TOTAL QUALITY MANAGEMENT

MGT: 310
2 UNITS

SECOND SEMESTER 2023/2024 ACADEMIC SESSION.

MODULE 1:

Development of Total Quality Management

In 1984, an arm of the United States Navy asked some of its civilian researchers to assess
statistical process control and the work of several prominent quality consultants and to make
recommendations as to how to apply their approaches to improve the Navy's operational
effectiveness. The recommendation was to adopt the teachings of W. Edwards Deming.The
Navy branded the effort "Total Quality Management" in 1985.
From the Navy, TQM spread throughout the US Federal Government, resulting in the
following:
i. The creation of the Malcolm Baldrige National Quality Award in August 1987
ii. The creation of the Federal Quality Institute in June 1988
iii. The adoption of TQM by many elements of government and the armed forces,
including the United States Department of Defense, United States Army, and
United States Coast Guard

The US Environmental Protection Agency's Underground Storage Tanks program, which was
established in 1985, also employed Total Quality Management to develop its management
style. The private sector followed suit, flocking to TQM principles not only as a means to
recapture market share from the Japanese, but also to remain competitive when bidding for
contracts from the Federal Government since "total quality" requires involving suppliers, not
just employees, in process improvement efforts.
Features
There is no widespread agreement as to what TQM is and what actions it requires of
organizations, however a review of the original United States Navy effort gives a rough
understanding of what is involved in TQM.
The key concepts in the TQM effort undertaken by the Navy in the 1980s include:
i. Quality is defined by customers' requirements.
ii. Top management has direct responsibility for quality improvement.

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 iii. Increased quality comes from systematic analysis and improvement of work
processes.
iv. Quality improvement is a continuous effort and conducted throughout the
organization.

The Navy used the following tools and techniques:

Ad hoc cross-functional teams (similar to quality circles) are responsible for addressing
immediate process issues
Standing cross-functional teams responsible for the improvement of processes over the long
term
Active management participation through steering committees
Use of the Seven Basic Tools of Quality to analyze quality-related issues
Notable Definitions
While there is no generally accepted definition of TQM, several notable organizations have
attempted to define it. These include:
United States Department of Defense (1988)
"Total Quality Management (TQM) in the Department of Defense is a strategy for
continuously improving performance at every level, and in all areas of responsibility. It
combines fundamental management techniques, existing improvement efforts, and
specialized technical tools under a disciplined structure focused on continuously improving
all processes. Improved performance is directed at satisfying such broad goals as cost,
quality, schedule, and mission need and suitability. Increasing user satisfaction is the
overriding objective. The TQM effort builds on the pioneering work of Dr. W. E. Deming, Dr.
J. M. Juran, and others, and benefits from both private and public sector experience with
continuous process improvement."
British Standards Institution standard BS 7850-1:1992
A management philosophy and company practices that aim to harness the human and material
resources of an organization in the most effective way to achieve the objectives of the
organization.
International Organization for Standardization standard ISO 8402:1994
A management approach of an organisation centred on quality, based on the participation of
all its members and aiming at long term success through customer satisfaction and benefits to
all members of the organisation and society.
The American Society for Quality
A term first used to describe a management approach to quality improvement. Since then,
TQM has taken on many meanings. Simply put, it is a management approach to long-term

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success through customer satisfaction. TQM is based on all members of an organization
participating in improving processes, products, services and the culture in which they work.
The methods for implementing this approach are found in the teachings of such quality
leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa,
and Joseph M. Juran.
The Chartered Quality Institute
TQM is a philosophy for managing an organization in a way that enables it to meet
stakeholder needs and expectations efficiently and effectively, without compromising ethical
values.

Now What is Total Quality?

Whatever type of organisation you work in – a hospital, a university, a bank, an insurance

company, local government, an airline, a factory – competition is rife: competition for
customers, for students, for patients, for resources, for funds. Any organisation basically
competes on its reputation– for quality, reliability, price and delivery – and most people now
recognise that quality is the most important of these competitive weapons.

1.1 What is quality?

The word quality is derived from Latin word qualis, which means “what kind of”. It connotes
a variety of meanings and implies different things to different people. According to Juran,
“Quality is fitness for use or purpose”. Crosby considers it as “conformance to
standards”. Deming defines quality as “a predictable degree of uniformity and dependability
at low cost and suited to market”. In general quality is one which satisfies customer needs
and continuously keeps on performing its functions as desired by customers as per specified
standards.

Thus, the definition of quality depends on the people defining it. People have difficulty
defining quality but they know it when they see it. The word quality is derived from Latin
word qualitas meaning quality. Quality is a state of non-inferiority or superiority of
something. It is defined as the fitness for purpose. It is a somewhat subjective attribute
because what is qualitative in the eyes of Mr A may not be qualitative in the eyes of Mr
B. You may have an opinion as to which restaurant provides the highest quality, but it would
probably be difficult for you to define your quality standards in precise terms. Also, your
friends may have different opinion regarding which restaurant is of high quality. In the
business setting, each stakeholder may have different views when it comes to assessing the
qualitative feature of a product or service provided by a business organisation. Consumers
may only be interested on the specification quality of a product/service, or how it compares
to competitors in the marketplace. Producers might measure the conformance quality, or
degree to which the product/service was produced correctly. Support personnel may measure
quality in the degree that a product is reliable, maintainable, or sustainable. So, there is no
single definition of quality. However, the following are some of the more common
definitions of quality.

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 (i) Conformance to specification measures how well the product or service meets
the targets and the tolerances determined by its designers.
E.g, the dimension of a machine part may be specified as 3+0.5 inches, i.e., the machine
should be 3 inches long but there could be a tolerance of +0.5 inches (3.05 inches) or -0.05
(2.95 inches). The wait for a restaurant meal may be specified as 3 minutes but there may be
delay of 1.5 minutes. Conformance to specification is directly measurable, though it may not
be directly related to the customers’ idea of quality.
(ii) Fitness for use focuses on how well the product performs its intended function or
use.
For example, a marker and a biro, if the intended function was to write, they all meet the
fitness for use definition. But if the intended function was to write on a board, the marker has
a greater fitness for use. Fitness for use is a user-based definition as it is intended to meet the
needs of a specific user group.
(iii) Value for price paid is a definition of quality that consumers often use for
product or service usefulness.
This is the only definition of quality that combines economics with consumer criteria. It
assumes that the definition of quality is price sensitive. For example, you may wish to
consider studying MBA at Ahmadu Bello University but you discovered that the same MBA
is delivered at MAUTECH at a reduced tuition fee. If you take MAUTECH, you will feel that
you have received greater value for the price.
(iv) Support services quality defined in terms of the support provided after the
product or service is purchased.
Here, quality does not apply to the product or service itself; but it also applies to the people,
the processes, and organisational environment associated with it. E.g., the quality of a
university is judged not only by the quality of staff and the course offerings, but by the
efficiency and accuracy of processing paper works.
(v) Psychological criteria are a subjective definition that focuses on the judgemental
evaluation of what constitutes product or service quality.
Different factors contribute to the evaluation, such as atmosphere of the environment or the
perceived prestige of the product. E.g., a hospital patient may receive an average health care
but a very friendly staff may leave the impression of high quality. Similarly, we commonly
associate certain products with excellence because of their reputation; Rolex watches and
Mercedes-Benz automobiles are examples.

1.2 Quality in manufacturing and service organisations

Manufacturing organisations produce tangible products that can be seen, touched, and
directly measure. Therefore, quality definitions in manufacturing organisations usually focus
on tangible product features. The most common definitions of quality in manufacturing is

(i) Conformance – the degree to which a product characteristics meets pre-set standards.
Other definitions of quality in manufacturing are

(ii) Performance – such as acceleration of a vehicle;

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(iii) Reliability – the product will function as expected without failure;

(iv) Features – the extras that are included in a product beyond the basic characteristics.

(i) Durability – the expected operational life of a product

(ii) Serviceability - how readily a product can be repaired

The relative importance of these definitions is based on the preferences of the each individual
customer. It is easy to see how different customers can have different definitions in mind
when they speak of high quality product. In contrast, service organisations produce intangible
goods that cannot be seen and touched but only experienced. The intangibility nature of the
product makes defining quality difficult. Since a service is experienced, perception can be
highly subjective. In addition to intangible factors, quality of service is often defined by
perceptional factors. These include responsiveness to customer needs, courtesy and
friendliness of staff, promptness in resolving complaints, and atmosphere.

Definitions of quality in service include

i). time – the amount of time a customer has to wait for the service.

ii). consistency – the degree to which the service is the same each time. For these reasons,
defining quality in service can be especially challenging.

Table 1.2 Quality differences in manufacturing and service organisations

Manufacturing Service

Conformance to specifications Tangible factors

Performance Consistency

Reliability Responsiveness to customer need

Features Courtesy/friendliness

Durability Timeliness/Promptness

Serviceability Atmosphere

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According to Feigenbaum, in an increasingly competitive world quality is no longer an
optional extra, it is an essential business strategy for survival. Quality can also be quantified
as

Q=P/E

Where:

Q = Quality

P = Performance

E = Expectation

1.3 Quality dimensions

Price and Gaskill have identified three dimensions of TQM. These are:

(i) The product and service dimension: the degree to which the customer is
satisfied with the product or service supplied;
(ii) The people dimension: the degree to which the customer is satisfied with the
relationship with the people in the supplying organisations;
(iii) The process dimension: the degree to which the supplier is satisfied with the
internal work processes, which are used to develop the products and services
supplied to the customers.

