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TOTAL
QUALITY
MANAGEMENT
A GUIDE FOR IMPLEMENTATION
U.S. Environmental Protection Agency
Region 5, Library (PL-12J)
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urcm*/io/o»
REPRODUCED BY
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INFORMATION SERVICE
SPRINGFIELD, VA 22161
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REPORT DOCUMENTATION * "»°*T "°- «
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4. TVtoM* uMttto
Total Quality Management
A Guide for Implementation
7. AuMwrtt)
Dr. Richard A, SMmsnn
Emhart A.T.I.
12001 Sunrise Valley Dr.
Reston, VA 22091
U. S|i«m»rlii» Orfimtntitit Nwm and AMraM
U.S. Office of Personnel Management
Training Management Assistance Branch- OEED-CEED
P.O. Box 7230 '
Washington, DC 20044
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This guide provides information to facilitate Total Quality Management (TQM)
implementation. TQM is a managed process of continuous improvement. It calls for
cultural change in organization through instituting a broader vision of management
encompassing improvement of every process critical to organizational success.
This improved performance is directed toward satisfying such cross^-functional
goals as quality, cost, feheduie, and technical performance. TQM integrates fundamental
management techniques, existing improvement efforts, and technical tools under a disciplined
approach focused on continuous process improvement. The activities focus on providing
customer/users with products and services that consistently meet their needs "and expecta-
ions.
Each TQM element is institutionalized by implementing a structured approach to
continuous process improvement through training at each level, starting with top manage-
ment.
Essential TQM elements include: obtaining management commitment; establishing
a steering group and/or focal poinr to provide direction and control of the improvement
activities; and providing training of personnel. ~"
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TABLE OF CONTENTS
Page
Total Quality Management Strategy 1
Presents a survey of fundamental concepts.
Total Quality Management Model 13
Presents a seven-step model for continuous process improvement.
The critical role of management is emphasized.
Tools and Techniques of Total Quality Management 45
Presents a survey of tools which are used to implement TQM. The
use of a tool(s) depends on the circumstance.
DoD TQM in Systems Acquisitions 61
Presents a survey of DoD initiatives which closely relate to TQM.
Some of these initiatives are not entirely compatible with the
TQM philosophy.
Additional Information 77
Presents a list of suggested readings.
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Blank page
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NOTICE
THIS DOCUMENT HAS BEEN REPRODUCED FROM
THE BEST COPY FURNISHED US BY THE SPONSORING
AGENCY. ALTHOUGH IT IS RECOGNIZED THAT CER-
TAIN PORTIONS ARE ILLEGIBLE, IT IS BEING RE-
LEASED IN THE INTEREST OF MAKING AVAILABLE
AS MUCH INFORMATION AS POSSIBLE.
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Total Quality Management Strategy
TOTAL
QUALITY
MANAGEMENT
STRATEGY
Doing the right thing, right the first time on time, all the time;
always striving for improvement, and
always satisfying the customer.
Definition
Total Quality Management (TQM) consists of continuous process improvement
activities involving everyone in an organization-managers and workers-in a
totally integrated effort toward improving performance at every level. This im-
proved performance is directed toward satisfying such cross-functional goals as
quality, cost, schedule, mission need, and suitability. TQM integrates fundamen-
tal management techniques, existing improvement efforts, and technical tools
under a disciplined approach focused on continuous process improvement. The
activities are ultimately focused on increased customer/user satisfaction.
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Total Quality Management
Pursue New Strategic Thinking
The TQM philosophy provides a comprehensive way to improve quality by
examining the way work gets done in a systematic, integrated, consistent, organi-
zation-wide perspective.
The focus is to:
Emphasize continuous improvement of processes, not compliance to
standards
Motivate to improve from within, rather than wait for complaints/demands
from users
Involve all functions, not just the quality organization
Motivate and involve employees to become the driving force for
improvements
Satisfy the customer, not merely conform to requirements
Use guides and target values as goals to improve on, not standards to
conform
Use modern process control techniques
Understand the effects of variation on processes and their implications for
process improvement.
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Total Quality Management Strategy
Providing customers/users with products and services that
consistently meet their needs and expectations.
Know Your Customers
User satisfaction is the ultimate requirement to which everyone must strive
whether the user is an internal customer or an external customer. The only way
the user can ultimately be satisfied is if the product or service meets the user's
need or intended use at a reasonable cost.
The ultimate users are the officers and servicemen in the field. They require
products and services that satisfy their expectations for technical performance
(including logistic support), schedule (available when needed), and cost (within
budget).
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Total Quality Management
Quality is conformance to a set of customer requirements that,
if met, result in a product that is
fit for its intended use.
Set True Customer Requirements
Knowledge of the user's needs and expectations (internal and external) is a pre-
requisite to satisfying them. It is critical that these requirements be understood
and reflected accurately in specifications for products, services, and processes.
The manufacturing oriented definition of quality, "conformance to requirements,"
only leads to user satisfaction when there is alignment between user expectations
and user requirements.
For example, meeting procurement specifications becomes a concern to be pur-
sued only after the user's requirements have been defined. Quality products and
services result from processes that meet user requirements. Thus, in procurement,
conformance to Government or industry specifications will result in quality
products only when those specifications properly identify user requirements. If
they do not, blind adherence to specifications can easily become counterproduc-
tive.
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Total Quality Management Strategy
A manager who fails to provide resources and time for prevention
activities is practicing false economy.
Concentrate on Prevention, Not Correction
QUALITY
PREVENTION HAS MORE LEVERAGE WHEN IMPROVING QUALITY
The quality payoff is maximized when considered during early phases of develop-
ing a product or service. It is then that many problems can be prevented. There-
after, the leverage of prevention is reduced as correction of problems-a more
costly procedure-becomes the dominant mode. A key aspect of this concept is de-
signing products and services that can be produced with high-yield within the ca-
pability of the manufacturing or service process. Designs that are immune to
manufacturing and operational use variability are said to be robust.
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Total Quality Management
Reduce Chronic Waste
$
MATERIAL
SCRAP
EXCESS INVENTORY
INSPECTION
EQUIPMENT
TEST EQUIPMENT
POOR MACHINE
UTILIZATION
ENERGY
LOST OR MISPLACED
MATERIAL
OVER AND UNDER
SPECIFICATIONS
EXCESSIVE
EQUIPMENT
,. -T-"
CUMULATIVE
PEOPLES TIME
REWORK
INSPECTION
CHECKING
CLARIFYING
PRODUCING WASTE
OR POOR QUALITY
INEFFICIENT
MEETINGS
LOST SALES
POOR QUALITY
PRODUCTS/
SERVICES
NOT RESPONSIVE
TO CUSTOMERS
NEEDS
POOR CUSTOMER
SERVICE
POOR ENGINEERING
CAPITAL
INVESTMENTS
WARRANTY COST
LIABILITY COST
IDLE EQUIPMENT
DEPRECIATION
Experts estimate that the cost of waste in many large organizations is significant.
Whatever the exact numbers are, they illustrate the extraordinary opportunity for
reducing costs through improvement of quality. Much of the high cost of poor
quality comes from processes that are allowed to be wasteful. This waste is often
chronic and is accepted as the normal cost of doing business. The conventional
approach to quality is not to get rid of chronic waste but to prevent things from
getting worse by "putting out the fires." Chronic waste of time, material, and
other resources can be driven down by implementing continuous process im-
provement.
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Total Quality Management Strategy
Pursue Continuous Improvement Strategy
NEW STANDARD
KAIZEN
TIME
Breakthroughs arc essential for improvement, but continuous incremental im-
provement is the key to quality leadership. True breakthroughs are hard to pre-
dict. While waiting for a breakthrough to arrive, a company's level of perfor-
mance often declines because of a lack of sustained attention. The Japanese place
a high priority on continuous incremental improvements (called Kaizen) that,
over time, leapfrog the competitors who are depending on the "Hail Mary touch-
down pass." Workers, supported by managers, are a major source of these im-
provements. Taken together, infrequent innovations and continuous improvement
result in superior productivity gains.
Applying Kaizen to routine work is the key to success. Working on special
projects is important, but in the long run, it is the day-to-day application of
Kaizen to routine work that gets results.
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Total Quality Management
Use Structured Methodology for Process Improvement
\
Structured problem-solving methodologies can help to identify opportunities for
improvement. Every work activity (also called work function or work process)
has inputs and outputs. Critical points in the process can be selected, and meas-
urements can be taken at the input, at the output, and within the process.
These measurements help identify the most serious problems to be resolved.
Tools such as histograms and Pareto diagrams help to determine the most likely
cause of the problems leading to waste. Techniques such as brainstorming,
experimentation, or cause-and-effect analysis arc used to develop alternatives and
arrive at solutions. Finally, corrective action is taken to resolve the problems and
improve a process. This cycle is repeated indefinitely, resulting in a continuous
quality improvement process.
