Process
COMMONLY USED SYMBOLS IN DETAILED FLOWCHARTS
Fishbone diagrams or Herringbone
diagrams or Cause-and-effect diagrams,or
Fishikawa

• Ishikawa diagrams are causal diagrams created

by Kaoru Ishikawa that show the potential
causes of a specific event.
• Common uses of the Ishikawa diagram are
product design and quality defect prevention
to identify potential factors causing an overall
effect.
WHEN TO USE A FISHBONE DIAGRAM

• When identifying possible causes for a

problem
• When a team’s thinking tends to fall into ruts
FISHBONE DIAGRAM PROCEDURE

• 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.
Bar chart

• A bar chart or bar graph is a chart or graph

that presents categorical data with
rectangular bars with heights or lengths
proportional to the values that they
represent.
• The bars can be plotted vertically or
horizontally.
• A vertical bar chart is sometimes called a
column chart.
Uses of Bar Graph
• The comparisons between different
variables are easy and convenient.
• It is the easiest diagram to prepare
and does not require too much
effort.
• It is the most widely used method of
data representation. Therefore, it is
used by various industries.
• It is used to compare data sets. Data
sets are independent of one another.
• It helps in studying patterns over
long periods of time.
Types of Bar Graphs

• Vertical Bar Graph

• Horizontal Bar Graph
• Grouped Bar Graph
• Stacked Bar Graph
• Vertical Bar Graphs
• When the given data is represented vertically
in a graph or chart with the help of
rectangular bars that show the measure of
data, such graphs are known as vertical bar
graphs. The rectangular bars are vertically
drawn on the x-axis, and the y-axis shows the
value of the height of the rectangular bars
which represents the quantity of the variables
written on the x-axis.
• Horizontal Bar Graphs
• When the given data is represented
horizontally by using rectangular bars that
show the measure of data, such graphs are
known as horizontal bar graphs. In this type,
the variables or the categories of the data
have to be written and then the rectangular
bars are horizontally drawn on the y-axis and
the x-axis shows the length of the bars equal
to the values of different variables present in
the data.
• Stacked Bar Graph
• The stacked bar graph is also referred to as the
composite bar graph. It divides the whole bar into
different parts. In this, each part of a bar is
represented using different colors to easily
identify the different categories. It requires
specific labeling to indicate the different parts of
the bar. Thus, in a stacked bar graph every
rectangular bar represents the whole, and each
segment in the rectangular bar shows the
different parts of the whole. It can be shown
vertically or horizontally.
• Grouped Bar Graph
• The grouped bar graph is also referred the
clustered bar graph. It is used to show the
discrete value for two or more categorical
data. In this, rectangular bars are grouped by
position for levels of one categorical variable,
with the same colors showing the secondary
category level within each group. It can be
shown both vertically and horizontally.
• Observe the figure given below which shows
different types of bar graphs.
WHAT IS A HISTOGRAM?

• A frequency distribution shows how often

each different value in a set of data occurs.
• A histogram is the most commonly used graph
to show frequency distributions.
Use a histogram when:
• The data are numerical
• You want to see the shape of the data’s
distribution, especially when determining
whether the output of a process is distributed
approximately normally
• Analyzing whether a process can meet the
customer’s requirements
• Analyzing what the output from a supplier’s
process looks like
• Seeing whether a process change has
occurred from one time period to another
• Determining whether the outputs of two or
more processes are different
• You wish to communicate the distribution of
data quickly and easily to others
Check sheet
• A check sheet is a structured, prepared form
for collecting and analyzing data.
• This is a generic
data collection and analysis tool that can be
adapted for a wide variety of purposes and is
considered one of the
seven basic quality tools.
CHECK SHEET PROCEDURE
• Decide what event or problem will be
observed. Develop operational definitions.
• Decide when data will be collected and for
how long.
• Design the form.
• Set it up so that data can be recorded simply
by making check marks or X's or similar
symbols and so that data do not have to be
recopied for analysis.
• Label all spaces on the form.
• Test the check sheet for a short trial period to
be sure it collects the appropriate data and is
easy to use.
• Each time the targeted event or problem
occurs, record data on the check sheet.
Checklist
• A checklist is a type of job aid used to reduce
failure by compensating for potential limits
of human memory and attention.
• It helps to ensure consistency and
completeness in carrying out a task.
• A basic example is the "to do list".
• Checklists, Control Lists or Verification Lists
are formats designed to perform repetitive
activities
• To verify a list of requirements or to collect
data in an orderly and systematic manner.
• They are used to make systematic checks of
activities or products
• Ensuring that the worker or inspector does not
forget anything important.
The main uses of checklists are:
• Verification of the activities
development in which it is important not
to forget any step, or
• Where the tasks have to be done with an
established order.
• Doing inspections and record the points
which have been inspected.
• Obtain information to analyze where
the incidences and non-conformities
happen. Help to check the causes of
defects.
• Verification of the product
specifications.
• Collect data for further analysis.
Things that a checklist should include:

• Things that have to be controlled, measured or

verified.
• Conformity criteria and potential
nonconformities (what is right and what is
wrong).
• How often it has to be inspected: frequency of
the checking.
• Who does the tasks or the verifications.
• Procedures, specifications and rules that apply
in the checked activities.
Benchmarking: Concepts, Meaning, Benefits,
Elements, Reasons for benchmarking, Process
of benchmarking,
Benchmarking
• Benchmarking is defined “as the continuous,
systematic process of measuring ones output
and/or work processes against the toughest
competitors or those recognized best in the
industry.”
How Do You Measure Benchmarking
Measure Benchmarking

• Benchmarking involves carrying out a ‘super-

audit’ of a company’s end-to-end supply chain
from supplier to customer delivery
– Procurement
– Overview of supply chain management
– Management of inventory
– Manufacturing contribution to supply chain
– Distribution centre/warehouse management.
– Transportation – inbound and outbound.
– Customer service
– Supply chain costs
Lessons from Sports People
about Benchmarking

Roger Bannister was the first man in recorded

history to run a mile in under 4 minutes in April
1954.
Until that time no one had broken this barrier and
many claimed that it was not possible for man to
run that fast over this distance.
• However this turned out to be a glass ceiling
when he broke the record.
• Over the next 18 months his record was
broken 12 times!
• What made the difference?
• The glass ceiling was broken.
• A new benchmark had been set against which
to aim. “The end” had moved.
• The fastest man in the world over 100m is Usain Bolt.
• He is the benchmark.
• He is the best.
• To aspire to be the best what is the first thing that one
would need to know?
• Answer – the time, i.e. 9.58 seconds.
• If you aspire to your supply chain being the best, the first
thing that you need to know is – how good is the best?
What is the benchmark?
Concept of Benchmarking
• Benchmarking is an approach of setting goals
and measuring productivity based on best
industry practices.
• Benchmarking helps in improving
performance by learning from best practices
and the processes by which they are achieved.
Meaning & Definition of Benchmarking
• Dictionary defines a benchmark as “a standard
or a point of reference against which things
may be compared and by which something
can be measured or judged”.
• Benchmarking is defined “as the continuous,
systematic process of measuring ones output
and/or work processes against the toughest
competitors or those recognized best in the
industry.”
Benchmarking
• Benchmarking is an approach of setting goals
and measuring productivity based on best
industry practices.
• Benchmarking helps in improving
performance by learning from best practices
and the processes by which they are
achieved.
• It involves regularly comparing different
aspects of performance with the best practices,
• Identifying gaps and finding out novel
methods to not only reduce the gaps but to
improve the situations so that the gaps are
positive for the organization.
• Benchmarking is periodical exercise for
continuous improvement within the
organization so that the organization does not
lag behind in the dynamic business
environment.
Example
A customer support engineer of LG (a
television manufacturing company) attends a
call within forty-eight hours.
If the industry norm is that all calls are
attended within twenty-four hours, then the
twenty-four hours can be a benchmark.
Need of Benchmarking:
• Benchmarking helps organizations focus on
the external environment and improve
process efficiency.
• Benchmarking promotes a climate for change
by allowing employees to gain an
understanding of their performance what
they are achieving now and how they
compare to others in order that they become
aware of what they could achieve.
Benefits of Benchmarking
(a) It increases customer satisfaction.
(b) It leads to significant cost savings and
improvements in products and services.
(c) It helps in improving strategic planning by
providing assessment of strengths and
weaknesses of current process.
(d) It reduces waste and costs of poor quality.
(e) It helps in increased organizational
performance by initiating continuous
improvements in processes and quality.
(f) It reduces overheads through business
simplification.
(g) It helps in creating a culture that values a
sense of continuous improvement which has
a positive bearing on the functioning of
organization.
(h) It is a transmission of best practice
between divisions.
(i) It can assist in overcoming complacency
and drive organizational change.
(j) It helps in sharing the best practices
between different companies.
(k) It provides a way to monitor the conduct of
competitive strategy.
(l) It leads to greater involvement and
motivation of staff.
(m) It provides advance warning of
deteriorating competitive position.
(n) It helps in learning from others and builds
greater confidence in developing and applying
new approaches.
(o) It improves management understanding of
value adding processes of their business.
Elements of Benchmarking