On the other hand, Noriaki Kano and others have proposed the concept of two dimensional
quality “must be quality” and “attractive quality”. Must be quality is that aspect of a product
or service that a customer expects. This is the minimum acceptable standard which if not
available in the product the customer will be extremely dissatisfied. Attractive quality, on the
other hand, is that aspect of a product of service that goes beyond current needs. The special
features which will thrill the customer are examples of attractive quality. A well designed
product or service should have both dimensions of quality. These can strongly influence the
customers buying decision. It can be seen that a definition of quality has expanded over a
period of time to incorporate more and more aspects of quality of a product or service.

1.4 Types of quality

Quality is classified in several ways such as hardware quality and software quality, quality of
design and quality of manufacture, and product quality & process quality

1.4.1 Hardware quality & software quality

(a) Hard Quality relates to tangible aspects of Quality such as size, weight, functions,
reliability, packing, delivery, cost and payment conditions, customer support, etc.

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(b) Software Quality related to the intangible attributes of the quality of the product or
service such as courtesy, security, reception, hospitality, correspondence, meetings, etc.

1.4.2 Quality of design & quality of manufacture

(a) Quality of Design relates to a high technology product or service with a lot of features
and attributes. This type of quality, calls for a high level of investment in R&D and
upgradation to manufacturing/delivery technology. This is a technology intensive quality,
e.g., A TV with a large number of features such as a large number of channels, good picture
and sound characteristics, etc.

(b) Quality of manufacture, on the other hand, concerns itself with reduction of defects in the
manufacturing process/system to produce a product/service which is highly reliable in
operation. A product may have a high Quality of Design but if it fails too often, then its
Quality of manufacture is low. This type of quality is not capital intensive and relies on small
and continuous improvements in the process to reduce defects.

1.4.3 Product quality & process quality

(a) The Product Quality relies on measurement of product characteristics such as size, weight,
specifications, etc., as a means to ensure that a good quality product reaches the customer.
The concept is synonymous with the Inspection concept where the product characteristics are
measured at the end of each process and this is used as a feedback to correct the process. The
BIS Standards of various products such as steel, concrete insulators, etc., are examples of
product standards.

(b) Process Quality on the other hand relies on control of process characteristics such as
speed, depth of cut, temperature, pressure, etc., to ensure Product Quality. The basic
philosophy being “if the Process is right the Product will be right.” This concept is
synonymous with the Quality Assurance Concept wherein Process Control ensures suitability
of design (to meet requirement), selection and use of the right process, raw material, control
of the production and delivery process, etc., to ensure the right quality product reaches the
customer.

The ISO 9000 (IS-14000) series of Standards are oriented towards Process Quality, as the
focus of ensuring the Quality of the overall Management System (Process), is to ensure the
Product Quality.

1.5 The four quality imperatives

The four imperatives of quality reflect the complex environment in which organisations
operate. They are the drivers and motivating forces that challenge any organisation to take a
proactive stance on quality.

1.6.1 The moral imperative

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The customers and clients of the business organisation deserve the best possible quality of
product or service. It is the duty of business professionals and administrators to have an
overriding concern to provide the very best possible business opportunities. So business
owners should understand that anything less than total quality may not be accepted by the
customer.

1.6.2 The professional imperative

Closely linked to the moral imperative is the professional imperative. Professionalism implies
a commitment to the needs of customers and an obligation to meet their needs by employing
the most appropriate business practices. Managers have a professional duty to improve the
quality of their products and services and this, of course, places a considerable burden on
management and employees to ensure that both the production processes and the
management of the organisation are operating to the highest possible standards.

1.6.3 The competitive imperative

Competition is a reality in the world of business of today. Management can meet the
challenge of competition by working to improve the quality of their products and services and
of their delivery to the final customer. The importance of TQM to survival is that it is a
customer-driven process, focusing on the needs of clients and providing mechanisms to
respond to their needs and wants. Competition requires strategies that clearly differentiate
companies from their competitors. Quality may sometimes be the only differentiating factor
for a company. Focusing on the needs of the customer, which is at the heart of quality, is one
of the most effective means of facing the competition and surviving.

1.6.4 The accountability imperative

Companies are part of their communities and as such they must meet the political demands
for the companies to be more accountable and publicly demonstrate the high standards. TQM
supports the accountability imperative by promoting objective and measurable outcomes of
the production and operational process and provides mechanisms for quality improvement.
Quality improvement becomes increasingly important as organisations achieve greater
control over their own affairs. Greater freedom has to be matched by greater accountability.
Companies have to demonstrate that they are able to deliver what is required of them.

Failure to meet even one of these imperatives can jeopardise company’s well-being and
survival. If companies fail to provide the best services they risk losing customers who will
opt for one of their competitors. By regarding these drivers as anything less than imperatives
we risk the integrity of our profession and the future of our businesses. For companies and
businesses, quality improvement is no longer an option, it is a necessity.

1.7 Total Quality

Feigenbaum, one of the quality gurus, used the term ‘total quality’ for the first time in 1969
in a paper he presented at the first international conference on quality control held in Tokyo

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which was jointly organised by Japan, USA, and Europe. Total quality is an ideal state/goal
for an organisation to strive for. What this goal should look like in practice will vary for
different organisations. In general, total quality should facilitate the achievement of an
organisation’s purpose:

 To identify and meet the needs and expectations of its customers and other interested
parties (people in the organisation, suppliers, owners, society), to achieve competitive
advantage, and to do this in an effective and efficient manner, and
 To achieve, maintain, and improve overall organisational performance and
capabilities.

Accordingly, total quality does not only concern an organisation’s product or services, but
also the way these are produced, including the cooperation with other organisations and the
surrounding society. Furthermore, total quality is not a static condition. Customer demands
and societal standards are changing continuously, which in turn demands continuous
improvement of products, services and the way they are produced. Total quality is a moving
target. The term “the way they are produced” refers to the totality of an organisation’s
processes and structure.

MODULE 2:

TOTAL QUALITY MANAGEMENT (TQM)

2.0 Introduction

Total Quality Management (TQM) has been developed by a considerable number of people
and institutions in a number of countries. Most important are Japan and the USA. Most of the
work of quality and TQM can be traced to the work of gurus W. Edwards Deming and Joseph
Juran’s teachings and statistics in Japan during the 1950’s and the revolution that followed in
the United State of America (USA) in the 1980s to meet or preferably exceed customer
expectations. Common themes in quality management include consistency, perfection, waste
elimination, delivery speed and customer service.

2.1 What is total quality management?

Total quality management (TQM) is a management concept and a means to continuously

move the organisation towards a state of total quality.

TQM allows an organisation to pursue a definition of quality largely ascertained by

customers’ contentment with the services they have received.

Accordingly, TQM is used as the term for the management concept that shall manage a
process for continuous improvement needed to approach the ideal state of total quality. TQM
is now part of a much wider concept that addresses overall organisational performance and
recognises the importance of processes. To become a TQM company, organisation must
manage its processes, its suppliers, its customers, and must be able to eliminate poor

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practices. In essence, TQM is the integration of all functions and processes within an
organisation in order to achieve continuous improvement of the quality of goods and services.
The goal is customer satisfaction.

Feigenbaum, devised the term in 1961, who named it as total quality control (TQC). It
implies the application of quality principles right from identification of customer needs to
post purchase services. The objective of TQM is to build an organisation that produces
products or performs services that are considered as quality by those who use them. The
quality of a product or a service is the customer’s perception of the degree to which the
product or service meets their expectations.

TQM has been adopted as a management paradigm by many organisations worldwide.

Quality movement in across the world starts with quality improvements project at
manufacturing companies. But later it spread to other service institutions including banking;
insurance, non-profit organisations, health care, government and educational institutions.
TQM models, based on the teachings of quality gurus, generally involve a number of
“principles” or “essential elements” such as teamwork, top management leadership, customer
focus, employee involvement, continuous improvement tool, training etc. It is the process of
changing the fundamental culture of an organisation and redirecting it towards superior
product or service quality.

2.2 Essential elements of TQM

The concept of TQM also known as Total Quality Control (TQC) or Company Wide Quality
Control (CWQC) has been practiced in several organisations in the world particularly in
Japan. Organisations such as Toyota, Canon, Hewlett Packard, Suzuki, etc., have made a
phenomenal impact on the international market by implementing the processes of TQM in
their organisations. These have resulted in several benefits which include:

(i) Higher employee morale.

(ii) More efficient processes
(iii) Higher productivity
(iv) Less fire fighting resulting in more time for innovation and creativity
(v) Improved quality of products and services
(vi) Increased market share
(vii) Lower cost
(viii) Increased customer satisfaction
(ix) Higher profits

Apart from these, there have been several other benefits for organisations which have
implemented TQM. TQM as implemented in these organisations is seen to have the following
essential elements.

(i) Customer orientation

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Any organisation that is serious about quality and customers must take a systematic approach
to ensure a customer oriented work force. A committed and educated work force is a good
start but it also must have the right tools.

The organisation’s response towards the customer can be classified as reactive and
proactive.

Re-active implies:

 A system to manage and resolve customer complaints.

 Customer satisfaction surveys and follow up corrective action.
 Collection of product and service failure data, analysis and follow up corrective
action.

Pro-active, on the other hand, implies:

 Competitive bench marking to learn from world class companies

 Capturing the customers voice or needs for new products and services through
systematic processes such as quality function deployment (QFD), market surveys, etc.
 Constant interaction with the customer to know their views and needs.

The re-active approach is necessary to understand and resolve problems arising from current
products and services. The pro-active approach is essential to help influence and create new
products and services.

2.3 Obstacles and barriers to introducing and implementing TQM

TQM is hard work. It takes time to develop a quality culture. By themselves hard work and
time are two of the most formidable blocking mechanisms to quality improvement. TQM
needs a champion in the face of the numerous new challenges and changes facing
organisations. Quality improvement is a fragile process. All major changes are.