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Total Quality Management Strategy
Reduce Variation - an Applied Example of
Continuous Improvement
UPPER
SPEC LIMIT
UPPER
CONTROL
LIMIT
LOWER
CONTROL
LIMIT
LOWER
SPEC LIMIT
Statistical tools are valuable for applying the continuous improvement philoso-
phy. An example is variation reduction. Ideally, all products should be built to
nominal dimensions. Unfortunately, this is not realistic; therefore, tolerances
come with each nominal. However, variations in parameters do contribute to
higher costs of quality and lower reliability. The latter is often due to the effect of
the "stacking of tolerances." While the variation cannot be eliminated, it can be
significantly reduced by identifying and removing the causes of variation,
whether they come from the design of the project or service or the production
process.
For example, the effects of manufacturing variation can be minimized by appro-
priate design choices. Such a design is said to be a robust design because it has
been desensitized to manufacturing variation.
People often think that 99 percent quality is good enough. However, at this
level, there would be 5,000 incorrect surgical operations per week and 2 short
or long landings at most major airports each day-not an encouraging prospect for
anyone who flies or requires surgery.
Some think that the often-used criterion of 3 sigma variation (99.73%) is good
enough. Even at this level, one would only expect 1 good unit out of every 15
units for a product composed of 1,000 parts.
(Continued on the next page)
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Total Quality Management
That is why the traditional use of setting quality levels at the "percent defective'
level is now changed to measuring quality as parts per million. This is being
achieved in progressive companies by:
Setting parts per million tolerances on all critical product and process
parameters to improve process capability.
Using stable technologies in new design.
Minimizing the total number of parts in the product and steps in all proc-
esses.
Standardizing the parts and processes.
Using statistical process control (SPC) and computer-assisted design and
manufacturing process such as CAD/CAE/CAM.
Involving suppliers in all of the above activities.
10
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Total Quality Management Strategy
Use a Balanced Approach
en «
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TECHNICAL APPROACHES
-> PEOPLE APPROACHES
The TQM philosophy emphasizes the importance of people in the total process.
Considerations such as culture, incentives, teamwork, training, and work involve-
ment are typical. The optimum effectiveness of TQM results from an appropriate
mix of the social and technical systems. It is common practice to emphasize the
technical aspects of improvement-new machine tools, computers-with less em-
phasis on the people and their role in the process.
Improving quality and productivity to achieve competitiveness re-emphasizes the
need for an enterprise to capture the potential inherent in their workforce by
enabling each employee to do his or her job right the first time. This requires that
top management demonstrate to all employees that they are personally committed
and continuously pursue efforts to ever-improve quality.
The organization must provide an environment in which all employees will vol-
untarily cooperate to achieve the organizational objectives. This requires that
management accept the idea that employees can and want to contribute. Manage-
ment thus flows ideas and goals down and encourages the flow of ideas up.
Employees will expend the necessary effort if they perceive that their perform-
ance will lead to desired rewards. Rewards are both extrinsic (salary, bonuses, and
work security) and intrinsic (meaningful work, responsibility for outcomes, and
feedback on the results of work activities).
11
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Total Quality Management
Employees model their behavior by how management acts. Management must
demonstrate by their actions that quality is extremely important and support
employee involvement in quality improvement efforts.
Group activities are an effective way to tap the human resource to achieve quality
improvement. Employees gain pride in their work and develop a personal stake in
the achievement of excellence in quality and productivity.
Group activities are also an effective way to manage the interface between func-
tional disciplines. In group activities, the integration of design, quality/reliability,
and production is an effective way to achieve the synergy necessary for quality
excellence. Various names have been given to the team approach like simultane-
ous engineering and concurrent design. These teams can range from 4 mem-
bers to 20 members and can have representation from every function in the or-
ganization.
12
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Total Quality Management Model
TOTAL QUALITY
MANAGEMENT MODEL
A Model for Continuous Improvement
TQM is a focused management philosophy for providing the leadership, training,
and motivation to continuously improve an organization's management and
operations. What distinguishes TQM from other improvement strategies is its un-
flagging dedication to:
Training
Recognition of quality as the presence of value, rather than absence of defects.
Management commitment and involvement
A working environment where all employees seek continuous improvement
Customer satisfaction (internal and external)
Quality awareness throughout the organization
Long-term commitment to continuous improvement
Focus on prevention rather than inspection
Organizational discipline to practice the new behaviors day after day, forever
Rigorous analysis of management systems and processes
Cross-functional orientation and teamwork
Elimination of non-value-added activity and reduction of cycle time
Involvement of all employees
Focus on the product/service and the process.
This guide provides a seven-step sequential model that will lead to continuous
performance improvement. Subsequent pages provide information on using each
of these steps.
13
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Total Quality Management
Typical Performance Improvement Model
STEP 1 ESTABLISH THE TQM
MANAGEMENT AND CULTURAL
ENVIRONMENT
VISION
LONG-TERM COMMITMENT
PEOPLE INVOLVEMENT
DISCIPLINED METHODOLOGY
SUPPORT SYSTEMS
TRAINING
Implementation of the continuous improvement process lends itself
nicely to the seven-step sequence defined in the model. Each step
involves a series of well defined, straightforward tasks which lead
directly into the actions required in the subsequent steps. Since the
improvement process is to be continuous, the procedure may be
repeated as desired.
STEP 2 DEFINE MISSION OF
EACH COMPONENT OF THE
ORGANIZATION
STEP 3 SET
PERFORMANCE IMPROVEMENT
OPPORTUNITIES, GOALS
AND PRIORITIES
STEP 4 ESTABLISH
IMPROVEMENT PROJECTS
AND ACTION PLANS
STEPS IMPLEMENT
PROJECTS USING
IMPROVEMENT METHODOLOGIES
STEP 6 EVALUATE
STEP 7 REVIEW
AND RECYCLE
14
IMPROVED PERFORMANCE
CYCLE TIME
LOWER COST
INNOVATION
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Total Quality Management Model
100
%OF
EFFORT
STEP1
(CULTURE)
STEPS 2-7
(EXECUTION)
TIME
Step 1: Establish the Management and Cultural
Environment
Top Management Actions and Responsibilities
Vision
Long-Term Commitment
People Involvement
Disciplined Methodology
Support Systems
Training
The TQM process is a total organizational approach toward continuous im-
provement of products and services. TQM requires management to exercise
the leadership to establish the conditions for the process to flourish.
Management must create a new, more flexible environment and culture which
will encourage and accept change. The new culture is developed and operated
so that all the people, working together, can maximize their contribution as in-
dividuals to the organization's objective of excellence.
Management must accept the up-front cost and the prolonged gestation period
before the new systems become alive and productive.
15
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Total Quality Management
Examples of Cultural Changes Required
CATEGORY
Mission
Customer
Requirements
Suppliers
Objectives
Improvement
Problem-Solving
Jobs and People
Management Style
Role of manager
Rewards and recognition
Measurement
PREVIOUS STATE
Maximum return on
investment/management
by objectives (ROI/MBO)
Incomplete or ambiguous
understanding of
customer requirements
Unidirectional relationship
Orientation to short-
term objectives and actions
with limited long-term
perspective
Acceptance of process
variability and subsequent
corrective action
as the norm
Unstructured individual-
istic problem-solving and
decision-making
Functional, narrow scope
management-controlled
Management style with
uncertain objectives that
instills fear of failure
Plan, organize, assign,
control, and enforce
Pay by job. Few team
incentives
Orientation toward data
gathering for problem
identification
NEW CULTURE
Ethical behavior and
customer satisfaction.
Climate for continuous
improvement. ROI a
performance measure.
Use of a systematic
approach to seek out,
understand, and satisfy
both internal and external
customer requirements.
Partnership
Deliberate balance
of long-term goals
with successive short-
term objectives
Understanding and
continually improving
the process.
Predominantly partici-
pative and interdisciplinary
problem-solving and
decision-making based on
substantive data
Management and employee
involvement; work teams;
integrated functions
Open style with
clear and consistent
objectives, which
encourages group-derived
continuous improvement
Communicate, consult,
delegate, coach, mentor,
remove barriers, and
establish trust
Individual and group recognition
and rewards, negotiated
en ten a.
Data used to understand
and continuously improve
processes.
16
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Total Quality Management Model
Vision
Provide the vision for what the organization wants to be and where it wants to
go.