1. Identifying the need for benchmarking and

planning
2. Clearly understanding existing business
processes
3. Identify best processes
4. Compare own processes and performance with
that of others
5. Prepare a report and implement the steps
necessary to close the performance gap
6. Evaluation
Process of benchmarking
Reasons for benchmarking
1. Defining Customer Requirements
2. Establishing Effective Goals and Objectives
3. Developing True Measures of Productivity
4. Becoming Competitive
5. Industry Best Practices to be Achieved
Reasons for benchmarking
1. Defining Customer Requirements:
It is not based on history or gut feeling, perception and low fit but on the basis of market reality,
objective evaluation and high conformance.
2. Establishing Effective Goals and Objectives:
It is not on the basis of lacking external focus, reactive response, and lagging industry but on the
basis of credibility, inarguable, proactive and leading industry goals and objectives.
3. Developing True Measures of Productivity:
Without benchmarking this may be done by pursuing pet projects, strengths and weaknesses not
understood on-route of least resistance. But with benchmarking this is carried out by solving
real problems and understanding outputs of each decision based on the best industry
practices.
4. Becoming Competitive:
This is not carried out on internally focused, evolutionary change, and low commitment. But it is
done on the basis of concrete understanding of competition, new ideas of proven practices,
technology and high commitment.
5. Industry Best Practices to be Achieved:
This is also not done on methods not invented here, few solutions, average of industry progress
and frantic catch up activity. But it is done on the basis of proactive search for change, many
options, business practice breakthrough and superior performance.
• https://www.businessmanagementideas.com/management/benchmarking/benchmarking/21308
Process of benchmarking
The process of benchmarking involves the following four
phases:
1. Planning:
(a) Identification of the factor to be benchmarked
(b) Identification of the critical performance indicators
(c) Identification of the entity that is the standard for
benchmarking
(d) Identification of the modalities for collection of data.
2. Analysis:
(a) Collection and collation of data to detect gaps
(b) Measurement of gaps in performance and practices
(c) Setting up of metric targets.
3. Integration:
(a) Corroboration of the modalities of analysis
and targets set among peers
(b) Development of implementation programs.
4. Action:
(a) Preparation and ‘sensitization’ of target
audience for implementation
(b) Deployment of monitoring and measuring
mechanism for deviations
(c) Final assessment of success of benchmarking
both quantitatively and qualitatively.
Benchmarking – Gap Analysis Process
Types of Benchmarking
• Product Benchmarking - Car, Mobile etc
• Process benchmarking – Employee training,
logistics
• Strategy benchmarking – Core competencies,
company philosophy
• Internal benchmarking – Between factories in
same branch, Between depts, Between working
groups
• External benchmarking - compares metrics
and/or practices of one organization to one or
many others.
FAILURE MODE AND EFFECTS ANALYSIS (FMEA)