The following factors may put barriers in the TQM implementation effort

 Lack of Management Commitment

 Inability to change Organisational culture
 Improper planning
 Lack of continuous training and education
 Incompatible organisational structure and isolated individuals and departments
 Ineffective measurement techniques and lack of access to data and results
 paying inadequate attention to internal and external customers
 Inadequate use of empowerment and teamwork
 Failure to continually improve

2.4 Benefits of TQM:

The following are some of the benefits of TQM to an organisation

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 (i) Improved quality
(ii) Employee participation
(iii) Team work
(iv) Working relationships
(v) Customer satisfaction
(vi) Employee satisfaction
(vii) Productivity
(viii) Communication
(ix) Profitability
(x) Market share

MODULE 3:

DEVELOPMENT OF QUALITY MANAGEMENT

3.0 Introduction

The historical evolution of TQM has taken place in four stages. These can be categorised as
follows:

 Quality inspection
 Quality control
 Quality assurance
 Total quality management

3.1 Differences between quality control, quality assurance and total quality

As well as providing a definition of quality, it is necessary to understand the difference

between the three other important quality ideas. These are the distinctions made between
quality control, quality assurance and total quality.

Quality control is the oldest quality concept. It refers to the detection and elimination of
components or final products that are not up to standard. It is an after-the-event process
concerned with detecting and rejecting defective items. As a method of ensuring quality it
may involve a considerable amount of waste, scrap and reworking. Quality controllers or
inspectors usually carry out quality control. Inspection and testing are the most common
methods of quality control, and are widely used in organisations to determine whether
standards are being met.

Quality assurance is different from quality control. It is a before and during the event process
concerned to prevent faults occurring in the first place. Quality assurance is about designing
quality into the process to attempt to ensure that the product is produced to a predetermined
specification. Put simply, quality assurance is a means of producing defect- and fault-free
products. The aim in the words of Philip B Crosby is ‘zero defects’. Quality assurance is
about consistently meeting product specification or getting things right first time, every time.
The quality of the good or service is assured by there being a system in place, known as a

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quality assurance (QA) system, that lays down exactly how production should take place and
to what standards. Quality standards are maintained by following the procedures laid down in
the QA system. Quality assurance is the responsibility of the workforce, usually working in
quality circles or teams, rather than the inspector, although inspection can have a role to play
in quality assurance.

TQM incorporates quality assurance, and extends and develops it. TQM is about creating a
quality culture where the aim of every member of staff is to delight their customers, and
where the structure of their organisation allows them to do so. In TQM the customer is
sovereign. It is the approach popularised by Peters and Waterman (1982), and which has been
a constant theme of Tom Peters’ writings ever since. TQM is about providing the customer
with what they want, when they want it and how they want it. It involves moving with
changing customer expectations and fashions to design products and services that meet and
exceed their expectations. Only by delighting customers will they return and tell their friends
about it (this is sometimes called the sell-on definition of quality).

The perceptions and expectations of customers are recognized as being short term and fickle,
and so organisations have to find ways of keeping close to their customers to be able to
respond to their changing tastes, needs and wants.

MODULE 4:

THE WORK OF THE QUALITY GURUS/EXPERTS

4.0 Introduction

An extensive review of literature was carried out to identify the primary elements necessary
for the successful implementation of TQM. Over the past few decades, writers such as
Deming, Crosby, Juran, Feigenbaum, Ishikawa, Taguchi and others have developed certain
propositions in the area of quality management. Their insights into quality management
provide a good understanding of quality management principles. An example of one such
proposition is: quality is a responsibility of the whole organisation, rather than of the quality
department. There are many such propositions covering different aspects of quality
management practices. The following sections present the main ideas proposed by these
quality gurus.

4.1 W. Edwards Deming

W. Edward Deming saw the problem of quality lying primarily with management. This was
an important insight because the dominant view of the time was that quality issues were the
workers’ fault. Shoddy workmanship was often blamed for quality problems. Deming
showed that not only was a blame culture counterproductive, but if blame had to be
apportioned it lay with management…..He shifted blame from workers to the mgt.

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The basic cause of industrial quality problems, according to Deming, was the failure of senior
management to plan ahead. They controlled the resources available to the company and
through their policies had the major impact on its culture. Through their actions they were
responsible for the quality of the products they produced.

Deming is widely regarded as the master who developed Japan’s “road map” to quality. The
road map is basic, simple, consists of readily available technology, and relies on common
sense. Deming defines quality as “satisfying the customer, not merely to meet his
expectations, but to exceed them”. Deming’s philosophy thus starts and finishes with the
customer. The means to improve quality lie in the ability to control and manage systems and
processes properly, and the role of management responsibilities in achieving this. Deming is
associated with statistical process control and other problem-solving methods which aim to
improve processes and reduce the inevitable variation which occurs from “common causes”
and “special causes” in production. “Common causes” of variations are systemic and are
shared by many operators, machines or products. They include poor product design, non-
conforming incoming materials, and poor working conditions. These are the responsibilities
of management. “Special causes” relate to the lack of knowledge or skill or poor
performance. These are the responsibilities of employees.

As mentioned above, Deming stresses the responsibilities of top management to take the lead
in changing processes and systems. Top management is responsible for most quality
problems. Management should give employees clear standards for what is considered
acceptable work, and provide the methods to achieve it. These methods include the
appropriate working environment and climate for work - free of fault finding, blame or fear.
Deming also strongly promotes employee participation.

To provide a guide to how to manage for quality, Deming produced his famous 14 points.
They were a mixture of important management principles and insights into employee
psychology. They were his blueprints for the development of a quality culture. Deming’s
emphasis throughout was on prevention rather than cure.

Deming’s 14 blueprints for the development of a quality culture

(i) Create a constancy of purpose to improve products and services - take a longer
term view, and innovate;
(ii) Adopt the new philosophy - accept the management style which promotes
constant improvement;
(iii) Cease dependence on mass inspection - concentrate on improving processes;
(iv) End the practice of awarding business on the basis of price tag alone, building up
relationships with fewer suppliers to understand jointly specifications of and uses
for materials and other inputs;
(v) Constantly and forever improve the system - search continually for problems in all
processes. It is management’s job to work on the system;
(vi) Institute modern methods of training on the job for all, to make the best use of
every employee;

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 (vii) Institute modern methods of supervision - managers to focus on quality not
numbers;
(viii) Drive out fear - so that people work more effectively;
(ix) Break down barriers between departments – team working to tackle problems;
(x) Eliminate numerical goals for the workforce - eliminate slogans and exhortation,
make reasonable requests of the workforce;
(xi) Eliminate work standards and numerical quotas - focus on quality and provide
support;
(xii) Remove barriers that rob workers of pride in their work - for example, defective
materials, poor tools, lack of management support;
(xiii) Institute a vigorous program of education and training - for continual updating and
improvement;
(xiv) Create a top management structure to push every day on the above 13 points. Top
management commitment is where it begins and ends.

The 14 points are Deming’s unique contribution to the understanding of quality. In addition,
Deming also developed a guide to the barriers that stand in the way of quality
improvement—He called it the ‘seven deadly diseases’. However, Deming believes that the
sixth and seventh diseases were peculiar to industries in the US.

The first disease Deming called the Lack of constancy of purpose to plan product and
service that will have a market and keep the company in business, and provide jobs. He
believed that this is the most crippling disease in an organisation. It not only prevents many
organisations adopting quality as a management objective but it inhibits the development of a
clear vision. Without constancy of purpose it is difficult to motivate and enthuse the
workforce. It is linked closely with his second barrier— Emphasis on short-term profits:
short-term thinking (just the opposite from constancy of purpose to stay in business), fed by
fear of unfriendly takeover, and by push from bankers and owners for dividends. The
switching of the emphasis to a long-term vision and the development of a culture of
improvement are what he advocates in its place. Organisations will find much that is familiar
in Deming’s emphasis on the need for a long-term coherent strategy.

The third deadly disease concerns the evaluation of an individual’s performance through
merit ratings or annual review. Deming opposed performance appraisal schemes, and has
argued that they lead to short term solutions and under-performance. Inevitably, appraisal has
to be based on measurable outcomes and often these provide a misleading view of what is
important in the process. He did not believe that the quality of an employee’s contribution
could be reduced to measurable results. He also believed that, rather than improving
performance, appraisal often has the opposite effect, with staff concentrating on what was
important for gaining a good performance rating rather than developing a pride in their work.
He believed that performance appraisal had the effect of putting staff in competition with
each other rather than welding them into teams.

Organisations that intend to pursue TQM will need to consider very carefully how to blend it
with externally imposed schemes of appraisal. Merely because Deming is an opponent of

15
appraisal does not mean that the two are incompatible, but it does require that special
consideration is given to the way appraisal is conducted to ensure that it does not lead to the
effects abhorred by Deming. The compromise is to ensure that appraisal is always a positive
and a developmental process and does not lead to competition between staff.

His fourth deadly disease is mobility of management; job hopping. Deming contrasts
excessive turnover of executive talent in the West with the stability of employment in
Japanese companies. Certainly organisations that experience high rates of teacher turnover
fully appreciate the impossibility of maintaining any long-term consistency of purpose. The
fifth of his barriers to quality is management by use only of visible figures, with little or
no consideration of figures that are unknown or unknowable. Deming is concerned that
organisations that try to measure success through performance indicators may forget that the
real measure of success is happy, satisfied customers.

The sixth deadly management disease is excessive medical costs, while the seventh is
excessive costs of liability, swelled by lawyers that work on contingency fees.