Guidance:
The organization needs to know of its current position before it determines where
it wants to go. Benchmarking is a tool that will:
Construct a picture of the way key processes are performing with respect
to quality, productivity, and workforce involvement
Determine strengths and weaknesses
Set the course for the future, and
Provide a baseline for measuring progress
The annual Malcom Baldrige Award, and the criteria used to evalute an organi-
zation's performance on which it is based, may be used as one set of yardsticks to
measure the validity and the impact of your continuous improvement effort.
Companies with a Vision
fHti niKMnKNT OV THK UNITOU SUITES
THttlUUHTMtlDEnUCIMEhrrGPCOMMEIICBAKNUUtUiS
THE FOOT ANNUAL
MALCOLM BALDKEGE
NATIONAL
QUALITY AWARn
The matrix on the next page provides a benchmarking guide.
This matrix or one of your own can be used to assess the progress of your
organization in implementing TQM.
17
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Total Quality Management
Benchmarking Matrix
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Total Quality Management Model
Long-Term Commitment
Demonstrate a long-term commitment to implement improvement, even when
improvement may be difficult or perceived to have high front-end costs.
Guidance:
Commitment entails more than new policies, directives, letters, and speeches.
The workforce judges commitment of top management by the behaviors they ex-
hibit. Management must provide the leadership to:
Maintain a long-term perspective in the face of short-term pressures
Realize that some results will be immediate, but others will take
4 to 7 years of commitment to achieve in support of a never-ending
improvement process
Fund and staff to support TQM training and implementation
Institute compensation and/or recognition programs based on
TQM-based goals
Encourage employee involvement
Promote timely training
Foster activity in quality issues
Reward expected behavior.
19
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Total Quality Management
People Involvement
Actively involve all people in the improvement process; encourage and em-
power people to create ideas and make decisions within their area of
expertise-not <^nly to do the work, but also to improve the system.
Guidance:
The ultimate objective is to empower the workforce to exercise self-direction
while continuously pursuing improvement strategies in routine work as well as on
special projects. This objective cannot be accomplished overnight but can be im-
plemented over time according to a phased process that considers the existing
organization structure and philosophy, information flow, and the reward structure.
The three stages are:
traditional
participation
involvement.
The matrix on the next page provides a basis for understanding the continuum from
participation to involvement. The critical element is the degree of decision power.
20
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Total Quality Management Model
Stages of People Involvement
TRADITIONAL
PARTICIPATION
INVOLVEMENT
ORGANIZATIONAL
STRUCTURE
TYPICAL
IMPROVEMENT
EFFORTS
DECISION
POWER
GAINSHARING
MANAGEMENT
FOCUS
HIERARCHICAL
SUGGESTION
PROGRAM
WORK MEASUREMENT
QUALITY CIRCLES
TOP DOWN
APPROVED
SUGGESTIONS
INDIVIDUAL WORK
PERFORMANCE
SUPERVISING
HIERARCHICAL
AND AD HOC
TEAMS
AD HOC TEAMS
WORK ON
PROBLEMS
RECOMMEND
CHANGES
LIMITED
TEAM-BASED
DECISION-MAKING
SOME TEAM/UNIT
PARTICIPATION
AND RECOGNITION
COACHING
CUSTOMER-
FOCUSED.
AUTONOMOUS
WORK TEAMS
TEAMS
CONSISTENTLY
ANALYZE AND
IMPROVE
PROCESSES
MAKE PROCESS-
RELATED DECISIONS
INPUT INTO
STRATEGIC
DECISIONS
TEAM
RECOGNITION
e.g.. GAINSHARING
CREATING
ENVIRONMENT
FOR TEAMWORK
21
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Total Quality Management
Disciplined Methodology
Use a disciplined approach involving the appropriate tools to achieve
continuous improvement. Persistent, disciplined application of continu-
ous improvement methodology is a must.
Persistence Pays
ANALYZE
PROCESSES
AND SYSTEMS
-*
REMOVE WASTE
SIMPLIFY PROCESSES
SOLVE PROBLEMS
-*
' USE STABLE
PROCESSES
KNOW CAPABILITY
IN CONTROL
-*>
IMPROVE
SYSTEMS AND
PROCESS
Guidance:
Knowing what TQM is all about and knowing what tools and techniques
are availabile are necessary for success, but not sufficient for achieving it.
Having the discipline to work on TQM day after day so it becomes a new
way of life is the key factor for success.
A disciplined approach seems deceptively simple to achieve, but it is ex-
ceedingly difficult to execute. For example, most people know that
personal fitness can be maintained by proper earing habits and exercise,
but they cannot maintain the discipline required for well-being in their
daily lives even though their lives are at stake. Rather, people try various
fads and "quick fixes" unfortunately in cycles that leave them in worse
shape than before.
22
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Total Quality Management Model
Organizations exhibit the same type of behavior. Various fads and programs are
tried that may show early success but, ultimately, result in failure and a growing
cynicism about future efforts.
There is no substitute for the day-to-day discipline and tools of continuous im-
provement needed to reinforce TQM.
You will know you lack discipline when:
Any part of the process begins to lag or become delinquent
Operating systems remain unchanged
Authority and responsibility structure remains unaltered
Assumptions concerning the role of people are not challenged
Little consistency or continuity of purpose is exhibited toward
seeking more efficient ways to meet and exceed customer needs
Day-to-day behaviors remain unchanged.
Don't institute a new behavior that can't be
maintained and improved forever!
23
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Total Quality Management
Support Systems
Ensure that an adequate supporting structure is in place.
Guidance:
A proven approach to implementation is to begin the improvement process with
senior management and subsequently cascade the goals, values, structure, and
training established and adopted at upper levels to succeeding levels. Each level
is linked to the other by the common objective of making people capable of joint
performance.
Initially, it is helpful to establish an executive-level steering group and TQM sup-
port structure for the overall effort. Eventually, as the TQM philosophy becomes
a natural behavior exhibited in routine work, special support structures can be
modified and blended into the organization.
The steering group will serve to:
Identify and find out what customers need
Develop the vision for the organization and establish the initial goals to
achieve
Identify the critical processes that need priority attention
Establish TQM boards or equivalent at lower levels to focus on functional and
cross-functional improvement efforts and to provide management of the
TQM process as established by the executive level
Identify and provide resources necessary to implement TQM
Provide review and oversight of progress
Take action on unresolved process problems and issues referred to them by
the TQM boards
Identify and improve macro processes that are "owned" at the top
management level.
(Continued on the next page)
24
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Total Quality Management Model
The TQM boards will serve to:
Conduct process analyses
Target specific processes that need improvement
Establish performance improvement teams composed of employees with
representative skills and functions to work the specific process(es)
Assign and train facilitators to aid performance improvement teams in their
activities
Establish, follow-up, and maintain a schedule.
The TQM boards are relatively permanent, while the performance improvement
teams are more problem and process oriented. TQM boards "own" the processes
they seek to improve.
A model of the top-to-bottom support structure and a model for getting started are provided on
the following pages.
25
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Total Quality Management
TQM Supports the Manager as a Link Pin to Tie the Organization
Together in the Pursuit of Excellence
An Example of a Support Model
EXECUTIVE
MIDDLE
VISION
COMMITMENT
STRATEGIC GOALS
STEERING GROUP
CRITICAL PROCESSES
ROLE MODELING
MISSION
IMPROVEMENT GOALS
TOM BOARD
PROCESS IMPROVEMENT
PRIORITIZE IMPROVEMENT
OPPORTUNITIES
IMPROVEMENT GOALS
SKILL ENHANCEMENT
PROCESS IMPROVEMENT
IMPROVEMENT TEAMS
PROBLEM-SOLVING
OPERATING
26
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Total Quality Management Model
The Process of Getting Started
(Steps up the ladder to TQM)
AWARENESS
VISION
EDUCATION
CRITICAL
PROCESSES
TOOLS AND
APPLICATION
IMPLEMENTATION
COMMITMENT
PROCESS IMPROVEMENT
INSTITUTE CHANGE
RECOGNIZE ACCOMPLISHMENT
DEVELOP SUPPORT
STRUCTURE
- EXECUTIVE STEERING GROUP
- TQM BOARDS
DETERMINE PROCESS
CAPABILITIES
PROVIDE RESOURCES
PROVIDE TRAINING
ESTABLISH PERFORMANCE
IMPROVEMENT TEAMS
27
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Total Quality Management
Training
Make all employees aware of the need for and the benefits of TQM, and train
them in the use of tools and techniques to support continuous improvement.
Scope and intensity of training will depend on such factors as organization
level, nature of work, and specific processes under review for improvement.