• Begun in the 1940s by the U.S. military, failure

modes and effects analysis (FMEA) is a step-
by-step approach
• Identifying all possible failures in a design, a
manufacturing or assembly process, or a
product or service.
FMEA
• "Failure modes" means the ways, or modes,
in which something might fail.
• Failures are any errors or defects, especially
ones that affect the customer, and can be
potential or actual.
• "Effects analysis" refers to studying the
consequences of those failures.
• Failures are prioritized according to how
serious their consequences are, how
frequently they occur, and how easily they
can be detected.
• The purpose of the FMEA is to take actions to
eliminate or reduce failures, starting with the
highest-priority ones.
FMEA
• Failure modes and effects analysis also
documents current knowledge and actions
about the risks of failures, for use in
continuous improvement.
• FMEA is used during design to prevent
failures.
• Later it’s used for control, before and during
ongoing operation of the process.
• Ideally, FMEA begins during the earliest
conceptual stages of design and continues
throughout the life of the product or service.
ATM Example
• Quality Function Deployment (QFD) – House
of Quality, QFD Process, Benefits
Quality Function Deployment (QFD)
• Also called: matrix product planning,
decision matrices, customer-driven
engineering
• QFD is a focused methodology for carefully
listening to the voice of the customer and
then effectively responding to those needs
•
and expectations.
https://asq.org/quality-resources/qfd-quality-function-deployment
QFD METHODOLOGY

• In QFD, quality is a measure of customer

satisfaction with a product or a service.
• QFD is a structured method that uses the
seven management and planning tools to
identify and prioritize customers’
expectations quickly and effectively.
• Beginning with the initial matrix, commonly
termed the House of Quality
• the QFD methodology focuses on the most
important product or service attributes or
qualities.
• These are composed of customer wows,
wants, and musts.
• Once you have prioritized the attributes and
qualities, QFD deploys them to the
appropriate organizational function for action
• QFD is the deployment of customer-driven
qualities to the responsible functions of an
organization.
Benefits of QFD
1. A systematic way of obtaining information and
presenting it.
2. Shorter product development cycle.
3. Considerably reduced start-up costs.
4. Fewer engineering changes.
5. Reduced chance of overnights during design
process.
6. An environment of team work.
7. Consensus decision.
8. Everything is preserved in writing.
9. It facilitates identification of the causes of customer
complaints and makes it easier to takes prompt
remedical action.
10. It is a useful tool for improving product Quality.
11. It is a useful tool for competitive analysis of product
quality.
12. It is stabilizes quality.
13. It cuts down on rejects and rework at the production
site.
14. It decreases claims substantially.
15. Marketing benefits are obtained by identifying sales
point.
Taguchi Quality Loss Function
• https://www.leansixsigmadefinition.com/
glossary/taguchi-loss-function/
Taguchi Loss Function
• Developed by Genichi Taguchi, it is a graphical
representation of how an increase in
variation within specification limits leads to an
exponential increase in customer
dissatisfaction.
• The common thinking around specification
limits is that the customer is satisfied as long
as the variation stays within the specification
limits.
• If the variation exceeds the limits, then the
customer immediately feels dissatisfied.
• The specification limits divide satisfaction
from dissatisfaction.
• For example, if the lower limit is 10, and the
upper limit is 20, then a measurement of 19.9
will lead to customer satisfaction, while a
measurement of 20.1 will lead to customer
dissatisfaction.
• Developed by Genichi Taguchi, it is a graphical
representation of how an increase in variation
within specification limits leads to an
exponential increase in customer
dissatisfaction.
• The common thinking around specification
limits is that the customer is satisfied as long
as the variation stays within the specification
limit
Quality circle
• A quality circle or quality control circle is a
group of workers who do the same or similar
work,
• Who meet regularly to identify, analyze and
solve work-related problems.
• https://www.inc.com/encyclopedia/quality-circles.html
• Quality circles in Japan were part of a system
of relatively cooperative labor-management
relations
• Involving company unions and lifetime
employment guarantees for many full-time
permanent employees
• Consistent with this decentralized, enterprise-
oriented system
• Quality circles provided a means by which
production workers were encouraged to
participate in company matters
• By which management could benefit from
production workers' intimate knowledge of
the production process.
Requirements for QC Success
• Quality circles must be staffed entirely by
volunteers.
• Each participant should be representative of a
different functional activity.
• The problem to be addressed by the QC
should be chosen by the circle, not by
management, and the choice honored even if
it does not visibly lead to a management goal.
• Management must be supportive of the circle
and fund it appropriately even when requests
are trivial and the expenditure is difficult to
envision as helping toward real solutions.
• Circle members must receive appropriate
training in problem solving.
• The circle must choose its own leader from
within its own members.
• Management should appoint a manager as
the mentor of the team, charged with helping
members of the circle achieve their objectives;
but this person must not manage the QC.
Objectives of Quality Circles:

• To improve quality, productivity, safety and

cost reduction
• To give chance to the employees to use their
wisdom and creativity.
• To encourage team spirit, cohesive culture
among different levels and sections of the
employees.
• To promote self and mutual development
including leadership quality,
• To fulfill the self-esteem and motivational
needs of employees.
• To improve the quality of work-life of
employees.
Benefits of Quality Circles
• Internal leadership
• Reinforce worker morale and
motivation
• Encourage a strong sense of
teamwork in an organization
• Higher quality
• Improved productivity
• Greater upward flow of information
• Broader improved worker attitudes
• Job enrichment
Steps for Setting up Quality Circles:

(i) First of all Managers, Supervisors and Foremen must

be made to understand the concepts and activities of
Q.C.
(ii) Management’s total support and commitment should
be made known to everyone in the organisation.
(iii) Steering committee is formed with the top
management personnel to give direction to Quality
Circle activities.
(iv) A facilitator (or sometimes known as promoter) is
selected from the senior manage­ment level, who will
serve as coordinator and advisor to the circle.
(v) Supervisor and foreman are then trained to act
as Q.C. leaders.
(vi) Members of each circle must be selected from
the persons who are doing similar type of work
or belong to the same department or section.
(vii) Membership to the circle is voluntary.
(viii) First few meetings of the circle are held with
a view to train them.
(ix) To start with, only one to two circles should
be formed in an organisation, and
(x) Increase the number gradually as more and
more experience is gained.
(x) Meetings must be held regularly, may be
once in a week initially and once in a month
on completion of basic training of members.
(xi) Everyone’s suggestion or problem matching
with the circle’s objectives is discussed.
(xii) Total participation of team members must
be encouraged.
(xiii) Recommendations of the circle must be
considered and decisions should be taken
without delay.
• Total Productive Maintenance (TPM) –
Concept and need.
WHAT IS TPM?

• TPM (Total Productive Maintenance) is a

holistic approach to equipment
maintenance that strives to achieve
perfect production:
– No Breakdowns
– No Small Stops or Slow Running
– No Defects
– No Accidents
Need of TPM
• TPM emphasizes proactive and preventative
maintenance to maximize the operational
efficiency of equipment.
• It blurs the distinction between the roles of
production and maintenance by placing a
strong emphasis on empowering operators to
help maintain their equipment.
• The implementation of a TPM program
creates a shared responsibility for equipment
that encourages greater involvement by plant
floor workers.
• In the right environment this can be very
effective in improving productivity (increasing
up time, reducing cycle times, and eliminating
defects).
The Eight TPM Pillars
The traditional TPM model consists of a 5S foundation
(Sort, Set in Order, Shine, Standardize, and Sustain) and eight
supporting pillars.

• Sort: eliminate anything that is not truly

needed in the work area
• Straighten: organize the remaining items
• Shine: clean and inspect the work area
• Standardize: create standards for performing
the above three activities
• Sustain: ensure the standards are regularly
applied
Type of productivity loss.
Step-by-step TPM Implementation
1. Step One – Identify Pilot Area
2. Step Two – Restore Equipment to Prime
Operating Condition
3. Step Three – Start Measuring OEE
(OEE- Overall Equipment Effectiveness.)
4. Step Four – Address Major Losses
5. Step Five – Introduce Proactive Maintenance
Techniques
TPM Benefits
• Increased equipment productivity
• Reduced equipment downtime
• Increased plant capacity
• Lower maintenance and production loss
• Approaching zero equipment-caused defects
• Enhanced job satisfaction
• Increased Return On Investment