4.2 Joseph M. Juran

Born in 1904, Dr Joseph Juran, along with Deming, is the other main veteran pioneer of the
quality revolution. Like Deming, he was until recently more highly regarded in Japan than in
his native United States. In 1981 the Emperor of Japan awarded him the prestigious Second
Order of the Sacred Treasure, the highest order awarded to non-Japanese. Juran is the
author and editor of a number of books, including Juran’s Quality Control Handbook, Juran
on Planning for Quality and Juran on Leadership for Quality. In the first edition of the
Quality Control Handbook, published in the 1950s, he used his now famous words ‘there is
gold in the mine!’

He is probably most renowned for coining the phrase ‘fitness for use or purpose’. The
importance of this idea is that a product or service can meet its specification and yet not
be fit for its purpose. The specification may be faulty or it may not accord with what the
customer wants. Meeting specifications may be a necessary condition of quality in most
instances but it is not a sufficient one. He believed, like Deming, that most quality problems
are traceable back to management decisions. He believed that poor quality is usually the
result of poor management.

Juran considers quality management as three basic processes (Juran Trilogy): quality
planning, quality control, and quality improvement. Juran defines quality as “Quality is
customer satisfaction” or “Fitness for use”.

In his view, the approach to managing for quality consists of:

(i) The sporadic problem is detected and acted upon by the process of quality control;
(ii) The chronic problem requires a different process, namely, quality improvement;
(iii) Such chronic problems are traceable to an inadequate quality planning process.

16
Like Deming, Juran believes most quality problems are due to management, not employees.
He also states that the distinction between chronic and sporadic problems is essential because
there are two different approaches to handling the problems.

Chronic problems require the principle of “breakthrough”, while sporadic problems

require the principle of “control”.

He further elaborates the sequence of activities required for “breakthrough” and “control”.
These are respectively as follows:

Breakthrough activities (quality improvement) include:

(i) Breakthrough in attitudes - convincing those responsible that a change in quality

level is desirable and feasible;
(ii) Discovery of the vital few projects - determining which quality problem areas are
important;
(iii) Organising for breakthrough in knowledge - defining the organisational
mechanism for obtaining the knowledge for achieving a breakthrough;
(iv) Creation of a steering arm - defining and staffing a mechanism for directing the
investigation for quality improvement;
(v) Creation of a diagnostic arm - defining and staffing a mechanism for executing the
technical investigation;
(vi) Diagnosis - collecting and analysing the facts required and recommending the
action needed;
(vii) Breakthrough in cultural pattern - determining the effect of a proposed change on
the people involved and finding ways to overcome resistance to change;
(viii) Breakthrough in performance - obtaining agreement to take action;
(ix) Transition to the new level - implement the change.

Control activities include:

(i) Choosing the control subject: i.e., choosing what we intend to regulate;
(ii) Choosing a unit of measure;
(iii) Setting a goal for the control subject;
(iv) Creating a sensor which can measure the control subject in terms of the unit of
measure;
(v) Measuring actual performance;
(vi) Interpreting the difference between actual performance and the goal;
(vii) Taking action (if any) on the difference.

Using the Pareto principle, Juran believed that 80 per cent of an organisation’s quality
problems are the result of management controllable defects. Putting the systems right often
means putting the quality right. It follows from this that 80 per cent of problems lie with
management, as they have control of 80 per cent of the systems in an organisation.

4.2.1 Strategic quality management

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Juran believed that quality does not just happen, it has to be planned. To assist managers in
planning quality, Juran developed an approach that he called Strategic Quality
Management (SQM). SQM is a three-part process based on staff at different levels making
their own unique contributions to quality improvement. Senior management has the strategic
view of the organisation, middle managers take an operational view of quality, while the
workforce is responsible for quality control.

This is an idea that has a ready application to organisations. Senior managers and governors
take the lead in strategic quality management by setting out the organisation’s vision,
priorities and policies. Middle managers take responsibility for quality assurance, which
involves them in coordinating information from their teams, systematically checking on
effectiveness, and transmitting the results of monitoring to senior management. Workers
operating in teams exercise quality control. They can design the characteristics and standards
of products and services so that they conform to the needs of their customers.

The Juran Institute, which provides consultancy based on Juran’s principles, preaches a
project-by-project, team-solving approach to quality planning. Quality planning leads to
quality improvement and only has meaning in practical application. Juran has said that ‘All
quality improvement takes place project by project and in no other way’. Juran developed a
road map to quality planning, which consists of the following steps:

(i) Identify who are the customers.

(ii) Determine the needs of those customers.
(iii) Translate those needs into our language. (what we speak always)
(iv) Develop a product that can respond to those needs.
(v) Optimise the product features so as to meet our needs as well as customer needs.
(vi) Develop a process that is able to produce the product.
(vii) Optimise the process.
(viii) Prove that the process can produce the product under operating conditions.
(ix) Transfer the process to operations.

Juran in his writing believed that there are no shortcuts to quality. He was sceptical of
companies that applied the Japanese model of quality circles. He doubted their effectiveness
in the West. Rather he believed that the majority of quality problems are the fault of poor
management, rather than poor craftsmanship. He did not believe that employees were
responsible, in the main, for poor quality. In general, he believed that management-
controllable defects account for over 80 per cent of all quality problems.

4.3 Philip B. Crosby—Quality is Free

Philip Crosby was a graduate of the Western Reserve University in the United States. After
naval service in the Korean War he held a variety of quality control jobs, the first being as a
line inspector. He was a quality manager on the first Pershing missile programme and later
joined the International Telephone and Telegraph Company (ITT), where for 14 years he was
Corporate Vice President and Director of Quality. In 1979 Crosby published his most famous

18
book Quality is Free. Following its success he set up Philip Crosby Associates
Incorporated and The Quality College in Florida where he taught organisations how to
manage and improve quality. Crosby also published Quality Without Tears in 1984 as well
as a string of other management books.

Crosby defines quality as “conformance to requirements.” The requirements of a product

need to be defined and specified clearly so that they are properly understood. His maxim is
that higher quality reduces costs and raises profits. Quality cost is used as a tool to help
achieve that goal. Quality is measured by the quality cost. His categories of quality costs
are similar to those of Juran – prevention, appraisal and failure. The aim is zero defects, of
getting it right first time. This requires an emphasis on prevention rather than after-the-fact
inspection. Crosby also presents the quality management maturity grid which may be used
by organisations to assess their quality management maturity. The five stages are
uncertainty, awakening, enlightenment, wisdom, and certainty. These can be used to
assess progress on a number of “measurement categories”, such as management
understanding and attitude, the status of quality in the organisation, problem handling, cost of
quality as a percentage of sales, quality improvement actions. The quality management
maturity grid and the cost of quality measures are the two main tools for managers to assess
the seriousness of their quality problems.

Crosby’s name is associated with two very appealing and powerful ideas.

The first is that quality is free. This very powerful idea is premised on the idea that savings
from quality improvement programmes pay for themselves. The second idea most
associated with him is the notion that errors, failures, waste and delay—all the ‘unquality
things’—can be totally eliminated if the organisation has the will. This is his
controversial notion of zero defects. Both ideas are very appealing in organisations. The idea
that quality improvement can pay for itself and can lead to an elimination of failure is one
that few organisations can ignore. Crosby, like all the other gurus, is at great pains to
emphasise that the route to zero defects is difficult although achievable one. As he has
written, ‘Quality is free, it’s not a gift, but it is free. What costs money are all the
unquality things—all the actions that involve not doing jobs right the first time.

Crosby’s improvement programme is one of the most practical and detailed guides available.
Unlike Deming’s more philosophical approach, Crosby’s model can be followed as a plan of
action. Crosby was a popularist writer and his approach is essentially practical. In Quality Is
Free, Crosby outlines his view that a systematic drive for quality will pay for itself. He says
that it is non-conformance problems that lead to scrap, rework, refits, tests and
inspection. These are the costs of quality. Savings come from doing things right.

4.3.1 Zero defects

Zero defects are Crosby’s major, but controversial, contribution to thinking on quality. It is a
powerful idea. It is the commitment to success and the elimination of failure. It involves
putting systems in place that ensure that things are always done in the right way first time

19
and every time. Crosby argues that aiming for zero defects, in a business context, will
increase profits by saving on costs. The impact of quality on the bottom line is what makes
Crosby’s model so attractive. Crosby does not believe in statistically acceptable levels of
quality. For Crosby there is only one standard, and that is perfection. However, not all
commentators agree with this thesis. For example, Joseph Juran, a critic of Crosby, argues
that, after a certain point, conforming to requirements can actually impose additional costs
and as a result he does not believe that zero defects is an attainable goal.

Zero defects is a concept which is harder to apply to services than to manufacturing. In

services zero defects are desirable, but it is difficult to guarantee fault-free service with so
many opportunities for human error. Nevertheless, zero defects are an important service-
industry goal. The task of quality improvement in organisations would be building the
systems and structures to ensure that this happened.

4.3.2 Crosby’s improvement programme

The essential first step in a quality programme, according to Crosby, is Management

Commitment. This is crucial to the success of any quality initiative. The quality initiative
must be sanctioned and led by senior management. Crosby suggests that this commitment be
communicated in a quality policy statement, which needs to be short, clear and accessible.
The second step builds on the commitment with the setting up of a Quality Improvement
Team. Since every function within the organisation is a potential contributor to defects and
quality failures, it follows that every part of the organisation must participate in the
improvement effort. The Quality Improvement Team has the task of setting and directing the
programme that will be implemented across the organisation. This team does not do all th e
quality work. The task of implementing improvements is the responsibility of teams within
individual departments. The plan that the Quality Improvement Team draws up must be
accepted and endorsed by senior management.