Guidance:
Typical Tools: *
Benchmarking Cause and Effect Diagrams
Concurrent Engineering Cost of Quality
Design of Experiments Input/Output Analysis
Team Building Nominal Group Technique
Quality Function Deployment Statistical Process Control
Time Management Work Row Analysis
Quality Loss Function
* See Tools and Techniques section for definitions
Training should be tailored to support the vision and goals set by top
management
Common mistakes are to:
Conduct mass training before support systems for TQM have been set up
Overemphasize the technical tools at the expense of leadership and
management issues
Oversimplify and underestimate the difficulty of transitioning the
commercial application of TQM to the defense environment
Apply the tools before the needs are determined
28
-------
Total Quality Management Model
Step 2: Define the Mission
Model Showing feedback loops between the operating group and
its customers and suppliers
INPUT
OPERATING
ORGANIZATION
OUTPUT
REQUIREMENTS AND FEEDBACK REQUIREMENTS AND FEEDBACK
Everyone has a customer (internal and external), and TQM concentrates on
providing customers with services and products that consistently meet their
needs and expectations.
Every member of the organization must know the purpose of his job, his
customers), and his relation to others in the organization for providing cus-
tomer satisfaction.
Everyone must know his customer's requirements. Everyone must also make
his suppliers aware of those, and other requirements. Be aware that customers
and suppliers can be anything from another organization to a co-worker.
(Continued on the next page)
29
-------
Total Quality Management
The mission of each element of an organization must reflect a perspective that,
when combined with other elements of the organization, will provide the synergy
that produces TQM.
Follow these steps to define your mission:
Identify the customer(s) you serve (do not forget internal customers)
Identify the requirements of your customers).
Identify the processes used to satisfy the requirement.
Identify the products or services you provide to meet these requirements.
Develop measures of your output that reflect customer requirements
Review the preceding steps with your customer and adjust them as necessary.
Identify your principal inputs (labor, materials, products, services, etc.).
Involve your suppliers in the development of your requirements and their
conformance to them.
Finally, define your mission with respect to the steps above. If the result
does not match your current job description, your job description needs to be
changed to reflect your mission. You also need to check policies,
procedures, work instructions, and other documents that influence your job.
30
-------
Total Quality Management Model
Step 3: Set Performance Improvement Goals
Improved performance requires improvement goals. Both involve change.
SIGNIFICANTLY IMPROVED PERFORMANCE
REQUIRES SIGNIFICANTLY CHANGED SYSTEM
REQUIRES IMPROVEMENT GOALS
Steps 1 and 2 determined where the organization wants to go, how it is now
performing, and what role each member will play in achieving organizational
performance. Step 3 sets the goals for performance improvement. These goals
must reflect an understanding of the process capabilities of the organization so
that realistic goals can be set
The goals should first be set at the senior-management level. They should
reflect strategic choices about the critical processes in which success is essen-
tial to organizational survival.
The above steps are driven by providing value to the customer (internal and/or
external).
Middle and line management set both functional and process improvement
goals to achieve the strategic goals set by senior management. The hierarchy
of goals establishes an architecture that links improvement efforts across the
boundaries of the functional organization. Within functional organizations,
performance improvement teams provide cross-functional orientation, and the
employees on these teams become involved in process issues. Thus, the entire
organization is effectively interlinked to form an ideal performance improve-
ment setting.
31
-------
Total Quality Management
Step 4: Establish Improvement Projects and
Action Plans
The initial direction and the initial goals set for continuous improvement teams
flow down from and are determined by top management.
STEERING GROUP
TQM BOARD
PERFORMANCE IMPROVEMENT TEAMS
SENIOR MANAGEMENT (CROSS-FUNCTIONAL)
MIDDLE MANAGEMENT (CROSS-FUNCTIONAL)
INTERNAL AND CROSS-FUNCTIONAL TEAMS
Role of Steering Group
Develop philosophy, constancy of purpose, and guiding principles
Focus on critical processes that affect customer satisfaction and/or
major cost waste
Identify a TQM board as an "owner" of each critical process.
Resolve organizational and functional barriers
Provide resources, training, and rewards
Establish criteria for measuring outputs/customer requirements
Role of TQM Board
Conduct system and process analysis
Select performance improvement teams
Train teams
Develop improvement plans
Track progress and provide help if necessary
Train and provide facilitators to support performance improvement teams
Characterize the capability of the process and continuously improve it
Apply a structured performance improvement methodology as described in
Step 5 on the next page
Role of Performance Improvement Teams
Apply a structured performance improvement methodology as described in
Step 5 on the next page
32
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Total Quality Management Model
Step 5: Implement Projects with Performance
Tools and Methodologies
Basic Performance Improvement Cycle
SUPPLIER
^ s
5.1
PROCESS
5.6
IMPROVE
5.2
ESTABUSH
MEASURES
V X
CUSTOMER
ASSESS
v s
33
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Total Quality Management
5.1 Define Process, Identify Customer and Supplier
Requirements
Typical Flow Diagram (Input-Output)
SUPPLIER
Process A
I R
ProcM* B
Proem* C
CUSTOMER
Suggested Approach to Analyzing a Customer Requirement
OBJECTIVES
KEY
ACTIVITIES
TOOLS/
APPROACHES
Understand the
process and what
is required
of it
Identify the
process owner.
Identify the role
of process
members.
Define process boundaries,
outputs and customers,
inputs and suppliers,
and major processes and
flows.
Identify process owner and
process members.
Define customer
and supplier
requirements.
Identify to customers
changes to requirements
which promote perfor-
mance improvement
Nominal Group Technique (NGT)
Block Diagram/Flow Diagram
Input/Output Analysis
Benchmarking
Acquisition Streamlining '
Could Cost *
Quality Function Deployment
' DoD Acquisition Initiatives
34
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Total Quality Management Model
5.2 Develop and Establish Measures
AH components of the process are subject to measurement
MEASUREMENTS
INPUT
OUTPUT
OBJECTIVES
KEY
ACTIVITIES
TOOLS/
APPROACHES
Determine measurements
needed to understand
and improve the process.
Determine how to
measure performance
with respect to
customer requirements.
Determine additional
data to manage the
process.
Establish regular
feedback with customers
and suppliers.
Measure quality/cost^
timeliness of inputs.
Measure quality/cost/
timeliness of output
Nominal Group Technique (NGT)
Design to Production *
Transition Templates
Quality Function
Deployment
Statistical Methods
DoD Acquisition Initiative
35
-------
Total Quality Management
5.3 Assess Conformance to Customer Needs
The variations can be plotted, analyzed and minimized
i i i i i i i i i
OBJECTIVES
KEY
ACTIVITIES
TOOLS/
APPROACHES
Assess both
customer and
supplier
requirements.
Separate special
causes from common
causes.
Collect and review data
on the process.
Identify and remove
special causes of
variation.
Identify common
problem areas.
Statistical Methods
Inspection
User Feedback
(CP) 2 '
Exemplary Facilities
R&M2000 '
* OoO Acquisition Initiatives
36
-------
Total Quality Management Model
5. 4 Analyze Improvement Opportunities
Typical "fishbone" presentation of the major and minor causes
of a problem
OBJECTIVES
KEY
ACTIVITIES
TOOLS/
APPROACHES
Analyze process
improvement
opportunities.
Eliminate non-value
added steps and
simplify.
Gather data.
Identify potential
process improvement
areas.
Document
Nominal Group
Technique (NGT)
Cause and Effect
Analysis
Work Flow Analysis
Input/Output
Analysis
Statistical Methods
37
-------
Total Quality Management
5.5 Identify and Rank Improvement Opportunities
A Pareto chart used to help set priorities for improvement actions
OBJECTIVES
KEY
ACTIVITIES
TOOLS/
APPROACHES
Decide on priorities.
Set improvement
goals.
Review improvement
opportunities.
Identify improvement
projects and decide
which ones should be
worked on first
Pareto Diagram
Nominal Group
Technique (NGT)
Force Field Analysis
Cost of Quality
38
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Total Quality Management Model
5.6 Improve Process Quality
A major benefit of the improvement process is the reduction of the
quantity and range of variation
BREAKTHROUGH
NEW
LEVEL
OBJECTIVES
KEY
ACTIVITIES
TOOLS/
APPROACHES
Achieve improved level
of process performance.
Develop action plan.
Identify root causes.
Test and implement
solution.
e Define necessary steps
to hold gains.
e Conduct periodic
review of
progress.
Statistical Methods
Design of Experiments.
e Variation Reduction
e Robust Design
e Design to Production *
Templates
DoD Acquisition Initiative
39
-------
Total Quality Management
Step 6: Evaluate
Process Measurement
Project Measurement
Behavioral Change Measurement
Quality Loss Function
Measurement is an essential element of the continuous improvement process. It
focuses on the effectiveness of improvement efforts and identifies areas for future
improvement efforts.