An important task of the Quality Improvement Team is to decide how to specify quality
failure and improvement, and this leads into Step three, Quality Measurement. It is
important to be able to measure the current and potential non- conformance in such a manner
that it permits objective evaluation and corrective action. The types of measurement vary
between manufacturing and service organisations and, typically, they include data from
inspection and test reports, statistical data, and feedback data from customers. A major
contributor to quality measurement is provided in Step four quantifying The Cost of
Quality. The cost of quality consists of such things as the cost of things going wrong,
rework, scrap, having to do things again, inspection, and testing. It is important to be able to
identify the costs of quality and to put a value on them.

Step five in Crosby’s steps to quality is the building of Quality Awareness. It is necessary to
raise the awareness of everyone within the organisation of the costs of quality and the need to
implement a quality improvement programme. This requires regular meetings between
management and employees to discuss specific problems and means of overcoming them.
Information about the quality programme needs to be communicated. Crosby does not go for

20
the big-bang approach to introducing quality. He argues that quality awareness should be low
key and linked to a constant stream of events. Once awareness has been raised it is possible to
move on to Step six, Corrective Action.

Supervisors need to work with staff to eliminate poor quality. A systematic methodology is
required to deal with problems. Crosby suggests setting up a series of task teams with a
carefully constructed agenda for action. Reports of the task teams should be fed up the chain
of command in a regular series of meetings. To decide which problem to tackle first he
suggests applying the Pareto rule. This suggests that 20 per cent of the processes cause 80 per
cent of the problems. The biggest problem needs to be tackled first, followed by the next
most important and so on. One way of highlighting the improvement process is through Step
seven, Zero Defects Planning. Crosby argues that a zero defects programme should be
introduced and led by the Quality Improvement Team, which is also responsible for its
implementation. He argues that all staff should sign a formal contract or pledge to work
towards zero defects.

Step eight emphasises the need for Supervisor Training. It is important that all managers
understand their role in the improvement process and this is carried out through a formal
training programme. This is particularly important for staff carrying out crucial middle-
management roles. Step nine is the holding of a Zero Defects Day. This is a day-long event
that establishes the idea of zero defects and informs employees that there has been a change.
This is essentially a jamboree to highlight and celebrate the work being carried out on quality
and to emphasise the management’s commitment to it. It has a more serious side, which is
staff development.

Step ten is Goal Setting. Once the pledges to work towards zero defects have been made and
the idea has been launched on Zero Defects Day, it is important that individual action plans
are completed. The goals which teams set themselves must be specific and measurable. Goal
setting leads naturally into Step 11, Error-Cause Removal. There needs to be a means by
which individual employees can communicate to management the situations that make the
pledges difficult to implement. This is best achieved by designing a standard form that goes
to the appropriate line manager. All such forms must receive a reply within a particular time
period.

It is important to appreciate those who participate in the improvement exercises, Crosby says
in his twelfth step, Recognition. People, he argues, do not work for money, and once their
salary is established something more important takes over. What staff need is recognition of
their achievement and contribution. Crosby argues that the recognition needs to be linked to
previously set goals. The awards can be prizes or certificates. Recognition, not money, is
what is important.

Crosby’s step 13 is the establishment of Quality Councils. This is an institutional structure

also favoured by Juran. It is important to bring the quality professionals together to decide
how problems can best be tackled. Inspectors and quality controllers need a consistent and
professional approach to their work. Part of the role of the Quality Council is to monitor the

21
effectiveness of the programme and to ensure that the improvement process continues—
which is emphasised in Step 14, Do It Over Again. The quality programme never ends.
Once goals are reached, the programme needs to start over again.

Crosby claims “mistakes are caused by two factors: lack of knowledge and lack of attention”.
Education and training can eliminate the first cause, and a personal commitment to excellence
(zero defects) and attention to detail will cure the second.

4.4 Tom Peter

Tom Peters is another US national. He is primarily a management theorist whose views was
on quality. Peters graduated in engineering and business and spent the early part of his career,
like Crosby, in the United States Navy. He was a principal at the consultants McKinsey and
Co when he began researching his most famous book In Search of Excellence, written with
Robert Waterman, which was published in 1982. In it they researched the secrets of the
United States’ most successful organisations. His second book, A Passion for Excellence,
written with Nancy Austin, was published in 1985. He has subsequently published a string of
successful books, including Thriving on Chaos (1987) and Liberation Management
(1992).

4.4.1 Peters on leadership

In a Passion for Excellence with co-author Nancy Austin, Peters identified leadership as
being central to the quality improvement process. Importantly, they considered that the term
‘management’ should be discarded in favour of ‘leadership’. For them the leader was to be a
facilitator and the person with vision motivating the rest of the team. They championed
hands-on leadership styles and characterised it with their famous Managing by Walking
About (MBWA). Such leadership styles enable leaders to keep in touch with customers and
staff and they believe that it leads to innovative and creative ideas.

Peters and Austin call MBWA the technology of the obvious and believe that the effective
leader, by practising MBWA, is able to pursue the following important characteristics:

 listening to staff, which shows that he/she cares;

 teaching and transmitting values;
 facilitating and giving on-the-spot help and advice.

Peters is well known for his views on customer orientation. In ‘Thriving on Chaos’, he
describes 12 attributes, or traits, of the quality revolution that all organisations need to
pursue.

The 12 attributes or traits of the quality revolution

(i) A management obsession with quality—Peters stresses the importance of practical

action to back up the emotional commitment to quality, e.g. halving the number of
reworks, never walking past shoddy (substandard) goods.

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 (ii) Passionate systems—for Peters, failure is invariably due to passion without system, or
system without passion. He believes that both system and passion are necessary.
(iii) Measurement of quality—this is an essential element; it should begin at the
outset of any quality programme and should be carried out by the participants
themselves.
(iv) Quality is rewarded—Peters believes that financial incentives can boost
quality improvement.
(v) Everyone is trained for quality—Peters believes that every person in an organisation
should be extensively trained. Training should include cause and effect analysis,
statistical process control, and teamwork.
(vi) Multi-function teams—quality circles, cross-functional teams or corrective
action teams should be introduced.
(vii) Small is beautiful—Peters does not believe that there is any such thing as a
small improvement. All improvements are significant.
(viii) Create endless ‘Hawthorne effects’—he believes in getting things going with
new goals, new themes and new events.
(ix) organisational structure should be devoted to quality improvement—this he
describes as the creation of shadow quality teams and emphasises that it is a route
through which hourly paid workers can progress.
(x) Everyone is involved—suppliers, distributors and customers are all part of the
organisation’s quality process. Joint improvement teams may be formed.
(xi) When quality goes up, costs go down—quality improvement is the primary
source of cost reduction.
(xii) Quality improvement is a never-ending journey—all quality is relative. Each
day all products or services are either getting relatively better or worse, but never
stand still.

4.5 Kaoru Ishikawa

Kaoru Ishikawa was born in 1915. He was a graduate in engineering from Tokyo University.
He obtained his doctorate in engineering and became Professor at Tokyo University in 1960.
He was awarded the Deming Prize for his writings on total quality control. His most famous
book What is Total Quality Control? The Japanese Way was published in 1985. He died
in 1989.

Kaoru Ishikawa is most famous for his work on quality circles and was a pioneer of the
Quality Circle movement in Japan in the early 1960s. In his work, like all other gurus, he
emphasises the importance of education. He states that quality begins and ends with
education. He has been associated with the development and advocacy of universal education
in the seven quality control tools.

The seven quality control tools by Kaoru Ishikawa

(i) Process flow chart;

(ii) Check sheet;

23
 (iii) Histogram;
(iv) Pareto chart;
(v) Cause - effect diagram (Ishikawa diagram);
(vi) Scatter diagram;
(vii) Control chart.

He is also well known for his statistical techniques, including the fishbone or Ishikawa
diagrams.

Ishikawa’s concept of total quality control contains six fundamental principles:

(i) Quality first - not short-term profits first;

(ii) Customer orientation - not producer orientation;
(iii) The next step is your customer - breaking down the barrier of sectionalism;
(iv) Using facts and data to make presentations - utilisation of statistical methods;
(v) Respect for humanity as a management philosophy, full participatory
management;
(vi) Cross - functional management.

4.5.1 Quality circles

One major characteristic of Japanese company-wide quality control is the quality circle. The
quality circle is probably the most well-known Japanese contribution to quality management.
The quality circle movement, associated with Ishikawa, started in 1962 in the Nippon
Telegraph and Telephone Public Corporation. It spread to banks and retailing and has been
exported worldwide. Success in the West has not been so extensive as in Japan, however,
although even there it has been shown to have limitations. In Japan a quality circle is
typically a voluntary group of usually five to a dozen staff all from the same workshop.

They meet regularly and are led by a foreman, team leader or one of the workers. Their aim is
to contribute to the improvement and development of the enterprise and to build a happy
workforce.

Quality circles are about using human capabilities to the full.

Typically, members of quality circles master statistical quality control and related methods
and utilise them to achieve significant results in quality improvement, cost reduction,
productivity and safety. They are all taught the seven tools of quality control—Pareto charts,
cause and effect diagrams, stratification, check sheets, histograms, scatter diagrams and
Shewhart’s control charts and graphs. All members of the circle engage in self and team
development.

They receive no direct financial reward for any improvements they make. Even in Japan
many quality circles have foundered (sank). This is usually because of lack of management
interest or the opposite—excessive intervention. However, many more have been successful.
Many commentators, including Philip Crosby, have warned against the fashion for quality

24
circles as a cure-all for poor staff motivation or inadequate quality and productivity in either
manufacturing or service industries.

Joseph Juran has gone further and expressed doubts on their effectiveness in the West. He
believes that the industrial culture is different. In western approaches to quality improvement
the quality circle is replaced by teamwork.

MODULE 5

Lean Manufacturing
Lean manufacturing is a method of manufacturing goods aimed primarily at reducing times
within the production system as well as response times from suppliers and customers. It is
closely related to another concept called just-in-time manufacturing (JIT manufacturing in
short). Just-in-time manufacturing tries to match production to demand by only supplying
goods that have been ordered and focus on efficiency, productivity (with a commitment to
continuous improvement), and reduction of "wastes" for the producer and supplier of goods.
Lean manufacturing adopts the just-in-time approach and additionally focuses on reducing
cycle, flow, and throughput times by further eliminating activities that do not add any value
for the customer. Lean manufacturing also involves people who work outside of the
manufacturing process, such as in marketing and customer service.
Lean manufacturing is particularly related to the operational model implemented in the post-
war 1950s and 1960s by the Japanese automobile company Toyota called the Toyota
Production System (TPS), known in the US as "The Toyota Way". Toyota's system was
erected on the two pillars of just-in-time inventory management and automated quality
control. The seven "wastes" (muda in Japanese), first formulated by Toyota engineer Shigeo
Shingo, are the waste of superfluous inventory of raw material and finished goods, the waste
of overproduction (producing more than what is needed now), the waste of over-processing
(processing or making parts beyond the standard expected by customer), the waste of
transportation (unnecessary movement of people and goods inside the system), the waste of
excess motion (mechanizing or automating before improving the method), the waste of
waiting (inactive working periods due to job queues), and the waste of making defective
products (reworking to fix avoidable defects in products and processes).

The term Lean was coined in 1988 by American businessman John Krafcik in his article
"Triumph of the Lean Production System," and defined in 1996 by American researchers
James Womack and Daniel Jones to consist of five key principles: "Precisely specify value by

25
specific product, identify the value stream for each product, make value flow without
interruptions, let customer pull value from the producer, and pursue perfection."

Companies employ the strategy to increase efficiency. By receiving goods only as they need
them for the production process, it reduces inventory costs and wastage, and increases
productivity and profit. The downside is that it requires producers to forecast demand
accurately as the benefits can be nullified by minor delays in the supply chain. It may also
impact negatively on workers due to added stress and inflexible conditions. A successful
operation depends on a company having regular outputs, high-quality processes, and reliable
suppliers.

History
Fredrick Taylor and Henry Ford documented their observations relating to these topics, and
Shigeo Shingo and Taiichi Ohno applied their enhanced thoughts on the subject at Toyota in
the late 1940s after World War II. The resulting methods were researched in the mid-20th
century and dubbed Lean by John Krafcik in 1988, and then were defined in The Machine
that Changed the World and further detailed by James Womack and Daniel Jones in Lean
Thinking (1996).
Japan: the origins of Lean
The exact reasons for the adoption of just-in-time manufacturing in Japan are unclear, some
people suggest it started with a requirement to solve the lack of standardization, which is not
the complete story nor the actual reason. Japanese companies needed an immediate solution
to the extreme situation they were living in after World War II. American supply chain
specialist Gerhard Plenert has offered four quite vague reasons, paraphrased here. During
Japan's post–World War II rebuilding (of economy, infrastructure, industry, political, and
social-emotional stability):
Japan's lack of cash made it difficult for industry to finance the big-batch, large inventory
production methods common elsewhere.
Japan lacked space to build big factories loaded with inventory.
The Japanese islands lack natural resources with which to build products.
Japan had high unemployment, which meant that labor efficiency methods were not an
obvious pathway to industrial success.
Thus, the Japanese "leaned out" their processes. "They built smaller factories ... in which the
only materials housed in the factory were those on which work was currently being done. In
this way, inventory levels were kept low, investment in in-process inventories was at a
minimum, and the investment in purchased natural resources was quickly turned around so
that additional materials were purchased." Plenert goes on to explain Toyota's key role in
developing this lean or just-in-time production methodology.

26
American industrialists recognized the threat of cheap offshore labor to American workers
during the 1910s and explicitly stated the goal of what is now called lean manufacturing as a
countermeasure. Henry Towne, past president of the American Society of Mechanical
Engineers, wrote in the foreword to Frederick Winslow Taylor's Shop Management (1911),
"We are justly proud of the high wage rates which prevail throughout our country, and jealous
of any interference with them by the products of the cheaper labor of other countries. To
maintain this condition, to strengthen our control of home markets, and, above all, to broaden
our opportunities in foreign markets where we must compete with the products of other
industrial nations, we should welcome and encourage every influence tending to increase the
efficiency of our productive processes."

Continuous production improvement and incentives for such were documented in Taylor's
Principles of Scientific Management (1911):
Whenever a workman proposes an improvement, it should be the policy of the management
to make a careful analysis of the new method, and if necessary, conduct a series of
experiments to determine accurately the relative merit of the new suggestion and of the old
standard. And whenever the new method is found to be markedly superior to the old, it should
be adopted as the standard for the whole establishment.
After a workman has had the price per piece of the work, he is doing lowered two or three
times as a result of his having worked harder and increased his output, he is likely entirely to
lose sight of his employer's side of the case and become imbued with a grim determination to
have no more cuts if soldiering [marking time, just doing what he is told] can prevent it.
Shigeo Shingo cites reading Principles of Scientific Management in 1931 and being greatly
impressed to make the study and practice of scientific management his life's work.
Shingo and Taiichi Ohno were key to the design of Toyota's manufacturing process.
Previously a textile company, Toyota moved into building automobiles in 1934. Kiichiro
Toyoda, the founder of Toyota Motor Corporation, directed the engine casting work and
discovered many problems in their manufacturing, with wasted resources on the repair of
poor-quality castings. Toyota engaged in intense study of each stage of the process. In 1936,
when Toyota won its first truck contract with the Japanese government, the processes
encountered new problems, to which Toyota responded by developing Kaizen improvement
teams, which into what has become the Toyota Production System (TPS), and subsequently
The Toyota Way.
Levels of demand in the postwar economy of Japan were low; as a result, the focus of mass
production on lowest cost per item via economies of scale had little application. Having
visited and seen supermarkets in the United States, Ohno recognized that the scheduling of
work should not be driven by sales or production targets but by actual sales. Given the
financial situation during this period, over-production had to be avoided, and thus the notion

27
of "pull" (or "build-to-order" rather than target-driven "push") came to underpin production
scheduling.

Evolution in the rest of the world

Just-in-time manufacturing was introduced in Australia in the 1950s by the British Motor
Corporation (Australia) at its Victoria Park plant in Sydney, from where the idea later
migrated to Toyota. News about just-in-time/Toyota production system reached other western
countries from Japan in 1977 in two English-language articles: one referred to the
methodology as the "Ohno system", after Taiichi Ohno, who was instrumental in its
development within Toyota. The other article, by Toyota authors in an international journal,
provided additional details. Finally, those and other publicity were translated into
implementations, beginning in 1980 and then quickly multiplying throughout industry in the
United States and other developed countries. A seminal 1980 event was a conference in
Detroit at Ford World Headquarters co-sponsored by the Repetitive Manufacturing Group
(RMG), which had been founded 1979 within the American Production and Inventory
Control Society (APICS) to seek advances in manufacturing. The principal speaker, Fujio
Cho (later, president of Toyota Motor Corp.), in explaining the Toyota system, stirred up the
audience, and led to the RMG's shifting gears from things like automation to
just-in-time/Toyota production system.

At least some of audience's stirring had to do with a perceived clash between the new just-in-
time regime and manufacturing resource planning (MRP II), a computer software-based
system of manufacturing planning and control which had become prominent in industry in
the 1960s and 1970s. Debates in professional meetings on just-in-time vs. MRP II were
followed by published articles, one of them titled, The Rise and Fall of Just-in-Time". Less
confrontational was Walt Goddard's, "Kanban Versus MRP II—Which Is Best for You?" in
1982. Four years later, Goddard had answered his own question with a book advocating just-
in-time. Among the best known of MRP II's advocates was George Plossl, who authored two
articles questioning just-in-time's kanban planning method and the "japanning of America".
But, as with Goddard, Plossl later wrote that "JIT is a concept whose time has come".
Just-in-time/TPS implementations may be found in many case-study articles from the 1980s
and beyond. An article in a 1984 issue of Inc. magazine relates how Omark Industries (chain
saws, ammunition, log loaders, etc.) emerged as an extensive just-in-time implementer under
its US home-grown name ZIPS (zero inventory production system). At Omark's mother plant
in Portland, Oregon, after the work force had received 40 hours of ZIPS training, they were
"turned loose" and things began to happen. A first step was to "arbitrarily eliminate a week's
lead time [after which] things ran smoother. 'People asked that we try taking another week's
worth out.' After that, ZIPS spread throughout the plant's operations 'like an amoeba.'" The
article also notes that Omark's 20 other plants were similarly engaged in ZIPS, beginning
with pilot projects. For example, at one of Omark's smaller plants making drill bits in Mesabi,
Minnesota, "large-size drill inventory was cut by 92%, productivity increased by 30%, scrap