A basic need in all improvement efforts is the ability to measure the value of the
improvement in units which are pertinent and meaningful to the specific task. For
example, one evaluation of the "before" and "after" levels of customer satisfaction
following an improvement effort might include the numbers of customer com-
plaints. In evaluating behavioral changes, one might measure and compare em-
ployee turnover rate, or the number of grievances filed in a month. Other mean-
ingful yardsticks might be dollars of cost, units per hour, rejects per lot, and cycle
time.
Process Measurements
These measurements track the performance of process with respect to:
~ Internal customers (next operation)
External customers (ultimate customer).
Most organizations have existing measures that may be used "as is" or
modified as necessary. There is no menu of measurements applicable to
all users. The key is to select measures that can be used by work units to
manage and evaluate their products and services so that continuous
process improvement can be undertaken.
(Continued on the next page)
40
-------
Total Quality Management Model
Project Measurements
A performance improvement team should develop measures that are appropriate
for their continuous process improvement project.
Behavioral Change Measurement
There should be observable, consistent evidence of the following:
1. Management support for continuous improvement
2. Trust between management and employees
3. Open communications without fear
4. Involvement of all employees
5. Teamwork
6. Supporting salary and reward system
7. Short-term issues do not overpower the long-run issues
8. Process, rather than functional orientation
9. Knowledge and skills of TQM
10. Availability of time and resources for TQM
11. Employee support for TQM
(Continued on the next page)
41
-------
Total Quality Management
Quality Loss Function
COST
W
LSL
USL
PARAMETERS
TARGET
From an engineering perspective, cost of quality can also be viewed as the losses
that are caused by a product's functional parameters deviating from its desired
target value.
A significant philosophical point is that cost of quality increases, not only when
the product is outside of specifications, but also when the product falls within
specifications but deviates from target values. These costs continually increase as
the product deviates further from the target value.
Examples of cost factors are:
Inspection costs
Rejects, scrap, rework
Lowered reliability due to tolerance build-up
Higher warranty costs
Less customer satisfaction.
The engineering objective is to reduce costs by decreasing variability around
target values. The concurrent engineering approach is one way to do this.
42
-------
Total Quality Management Model
Step 7: Review and Recycle
t
fj
K
111
OL
CONSTANCY
OF
PURPOSE
TIME
Most human efforts go through the three phases of Beginning-Growth-Fading
Out. It is necessary to perpetuate the continuous improvement process forever
(lifetime). Approaches to TQM tend to have a limited survival (cycle) and, if left
unattended, will become ineffective. Quality circles are an example.
All employees will need to review progress with respect to improvement efforts
and modify or rejuvenate existing approaches for the next progression of methods.
Quality circles may evolve into autonomous work teams. Suggestion awards
may evolve into gainsharing. Statistical process control may evolve into
variability reduction.
This constant evolution reinforces the idea that TQM is not a program but a new
day-to-day behavior for each member of the organization.
43
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Total Quality Management
Blank page
44
-------
Tools and Techniques of Total Quality Management
TOOLS AND TECHNIQUES
OF TOTAL QUALITY MANAGEMENT
This section provides additional guidance on the use of the generic tools and tech-
niques that were identified in the performance improvement model. They are
representative of the tools that are used to improve any process and are presented
in this section to provide an awareness of what they are, why they are used and
how to use them. Not all tools are appropriate for use in all applications. Other
sources should be consulted to obtain in-depth information concerning content
and use.
If your only tool is a hammer,
everything looks like a nail.
Preceding page Wank
45
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Total Quality Management
Improvement in Non-production Functions
Non-production functions such as administrative activities, human resource
departments, and accounting departments are often overlooked when an organiza-
tion decides to improve. Many times, management does not consider these
functions because the traditional view focuses on manufacturing processes.
"Non-production" is, in fact, a misnomer. All activities produce something
whether manufacturing a machined pan or an accounting report. If an activity
produces something, a process exists, and a process can be improved.
To make improvements in non-production activities, we need to identify the
process, its inputs and outputs, and its customers and suppliers. We can use the
same tools we use to analyze manufacturing processes. Examples include nomi-
nal group technique, statistical process control, input/output analysis, Pareto
chans, and cost of quality.
Consider a machined bolt and an accounting report
BOLT
REPORT
PROCESS
MACHINING BOLT
PREPARING REPORT
TYPICAL ACTIONS
SET UP LATHE
CUT METAL
PUT REPORT INTO
CORRECT FORMAT
INPUT
METAL BAR STOCK
DATA
OUTPUT
BOLT
REPORT
CUSTOMER
END USER
MANAGERS
SUPPLIER
MAKER OF
BAR STOCK
EMPLOYEES
PROVIDING DATA
Analysis of either process involves looking at the customer requirements, the
actual output, the actions in the process, and the input received from suppliers.
Non-production activities benefit from quality improvement just as production ac-
tivities benefit.
46
-------
Tools and Techniques of Total Quality Management
Benchmarking
BETTER T-
OUR
ORGANIZATION
WORSE -L-
ORGANIZATION 1
ORGANIZATION 2
ORGANIZATION 3
ORGANIZATION 4
ORGANIZATION 5
ORGANIZATION 6
What: Method of measuring your processes against those of recognized lead-
ers. It helps you to establish priorities and targets leading to competitive
advantage in the marketplace.
Why: When you know where you stand with respect to your competitors, you
can target various processes for improvement
How: 1. Identify items to benchmark and their key characteristics.
2. Determine who to benchmark - companies, organizations, or groups.
3. Determine benchmarks by collecting and analyzing data from direct
contact, surveys, interviews, technical journals, and advertisements.
4. From each benchmark item identified, determine the "best in class"
target.
5. Evaluate your process in terms of the benchmarks and set
improvement goals.
One example: Use the Baldridge National Quality Award
as a model to compare to.
Information can be obtained from:
U.S. Department of Commerce
National Institute of Standards and Technology
Gaithersburg, MD 20899
(301) 975-2036
47
-------
Total Quality Management
Cause and Effect Diagrams
What: Represents the relationship between an effect (problem) and its
potential causes.
Why: The diagram is drawn to sort and relate the interactions among the
factors affecting a process.
How: 1. Name the problem.
2. Decide the major categories of causes. Major causes may
include: data and information systems, dollars, environment,
hardware, materials, measurements, methods, people, and
training.
3. Brainstorm for more detailed causes.
4. Eliminate causes that do not apply.
5. Discuss the remaining causes and decide which are most
important
6. Work on most important causes (e.g., use design of experiments).
7. Desensitize, eliminate, or control causes.
Reference: Wads worth, Stephens and Godfrey. Modern Methods for Quality
Control and Improvement, New York: John Wiley, 1986.
48
-------
Tools and Techniques of Total Quality Management
Concurrent Engineering
o o
"
TYPICAL
CONCURRENT
ENGINEERING
TIME
What: A method for integrating functional disciplines such as
manufacturing and design. It is a systematic approach to product
design that considers all elements of the product life cycle.
Concurrent Engineering defines the product, its manufacturing
process, and other required life-cycle processes such as
maintenance.
Why: This approach can be used to shorten the design-to-development life
cycle, and reduce costs by examining the interaction of functional
disciplines from the perspective of a cross-functional process.
How: 1. Use cross-functional teams.
2. Identify and reduce variation in production and use through
adroit selection of design parameters.
3. See also tools:
Design of Experiments
Transition from Development to Production Templates
Team building
Reference: Taguchi, Shin and Byre, Diane M. The Taguchi Approach to
Parameter Design, American Society of Quality Control
(40* Annual Quality Conference Transactions).
49
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Total Quality Management
Cost of Quality
PREVENTION
CONFORMANCE
NONCONFORMANCE
BEFORE
APPRAISAL
INTERNAL
FAILURES
EXTERNAL FAILURES
AFTER
PREVENTION
APPRAISAL
FAILURES
CONFORMANCE
NONCONFORMANCE
What: A system providing managers with cost details often hidden from them.
Cost of Quality consists of all the costs associated with maintaining
acceptable quality plus the costs incurred as a result of failure to achieve
this quality.
Why: The cost of not doing things right the first rime can be considerable.
This includes administrative work.
How: 1. Identify quality costs. These are cost of nonconformance and cost
of conformance as shown on the diagram.
2. Identify the most significant costs.
3. Identify the causes of these major costs.
4. Identify solutions to reduce or eliminate causes.
5. Implement solutions.
50
-------
Tools and Techniques of Total Quality Management
Design of Experiments
DESENSITIZES PRODUCTION
AND OPERATIONAL
VARIABILITY
What: A body of knowledge used to improve the process of learning from
experimentation. This learning enables improved process design.
Why: Improves design-to-production transition. Quickly optimizes
product designs (robust design) and production processes. Reduces
costs, stabilizes production processes, and desensitizes production
variables.
How: 1. Identify controllable and uncontrollable (noise) factors that
influence the product's functional characteristics.
2. Set up an experiment to discover interactions and effects between
controllable and uncontrollable factors.
3. Study the factor variation in step 2 and determine the factor levels
that optimize the product's functional characteristic, while
minimizing the influence of uncontrollable factors.
Reference: Taguchi, Shin and Byre, Diane M. The Taguchi Approach to
Parameter Design, American Society of Quality Control
(40* Annual Quality Conference Transactions).
51
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Total Quality Management
Input/Output Analysis
INPUT-
PROJECT
PROGRAM
FUNCTION
INDIVIDUAL
OUTPUT
RESOLVES CONFLICTS
What: Systematic method for identifying interdependency problems by
defining objectives and listing inputs and outputs for major tasks,
functions, or individuals.
Why: Clarifies roles and responsibilities, resolves conflicts, eliminates
duplications, and opens lines of communication.
1. Define program objecnves/deliverables, work breakdown
structure, master schedule, and actual process.
2. Define prime and support responsibilities.
3. Define each team member's role.
4. Use nominal group technique for improvement ideas.
52
-------
Tools and Techniques of Total Quality Management
5. Implement improvement ideas.
Pareto Charts
COSTS
50%
100%
PROBLEMS
What: A bar chart in which the bars are arranged in descending order, with the
largest to the left Each bar represents a problem (cause). The chart
displays the relative contribution of each cause to the total problem.
Why: This technique is based on the Pareto principle, which states a few of
the causes often account for most of the effect. The Pareto chart
makes clear which "vital few" problems (causes) should be
addressed first. It is one of the most effective tools for finding these
problems and estimating the magnitude of benefits possible.
How: 1. List all elements of interest.
2. Measure the elements, using the same unit of measurement for each
element.
3. Order the elements according to their measure, not their
classification.
4. Create a cumulative distribution for the number of items and
elements measured and make a bar and line graph.
5. Work on the most important elements first.
Reference: Wadsworth, Stephens and Godfrey. Modern Methods for Quality
Control and Improvement, New York: John Wiley, 1986.
53
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Total Quality Management
Nominal Group Technique (NGT)
What: A technique similar to brainstorming. A very structured approach to
generate ideas and survey the opinions of a small (10-15) group.
Why: NGT produces many ideas/solutions in a short time. Structured to
focus on problems, not people; to open lines of communication; to
ensure participation; and to tolerate conflicting ideas. Builds
consensus and commitment to the final result
How: 1. Present issue, instructions.
2. Generate ideas-5 to 10 minutes of quiet time, no discussion.
3. Gather ideas-round-robin, one idea at a time, written on flip chart
and posted.
4. Process/clarify ideas-duplicates are eliminated, like ideas are
combined. Limit discussion to brief explanations of logic or
analysis of an item and brief agreement/disagreement statements.
Focus on clarification of meaning, not arguing points.
5. Set priorities-silently.
6. Tabulate votes.
7. Develop an action plan.
Reference: Delbecq, Van de Von andGustafson. Group Techniques for Program
Planning. Scott Foresman and Company, 1975.
Gregerman, Ira G. Knowledge Worker Productivity. New York:
AMA Management Briefing, American Management Association,
1981, p. 55.
54
-------
Tools and Techniques of Total Quality Management
Quality Function Deployment (QFD)
What: A conceptual map that provides the means for cross-functional
planning and communications. A method for transforming customer
wants and needs into quantitative, engineering terms.
Why: Products should be designed to meet customer wants and needs so
that customers will buy products and services, and continue to buy
them. Marketing people, design engineers, manufacturing
engineers, and procurement specialists work closely together from
the time a product/service is first conceived to be able to meet
customer requirements. QFD provides the framework for the
cross-functional teams to work within.
How: 1. Ask these questions:
What do customers want (attributes)?
Are all preferences equally important?
Will delivering perceived needs yield a competitive
advantage?
What are the engineering characteristics that match
customers attributes?
How does each engineering characteristic affect each
customer attribute?
How does one engineering change affect other
characteristics?
References: Hauser, John R. and Clausing, Don. House of Quality,
Harvard Business Review, May-June, 1988, pp 63-73.
King, Bob. Better Quality in Half the Time, Gonl/QPC, Methven,
MA, 1987.
55
-------
Total Quality Management
Statistical Process Control (SPC)
IDENTIFY PROBLEMS
COMMON -*- RANDOM HAPPENINGS
SPECIAL -» ABNORMALITIES
What: Method for determining the cause of variation based on a statistical
analysis of the problem. SPC uses probability theory to control and
improve processes.
Why: SPC is an effective tool for improving performance of any process.
It helps identify problems quickly and accurately. It also provides
quantifiable data for analysis, provides a reference baseline, and
promotes participation and decision-making by people doing the job.
How: 1. Identify problems or performance improvement areas. Identify
common and special causes. Common causes are random in
nature, often minor. Special causes result from an abnormality in
the system that prevents the process from becoming stable.
2. Do a cause and effect analysis.
3. Collect data.
4. Apply statistical techniques (may need a statistical specialist).
5. Analyze variations.
6. Take corrective action.
Reference: Deming, W.E. Quality, Productivity, and Competitive Position,
Circle Advanced Engineering Studies, 1983.
Stewart, Walter. Economic Control of Manufactured Product,
1980, p. 501.
56
-------
Tools and Techniques of Total Quality Management
Team Building
What: Developing and maintaining a group of people who are working
together for a common goal.
Why: When a job requires interdependence among the people working on the
job, it is important to ensure that these people can and will work together
smoothly.
How: Rules to remember Do not ignore team/team member problems;
balance between the needs of the individuals, the team, and the goal.
1. Identify the team.
2. Develop the team: teach group problem-solving, openly share
data, build norms of shared and collaborative action, and teach
team members to reinforce one another.
3. Identify team goals.
4. Recognize team accomplishments regularly.
5. Maintain the team.
Reference: Dyer, William G. Team Building: Issues and Alternatives: Reading,
MA: Addison-Wesley Publishing Co. 1977, p. 139.
57
-------
Total Quality Management
Time Management
What: Managing time to gain greater flexibility and control of
activities - an important aspect of implementing TQM.
Why: TQM is implemented by busy people. By using the discipline of
time management, discretionary time can be increased and applied to
improvement efforts. Many activities associated with TQM involve
better use of time, e.g., cycle time reduction.
How: 1. Prioritize activities. Suggest using an "ABC" approach.
"A" activities are must do.
"B" activities are beneficial but not mandatory.
"C" activities are unnecessary and serve as time wasters.
2. Identify and remove time wasters such as:
Unclear objectives
Postponed decisions
Lack of information
Interruptions
Lack of self-discipline
Lack of priorities
Junk mail
Unnecessary meetings
Crisis management
Red tape
Can't say no
Mistakes
Poor information
Procrastination
Lack of feedback
Telephone
Visitors
Failure to delegate
Absense of procedure for routine matters
Shortage of managerial tools
Poor physical fitness
Inconsistent actions
Low morale
58
-------
Tools and Techniques of Total Quality Management
Work Flow Analysis (WFA)
START » PROCESS +-ENO
/ \
OBJECTIVES TASKS
ARE ALL TASKS NECESSARY?
What: A structured system to improve a work process by eliminating
unnecessary tasks and streamlining the work flow.
Why: There is almost always a better, easier way to do something. WFA
identifies and eliminates unnecessary process steps by analyzing
functions, activities, and tasks. Uses cross-functional teams.
How: 1. Define process in terms of purposes, objectives, start and end
points.
2. Identify functions-major responsibilities of organization
including manpower and planning.
3. Identify activities-below function, usually resides in a single
department.
4. Identify tasks-basic steps used to perform each activity and to
provide the most specific description of a process.
5. Analyze the process with a cross-functional team.
6. Identify lengthy tasks, choke points, duplicative tasks, etc.
7. Determine and implement an action plan for improvement.
59
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DoD Total Quality Management in Systems Acquisition
DoD TOTAL QUALITY
MANAGEMENT
IN SYSTEMS ACQUISITION
To this point, the basis for conducting a TQM effort in any organization-govern-
ment or industry-has been provided. In view of the criticality of system acquisi-
tion in the context of national security, it is imperative that the TQM concepts,
practices, tools, and techniques be rapidly integrated into the DoD system acquisi-
tion process.
TQM Applies Universally
DoO Operations
Contractor
OperaDons
Preceding page Wank
(Continued on the next page)
61
-------
Total Quality Management
In this section, a number of DoD acquisition initiatives are presented in sum-
mary form. Some of these initiatives were developed prior to the development
of the TQM philosophy and, therefore, may not be integrated and consistent in
all aspects with TQM. Therefore, they may need to be modified in order to
apply them in a manner consistent with the TQM philosophy.