28
and rework ... dropped 20%, and lead time ... from order to finished product was slashed from
three weeks to three days." The Inc. article states that companies using just-in-time the most
extensively include "the Big Four, Hewlett-Packard, Motorola, Westinghouse Electric,
General Electric, Deere & Company, and Black and Decker".
By 1986, a case-study book on just-in-time in the U.S. was able to devote a full chapter to
ZIPS at Omark, along with two chapters on just-in-time at several Hewlett-Packard plants,
and single chapters for Harley-Davidson, John Deere, IBM-Raleigh, North Carolina, and
California-based Apple Inc., a Toyota truck-bed plant, and New United Motor Manufacturing
joint venture between Toyota and General Motors.
Two similar, contemporaneous books from the UK are more international in scope. One of
the books, with both conceptual articles and case studies, includes three sections on just-in-
time practices: in Japan (e.g., at Toyota, Mazda, and Tokagawa Electric); in Europe (jmg
Bostrom, Lucas Electric, Cummins Engine, IBM, 3M, Datasolve Ltd., Renault, Massey
Ferguson); and in the US and Australia (Repco Manufacturing-Australia, Xerox Computer,
and two on Hewlett-Packard). The second book, reporting on what was billed as the First
International Conference on just-in-time manufacturing, includes case studies in three
companies: Repco-Australia, IBM-UK, and 3M-UK. In addition, a day two keynote address
discussed just-in-time as applied "across all disciplines, ... from accounting and systems to
design and production".
Rebranding as "lean"
John Krafcik coined the term Lean in his 1988 article, "Triumph of the Lean Production
System". The article states:
(a) Lean manufacturing plants have higher levels of productivity/quality than non-Lean and
(b) The level of plant technology seems to have little effect on operating performance.
According to the article, risks with implementing Lean can be reduced by developing a well-
trained, flexible workforce, product designs that are easy to build with high quality, and a
supportive, high-performance supplier network.
Middle era and to the present
Three more books which include just-in-time implementations were published in 1993, 1995,
and 1996, which are start-up years of the lean manufacturing/lean management movement
that was launched in 1990 with publication of the book, The Machine That Changed the
World. That one, along with other books, articles, and case studies on lean, were supplanting
just-in-time terminology in the 1990s and beyond. The same period, saw the rise of books
and articles with similar concepts and methodologies but with alternative names, including
cycle time management, time-based competition, quick-response manufacturing, flow, and
pull-based production systems.
There is more to just-in-time than its usual manufacturing-centered explication. Inasmuch as
manufacturing ends with order-fulfillment to distributors, retailers, and end users, and also
includes remanufacturing, repair, and warranty claims, just-in-time's concepts and methods
have application downstream from manufacturing itself. A 1993 book on "world-class

29
distribution logistics" discusses kanban links from factories onward, and a manufacturer-to-
retailer model developed in the U.S. in the 1980s, referred to as quick response, has morphed
over time to what is called fast fashion.
Methodology
The strategic elements of lean can be quite complex, and comprise multiple elements. Four
different notions of lean have been identified:
i. Lean as a fixed state or goal (being lean)
ii. Lean as a continuous change process (becoming lean)
iii. Lean as a set of tools or methods (doing lean/toolbox lean)
iv. Lean as a philosophy (lean thinking)

The other way to avoid market risk and control the supply efficiently is to cut down in stock.
P&G has completed their goal to co-operate with Walmart and other wholesales companies
by building the response system of stocks directly to the suppliers companies.
In 1999, Spear and Bowen identified four rules which characterize the "Toyota DNA":
All work shall be highly specified as to content, sequence, timing, and outcome.
Every customer-supplier connection must be direct, and there must be an unambiguous yes or
no way to send requests and receive responses.
The pathway for every product and service must be simple and direct.
Any improvement must be made in accordance with the scientific method, under the
guidance of a teacher, at the lowest possible level in the organization.
This is a fundamentally different approach from most improvement methodologies, and
requires more persistence than basic application of the tools, which may partially account for
its lack of popularity. The implementation of "smooth flow" exposes quality problems that
already existed, and waste reduction then happens as a natural consequence, a system-wide
perspective rather focusing directly upon the wasteful practices themselves.
Takt time is the rate at which products need to be produced to meet customer demand. The
JIT system is designed to produce products at the rate of takt time, which ensures that
products are produced just in time to meet customer demand.
Sepheri provides a list of methodologies of just-in-time manufacturing that are
important but not exhaustive
i. Housekeeping: physical organization and discipline.
ii. Make it right the first time: elimination of defects.
iii. Setup reduction: flexible changeover approaches.
iv. Lot sizes of one: the ultimate lot size and flexibility.
v. Uniform plant load: leveling as a control mechanism.
vi. Balanced flow: organizing flow scheduling throughput.
vii. Skill diversification: multi-functional workers.

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 viii. Control by visibility: communication media for activity.
ix. Preventive maintenance: flawless running, no defects.
x. Fitness for use: producibility, design for process.
xi. Compact plant layout: product-oriented design.
xii. Streamlining movements: smoothing materials handling.
xiii. Supplier networks: extensions of the factory.
xiv. Worker involvement: small group improvement activities.
xv. Cellular manufacturing: production methods for flow.
xvi. Pull system: signal [kanban] replenishment/resupply systems.

Key principles and waste

Womack and Jones define Lean as, a way to do more and more with less and less—less
human effort, less equipment, less time, and less space—while coming closer and closer to
providing customers exactly what they want" and then translate this into five key principles
Value: Specify the value desired by the customer. "Form a team for each product to stick with
that product during its entire production cycle. Enter into a dialogue with the customer (e.g.
Voice of the customer)
The Value Stream: Identify the value stream for each product providing that value and
challenge all of the wasted steps (generally nine out of ten) currently necessary to provide it
Flow: Make the product flow continuously through the remaining value-added steps
Pull: Introduce pull between all steps where continuous flow is possible
Perfection: Manage toward perfection so that the number of steps and the amount of time and
information needed to serve the customer continually falls
Lean is founded on the concept of continuous and incremental improvements on product and
process while eliminating redundant activities. "The value of adding activities are simply
only those things the customer is willing to pay for, everything else is waste, and should be
eliminated, simplified, reduced, or integrated".
On principle 2, waste, see seven basic waste types under The Toyota Way. Additional
waste types are:

i. Faulty goods (manufacturing of goods or services that do not meet customer

demand or specifications, Womack et al., 2003. See Lean services)
ii. Waste of skills (Six Sigma)
iii. Under-utilizing capabilities (Six Sigma)
iv. Delegating tasks with inadequate training (Six Sigma)
v. Metrics (working to the wrong metrics or no metrics) (Mika Geoffrey, 1999)

31
 vi. Participation (not utilizing workers by not allowing them to contribute ideas and
suggestions and be part of Participative Management) (Mika Geoffrey, 1999)
vii. Computers (improper use of computers: not having the proper software, training
on use and time spent surfing, playing games or just wasting time) (Mika
Geoffrey, 1999)

Implementation
One paper suggests that an organization implementing Lean needs its own Lean plan as
developed by the "Lean Leadership". This should enable Lean teams to provide suggestions
for their managers who then makes the actual decisions about what to implement. Coaching
is recommended when an organization starts off with Lean to impart knowledge and skills to
shop-floor staff. Improvement metrics are required for informed decision-making.
Lean philosophy and culture is as important as tools and methodologies. Management should
not decide `on solutions without understanding the true problem by consulting shop floor
personnel.
The solution to a specific problem for a specific company may not have generalized
application. The solution must fit the problem.
Value-stream mapping (VSM) and 5S are the most common approaches companies take on
their first steps to Lean. Lean can be focused on specific processes, or cover the entire supply
chain. Front-line workers should be involved in VSM activities. Implementing a series of
small improvements incrementally along the supply chain can bring forth enhanced
productivity.
Naming
Alternative terms for JIT manufacturing have been used. Motorola's choice was short-cycle
manufacturing (SCM). IBM's was continuous-flow manufacturing (CFM), and demand-flow
manufacturing (DFM), a term handed down from consultant John Constanza at his Institute
of Technology in Colorado. Still another alternative was mentioned by Goddard, who said
that "Toyota Production System is often mistakenly referred to as the 'Kanban System', and
pointed out that kanban is but one element of TPS, as well as JIT production.
The wide use of the term JIT manufacturing throughout the 1980s faded fast in the 1990s, as
the new term lean manufacturing became established as a more recent name for JIT. As just
one testament to the commonality of the two terms, Toyota production system (TPS) has been
and is widely used as a synonym for both JIT and lean manufacturing.
Objectives and benefits
Objectives and benefits of JIT manufacturing may be stated in two primary ways: first, in
specific and quantitative terms, via published case studies; second, general listings and
discussion.
A case-study summary from Daman Products in 1999 lists the following benefits: reduced
cycle times 97%, setup times 50%, lead times from 4 to 8 weeks to 5 to 10 days, flow

32
distance 90%. This was achieved via four focused (cellular) factories, pull scheduling,
kanban, visual management, and employee empowerment.
Another study from NCR (Dundee, Scotland) in 1998, a producer of make-to-order
automated teller machines, includes some of the same benefits while also focusing on JIT
purchasing: In switching to JIT over a weekend in 1998, eliminated buffer inventories,
reducing inventory from 47 days to 5 days, flow time from 15 days to 2 days, with 60% of
purchased parts arriving JIT and 77% going dock to line, and suppliers reduced from 480 to
165.
Application outside a manufacturing context
Lean principles have been successfully applied to various sectors and services, such as call
centers and healthcare. In the former, lean's waste reduction practices have been used to
reduce handle time, within and between agent variation, accent barriers, as well as attain near
perfect process adherence. In the latter, several hospitals have adopted the idea of lean
hospital, a concept that prioritizes the patient, thus increasing the employee commitment and
motivation, as well as boosting medical quality and cost effectiveness.
Lean principles also have applications to software development and maintenance as well as
other sectors of information technology (IT).More generally, the use of lean in information
technology has become known as Lean IT. Lean methods are also applicable to the public
sector, but most results have been achieved using a much more restricted range of techniques
than lean provides.
The challenge in moving lean to services is the lack of widely available reference
implementations to allow people to see how directly applying lean manufacturing tools and
practices can work and the impact it does have. This makes it more difficult to build the level
of belief seen as necessary for strong implementation. However, some research does relate
widely recognized examples of success in retail and even airlines to the underlying principles
of lean. Despite this, it remains the case that the direct manufacturing examples of
'techniques' or 'tools' need to be better 'translated' into a service context to support the more
prominent approaches of implementation, which has not yet received the level of work or
publicity that would give starting points for implementors. The upshot of this is that each
implementation often 'feels its way' along as must the early industrial engineering practices of
Toyota. This places huge importance upon sponsorship to encourage and protect these
experimental developments.
Lean management is nowadays implemented also in non-manufacturing processes and
administrative processes. In non-manufacturing processes is still huge potential for
optimization and efficiency increase. Some people have advocated using STEM resources to
teach children Lean thinking instead of computer science.
Criticism
According to Williams, it becomes necessary to find suppliers that are close by or can supply
materials quickly with limited advance notice. When ordering small quantities of materials,
suppliers' minimum order policies may pose a problem, though.