The initiative on Transition from Development to Production Templates has
been revised to include TQM. Others are supportive of TQM. For example,
Acquisition Streamlining clarifies customer requirements. Exemplary
Facilities promotes use of SPC. R&M 2000 promotes use of variability reduc-
tion and QFD.
TQM suppliers require TQM customers.
See next page for DoD posture statement.
62
-------
DoD Total Quality Management in Systems Acquisition
DoD Acquisition Process Posture Statement
Quality is absolutely vital to our defense, and requires a commitment to
continuous improvement by all DoD personnel.
A quality- and productivity-oriented Defense Industry, with its underlying
industrial base, is the key to our ability to maintain a superior level of readi-
ness.
Sustained DoD-wide emphasis and concern with respect to high quality and
productivity must be an integral part of our daily activities.
Quality improvement is a key to productivity improvement and must be pur-
sued with the necessary resources to produce tangible benefits.
Technology, being one of our greatest assets, must be widely used to improve
continuously the quality of Defense systems, equipment, and services.
Emphasis must change from relying on inspection, to designing and building
quality into the process and product.
Quality must be a key element of competition.
Acquisition strategies must include requirements for continuous improve-
ment of quality and reduced ownership costs.
Managers and personnel at all levels must take responsibility for the quality
of their efforts.
Competent, dedicated employees make the greatest contributions to quality and
productivity. They must be recognized and rewarded accordingly.
Quality concepts must be ingrained throughout every organization with the
proper training at each level, starting with top management.
Principles of quality improvement must involve all personnel and products,
including the generation of products in paper and data form.
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Total Quality Management
DoD Total Quality Management Initiatives
DOD intiatives listed here will leverage the benefits achieved by implementing
the TQM model.
ORIENTATION
DoOWlDE
1. ACQUISITION STREAMLINING
2. COULD COST
3. TRANSITION FROM
DEVELOPMENT
TO PRODUCTION
4. IMP
5. VALUE ENGINEERING
6. EXEMPLARY FACILITIES
7. PRODUCT
NON-CONFORMANCE
REDUCTION
ARMY ,
1. (CPT
AIR FORCE
1. FUM2000
DEFMNQ
CONTRACT
REQMTS
V
V
V
V
DESIGN
V
V
V
PRODUCTION
V
V
V
V
V
V
V
FOCUS
1. SPECIFY TRUE CUSTOMER
REQUIREMENTS AND
STATE WHAT. NOT HOW
2. ELIMINATE
NON-VALUE-ADDED
RULES/REGULATIONS
3. USE TEMPLATES FOR
REDUCING RISK
4. CONTRACT INCENTIVES
FOR CONTRACTOR
MODERNIZATION AND
PRODUCTIVITY
IMPROVEMENT
5. USE TO ANALYZE FUNCTIONS
FOR IMPROVED VALUE
8. IMPLEMENT PROCESS
CONTROL 4 YIELD
IMPROVEMENT
7. ENCOURAGE QUALITY
IMPROVEMENT THROUGH
USE OF INCENTIVES/
PENALTIES
1. USESPC
TO REDUCE
GOVERNMENT
INSPECTION
1. UTILIZE VARIATION
REDUCTION. DESIGN OF
EXPERIMENTS, QUALITY
FUNCTION DEPLOYMENT
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DoD Total Quality Management in Systems Acquisition
Acquisition Streamlining
S
T
R
E
A
M
L
I
N
I
N
G
PRACTICES
What: A set of actions to eliminate unnecessary or conflicting requirements
which compound cost and time without adding capability to DoD
acquisitions. A way for producers (industry) to help the customer
(DoD) define requirements and reduce cost.
Why: To promote innovative and cost-effective acquisition strategies and
requirements that will result in the most efficient utilization of
resources to produce quality weapons systems and products.
Acquisition Streamlining can reduce the cost and/or time of system
acquisition and life-cycle cost without degrading system
effectiveness.
(Continued on the next page)
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Total Quality Management
How: 1. Specify requirements in terms of results desired, not
"how-to-design" or "how-to-manage." The use of Quality
Function Deployment (QFD) may be helpful.
2. Preclude premature application of design solutions and
specifications.
3. Tailor requirements to unique circumstances of individual
programs.
4. Limit the contractual applicability of referenced documents.
References: DoD Directive 5000.43 "Acquisition Streamlining."
MIL-HDBK-248 "Acquisition Streamlining."
Defense Acquisition Circular, 1 November 1988, Number 88-1.
Federal Acquisition Circular, September 2, 1988, Number 84-39.
Department of Navy Handbook, Implementation of
Non-Development Item Acquisitions, 6 June 1988.
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DoD Total Quality Management in Systems Acquisition
Could Cost
FAR
What: An approach aimed at substantial quality improvement and cost
reductions in developing and producing weapon systems and other
military products and services through elimination of unnecessary
procurement regulations.
Why: Could Cost is a way to get industry and government to work
together to eliminate non-value-added effort. Could Cost is a new
way of doing business, but most changes require no new policy
directives or legislation. The cne restriction is that all requirements
imposed by law or executive orders must be complied with. All
internally imposed rules, regulations, and conventions are subject to
critical examination and challenge.
How: Contractor:!. Develop Could Cost proposal for changes to RFP.
2. Coordinate with key suppliers.
DoD: 3. Evaluate proposal in source selection.
4. Negotiate changes after contract award.
5. Reduce contract price by negotiating cost reduction
for changes.
Contractor: 6. Execute agreements with key subcontractors.
Reference: Memorandum for the Secretaries of the Military Departments and
Directors of the Defense Agencies, 1 May 1988.
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Total Quality Management
Transition from Development to Production
PRODUCT
_L
TQM
FUNDING |
MONEY PHASING
*{TRANSITION PLAN
What: The Transition from Development to Production Directive
requires the application of integrated design and engineering
disciplines in the construction and conduct of defense acquisition
programs (concurrent engineering). Use of a formal risk reduction
program is also prescribed for which a guidance manual containing
48 "templates" is provided. The templates cover the areas found
through experience and by the Defense Science Board to be critical
to success of the system. This "Transition" manual treats acquisition
as an "industrial process" and is a TQM document in concept. It is
written from both industry and DoD perspectives.
68
(Continued on the next page)
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DoD Total Quality Management in Systems Acquisition
Why: Cost, schedule, and performance problems in acquisition manifest
themselves as failure to make a smooth transition from development
to production and initial deployment. Failure is most frequently a
consequence of treating transition as a managerial event rather than a
technical process. A successful process considers all life cycle
disciplines, including producibility and supportability, from the
outset and establishes a continuum of integrated design, test,
production, and support.
How: The templates of the Transition and Best Practices Manuals are
used to identify the most frequently encountered risks and to
describe the attributes and characteristics of a low-risk program.
Risk is reduced and improvement is made when the process is
changed. Each template includes a timeline suggesting when the
activity might best begin and be completed. Refer to the Defense
Production Management Directive for a listing of the production
activities to be addressed specifically at each milestone decision
point. Change 1 to DoD 4245.7-M provides special coverage on
implementing TQM in the acquisition process.
Reference: DoDD 4245.6, Defense Production Management.
DoDD 4245.7, Transition from Development to Production.
DoD 4245.7-M, Transition from Development to Production.
NAVSO P-6071, Best Practices.
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Total Quality Management
Industrial Modernization Incentive Program (IMIP)
INDUSTRIAL
MODERNIZATION
INCENTIVE
PROGRAM
COST
OLD
NEW
SAVINGS
TIME
What: A DoD program that provides incentives for contractor
modernization and productivity improvement. Focuses on shared
savings rewards and contractor investment protection.
Why: DoD wants to eliminate inhibitions to modernization and progress of
productivity. These inhibitions are usually created by definitions of
allowable cost in the DoD acquisition process. Two major problems
are program uncertainties and cost-based profit policies. IMIP will
develop contract incentives aimed at encouraging industry to make
productivity-enhancing capital investments. IMIP provides
contractors with a nominal financial sharing of capital investments
and a sharing of realized savings. IMIP will increase industrial
competitiveness, reduce lead times, and increase effectiveness of
research and development, procurement, and logistics.
How: 1. Establish a memorandum of agreement covering modernization
plans.
2. Establish an incentive structure based on the accomplishment of
achievements set forth in the approved plan.
Reference: Stimson, R.A. and Reeves, A.D. Tri-Service DoD Program
Provides Incentives for Factory Modernization, Industrial
Engineering, Feb. 1984, vol 16, No. 2, pp. 54-61.
DoD/5000.44G, Industrial Productivity Incentive Program.
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DoD Total Quality Management in Systems Acquisition
Exemplary Facilities
\ I /
What: A program that consolidates various military services approaches for
dealing with contractors who exhibit continued ability to supply
superior products to DoD within the confines of their contractual
requirements such as Army (CP)2 program.
Why: To improve the ability of the Department of Defense to obtain
quality weapon systems at reasonable cost and to integrate the
various efforts of DoD components into a consistent contractor
quality improvement approach. A contractor who is an exemplary
facility will have less government oversight. If his quality
deteriorates, he will again be subject to full, routine surveillence.
How: 1. Provide business incentives, not necessarily financial, to
encourage better contractor quality performance.
2. Provide incentives for contractors to provide continuous quality
improvement.
3. Re focus government surveillance once contractor reaches
exemplary facility status.
Reference: Draft Exemplary Facilities Concept Paper (Navy).
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Total Quality Management
Contractor Performance Certification Program (CP)2
What: The Army's program that rewards quality improvement by
decreasing surveillance. It emphasizes the need for quality
management and planning. It recognizes defense contractors who
have proven they provide quality products and the products and
services provided by their suppliers. The Army will decrease
oversight over contractors who are certified to meet these
requirements. Offered on major programs ($100M R&D/S500M
production). This program and the Exemplary Facilities Program
may be merged in the future.
Why: Recognize contractor commitment to continuous quality
improvement.
How: 1. Contractor's quality performance programs must include SPC.
2. The contractor should have a tailored plan for (CP)2 addressing:
contractor responsibilities for control of processes, corrective
actions, internal audits, vendor/manufacturing capabilities, trend
analysis, improvement goals, and measurable milestones for goal
achievement.
3. Contractor performance should be judged in terms of: evidence
of having consistently produced delivered supplies conforming to
contract requirements; evidence of effective SPC system for both
procured and manufactured material; an aggressive, continuous
effort to improve quality and productivity; establishment of a
satisfactory support system responsible for coordinating user
feedback: and incorporation of a cost-effective, total audit system
to track performance against established milestones.
72
Reference: AMC-R 702-9
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DoD Total Quality Management in Systems Acquisition
Value Engineering
What: A systematic functional analysis leading to actions or
recommendations to improve the value of systems, equipment,
facilities, services, and supplies. Value being the best balance
between performance and cost (Terms such as value analysis, value
control, value improvement, and value management are
synonymous.)
Why: To simultaneously improve quality, reduce cost, and improve
schedules.
How: 1. Identify required functions.
2. Analyze current solution by breaking into primary parts, which
address required functions; and secondary parts, which support
primary parts.
3. Identify cost associated with each pan.
4. Identify cost to perform required functions.
5. Minimize secondary parts.
6. Develop alternate solutions with associated costs that meet
required functions.
7. Select and implement solution that provides the best value.
Reference: DoD Directive 4245.8, Value Engineering Program,
March 20, 1987.
Federal Acquisition Regulation (FAR), Chapter 1,
SubchapterG, Part 48, April 1, 1984.
Defense Acquisition Circular 86-6, 1 September 1987.
DoD Handbook 4245.8 H, Value Engineering,
March 17, 1986.
DLAH 8400.4, Value Engineering - Guidebook for
DoD Contractors, April 1988.
Techniques of Value Analysis and Engineering,
Lawrence D. Miles, McGraw Hill Book Company, 1961.
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Total Quality Management
R&M 2000
R&M 2000 VRP
COMBAT
CAPABILITY
ROBUST
DESIGN
- PRODUCT
-PROCESS
TARGET VALUE - FEWER DEFECTS
SIMULTANEOUS ENGINEERING
DEVELOPMENT
PRODUCTION
REQUIREMENTS
What: A TQM initiative emphasizing SPC and progressing to variation
reduction, design of experiments, and Quality Function Deployment
(QFD). Robust design, or desensitizing manufacturing variation, is
heavily stressed.
Why: The Air Force must significantly improve the reliability and
maintainability of its systems to increase combat capability while
R&M 2000 reduces time from drawing board to field, thus keeping
the Air Force within its manpower and funding restraints.
How: Implement:
SPC
Variation reduction
Design of experiments
Quality function deployment
Concurrent engineering and robust design.
74
Reference: USAF R&M 2000 Process.
R&M 2000 Policy Letter, No. 6, July 14, 1988.
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DoD Total Quality Management in Systems Acquisition
Product Nonconformance Reduction
o
E
TIME
What: A policy focusing on actions to be taken early in the design,
development, and production of new systems, subsystems, and
equipment in order to prevent nonconformance (Material Review
Board action on Type II quality deficiencies).
Why: It is government policy to reject material and supplies not
conforming in all respects to contract requirements. The Product
Nonconformance Reduction policy reduces costs and delays ,
incurred from rejecting contractor products by setting objectives for
contractors to reduce or eliminate nonconformance and promote
continuous quality improvement.
How: Set targets for yield improvement. Assess rewards/penalties based
on performance to goals.
Reference: Joint Services Regulation, Quality Improvement Product
Nonconformance Reduction (Draft).
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Additional Information
ADDITIONAL INFORMATION
Suggested Readings
The key to effective and successful implementation of TQM is understanding the
underlying philosophy and theories that support continuous process improvement
efforts. DoD and industry personnel can greatly benefit from the references listed
below. The following suggested books are some of the best in the field of con-
tinuous process improvement. Though the list is not exhaustive, the references
will provide a sound basis for understanding the TQM philosophy.
Deming, W. Edwards: Out of the Crisis, Massachusetts Institute of
Technology, Center for Advanced Engineering Study, Cambridge, Mass.,
1986.
Feigenbaum, Amand V.: Total Quality Control, McGraw-Hill Book
Company, New York, 1983.
Gavin, David A.: Managing Quality, The Free Press, New York, 1988.
Harrington, H. James: The Improvement Process, McGraw-Hill Book
Company, New York, 1987.
Imai, Masaaki: Kaizen, Random House, New York, 1986.
Ishikawa, Kaoru: What is Total Quality Control? Prentice-Hall, Engle-
wood Cliffs, N J., 1985.
Juran, J. M.: Managerial Breakthrough, McGraw-Hill Book Company,
New York, 1964
Managing Quality and Productivity in Aerospace and Defense, De-
fense Systems Management College, Fort Belvoir, Virginia, December,
1988.
Scherkenbach, William: The Deming Route to Quality and Productiv-
ity, Gee Press, Washington, D.C., 1986.
Schonberger, Richard J.: Japanese Manufacturing Techniques: Nine
Hidden Lessons in Simplicity, The Free Press, New York, 1982.
Townsend, Patrick L.: Commit to Quality, John Wiley and Sons, New
York, 1986.
Preceding page blank 7-
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Total Quality Management
The Federal Quality Institute
The Federal Quality Institute is focusing its efforts in three areas.
First, it provides quality awareness training courses to federal government man-
agement teams. This one-day course provides managers with the information
they need to make decisions about where to begin the TQM journey.
Second, the Institute has available, through a Federal Master Contract, private-
sector quality experts agencies can use to assist them in implementing TQM. This
expertise is available without the need to work through a lengthy contracting
process.
Third, the Institute maintains a Quality and Productivity Resource Information
Center, an extensive library of materials on quality practices and training.
For Information Contact: Federal Quality Institute
1621 N. Kent Street, Room 1112-RPE
Arlington, VA 22209
(703) 235-2930
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Additional Information
Defense Systems Management College
Total Quality Management Course
New Course Offered in 1989
This course addresses theory and application of TQM principles in the DoD
environment. An interdisciplinary course, it covers current DoD initiatives and
their impacts in the areas of technical, financial, and acquisition policy. Selected
guest lecturers from government, the defense industry, and commercial industry
discuss TQM applications and problems unique to the DoD. Case studies allow
the student to analyze and provide solutions to current problems facing DoD and
industry program managers. Study objectives, assigned readings, and functional
lectures guide the students, who are encouraged to present actual problems for
class discussion and analysis.
Course Eligibility:
The course is open to military officers in grades 0-4 through 0-6 and civilians in
grades GS-13 through GS-15. Individuals holding equivalent grades in other
federal agencies and defense-related industries are encouraged to attend.
Students are introduced to the concept of variability in design and manufacturing,
statistical process control, and experimental design based on works by Dr. W.
Edwards Deming and Dr. Genichi Taguchi. Other issues include streamlining
contractual requirements; improving interaction among designers, manufacturing
engineering, logisticians and users; and making a contractor's past performance
and quality history a factor in source selection.
The goal of the course is to establish a sound technical and management founda-
tion that can be tailored to individual DoD programs.
For additional information, call: (703) 664-2457 or Autovon 354-2457
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