33
Employees are at risk of precarious work when employed by factories that utilize just-in-time
and flexible production techniques. A longitudinal study of US workers since 1970 indicates
employers seeking to easily adjust their workforce in response to supply and demand
conditions respond by creating more nonstandard work arrangements, such as contracting and
temporary work.
Natural and human-made disasters will disrupt the flow of energy, goods and services. The
down-stream customers of those goods and services will, in turn, not be able to produce their
product or render their service because they were counting on incoming deliveries "just in
time" and so have little or no inventory to work with. The disruption to the economic system
will cascade to some degree depending on the nature and severity of the original disaster and
may create shortages. The larger the disaster the worse the effect on just-in-time failures.
Electrical power is the ultimate example of just-in-time delivery. A severe geomagnetic storm
could disrupt electrical power delivery for hours to years, locally or even globally. Lack of
supplies on hand to repair the electrical system would have catastrophic effects.
The COVID-19 pandemic has caused disruption in JIT practices, with various quarantine
restrictions on international trade and commercial activity in general interrupting supply
while lacking stockpiles to handle the disruption; along with increased demand for medical
supplies like personal protective equipment (PPE) and ventilators, and even panic buying,
including of various domestically manufactured (and so less vulnerable) products like panic
buying of toilet paper, disturbing regular demand. This has led to suggestions that stockpiles
and diversification of suppliers should be more heavily focused.
Critics of Lean argue that this management method has significant drawbacks, especially for
the employees of companies operating under Lean. Common criticism of Lean is that it fails
to take into consideration the employee's safety and well-being. Lean manufacturing is
associated with an increased level of stress among employees, who have a small margin of
error in their work environment which require perfection. Lean also over-focuses on cutting
waste, which may lead management to cut sectors of the company that are not essential to the
company's short-term productivity but are nevertheless important to the company's legacy.
Lean also over-focuses on the present, which hinders a company's plans for the future.
Critics also make negative comparison of Lean and 19th century scientific management,
which had been fought by the labour movement and was considered obsolete by the 1930s.
Finally, lean is criticized for lacking a standard methodology: "Lean is more a culture than a
method, and there is no standard lean production model."
After years of success of Toyota's Lean Production, the consolidation of supply chain
networks has brought Toyota to the position of being the world's biggest carmaker in the
rapid expansion. In 2010, the crisis of safety-related problems in Toyota made other
carmakers that duplicated Toyota's supply chain system wary that the same recall issue might
happen to them. James Womack had warned Toyota that cooperating with single outsourced
suppliers might bring unexpected problems.
Lean manufacturing is different from lean enterprise. Recent research reports the existence of
several lean manufacturing processes but of few lean enterprises. One distinguishing feature

34
opposes lean accounting and standard cost accounting. For standard cost accounting, SKUs
are difficult to grasp. SKUs include too much hypothesis and variance, i.e., SKUs hold too
much indeterminacy. Manufacturing may want to consider moving away from traditional
accounting and adopting lean accounting. In using lean accounting, one expected gain is
activity-based cost visibility, i.e., measuring the direct and indirect costs at each step of an
activity rather than traditional cost accounting that limits itself to labor and supplies.
SIX SIGMA (6σ)
Six Sigma (6σ) is a set of techniques and tools for process improvement. It was introduced by
American engineer Bill Smith while working at Motorola in 1986.

Six Sigma strategies seek to improve manufacturing quality by identifying and removing the
causes of defects and minimizing variability in manufacturing and business processes. This is
done by using empirical and statistical quality management methods and by hiring people
who serve as Six Sigma experts. Each Six Sigma project follows a defined methodology and
has specific value targets, such as reducing pollution or increasing customer satisfaction.

The term Six Sigma originates from statistical quality control, a reference to the fraction of a
normal curve that lies within six standard deviations of the mean, used to represent a defect
rate.

History

Motorola pioneered Six Sigma, setting a "six sigma" goal for its manufacturing business. It
registered Six Sigma as a service mark on June 11, 1991, it registered Six Sigma as a
trademark. In 2005 Motorola attributed over $17 billion in savings to Six Sigma.

Honeywell and General Electric were also early adopters of Six Sigma. As GE's CEO, in
1995 Jack Welch made it central to his business strategy.In 1998 GE announced $350 million
in cost savings thanks to Six Sigma, which was an important factor in the spread of Six
Sigma (this figure later grew to more than $1 billion).By the late 1990s, about two thirds of
the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs
and improving quality.

In recent years, some practitioners have combined Six Sigma ideas with lean manufacturing
to create a methodology named Lean Six Sigma. The Lean Six Sigma methodology views
lean manufacturing, which addresses process flow and waste issues, and Six Sigma, with its
focus on variation and design, as complementary disciplines aimed at promoting "business
and operational excellence".

In 2011, the International Organization for Standardization (ISO) published the first standard
ISO 13053:2011 defining a Six Sigma process. Other standards have been created mostly by
universities or companies with Six Sigma first-party certification programs.

Doctrine

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Six Sigma asserts that: Continuous efforts to achieve stable and predictable process results
(e.g., by reducing process variation) are of vital importance to business success.

Manufacturing and business processes have characteristics that can be defined, measured,
analyzed, improved, and controlled.

Achieving sustained quality improvement requires commitment from the entire organization,
particularly from top-level management.

Features that set Six Sigma apart from previous quality-improvement initiatives include:

Focus on achieving measurable and quantifiable financial returns

Emphasis on management leadership and support

Commitment to making decisions on the basis of verifiable data and statistical methods rather
than assumptions and guesswork

In fact, lean management and Six Sigma share similar methodologies and tools, including the
fact that both were influenced by Japanese business culture. However, lean management
primarily focuses on eliminating waste through tools that target organizational efficiencies
while integrating a performance improvement system, while Six Sigma focuses on
eliminating defects and reducing variation. Both systems are driven by data, though Six
Sigma is much more dependent on accurate data.

Six Sigma's implicit goal is to improve all processes but not necessarily to the 3.4 DPMO
level. Organizations need to determine an appropriate sigma level for each of their most
important processes and strive to achieve these. As a result of this goal, it is incumbent on
management of the organization to prioritize areas of improvement.

Methodologies

Six Sigma projects follow two project methodologies, inspired by W. Edwards Deming's
Plan–Do–Study–Act Cycle, each with five phases.

DMAIC ("duh-may-ick", /də.ˈmeɪ.ɪk/) is used for projects aimed at improving an existing

business process

DMADV ("duh-mad-vee", /də.ˈmæd.vi/) is used for projects aimed at creating new product
or process designs

DMAIC's five steps

The DMAIC project methodology has five phases:

i. Define the system, the voice of the customer and their requirements, and the
project goals, specifically.
ii. Measure key aspects of the current process and collect relevant data; calculate the
"as-is" process capability

36
 iii. Analyze the data to investigate and verify cause and effect. Determine what the
relationships are, and attempt to ensure that all factors have been considered. Seek
out the root cause of the defect under investigation.
iv. Improve or optimize the current process based upon data analysis using
techniques such as design of experiments, poka yoke or mistake proofing, and
standard work to create a new, future state process. Set up pilot runs to establish
process capability.
v. Control the future state process to ensure that any deviations from the target are
corrected before they result in defects. Implement control systems such as
statistical process control, production boards, visual workplaces, and continuously
monitor the process. This process is repeated until the desired quality level is
obtained.

Some organizations add a Recognize step at the beginning, which is to recognize the right
problem to work on, thus yielding an RDMAIC methodology.

Design for Six Sigma

Also known as DFSS ("Design for Six Sigma")

i. Define design goals that are consistent with customer demands and the enterprise
strategy.
ii. Measure and identify CTQs (characteristics that are Critical To Quality), measure
product capabilities, production process capability, and measure risks.
iii. Analyze to develop and design alternatives
iv. Design an improved alternative, best suited per analysis in the previous step
v. Verify the design, set up pilot runs, implement the production process and hand it
over to the process owner(s).

Professionalization

One key innovation of Six Sigma involves professionalizing quality management. Prior to
Six Sigma, quality management was largely relegated to the production floor and to
statisticians in a separate quality department. Formal Six Sigma programs adopt an elite
ranking terminology similar to martial arts systems like judo to define a hierarchy (and career
path) that spans business functions and levels.

Six Sigma identifies several roles for successful implementation:

Executive Leadership includes the CEO and other members of top management. They are
responsible for setting up a vision for Six Sigma implementation. They also empower other
stakeholders with the freedom and resources to transcend departmental barriers and overcome
resistance to change.

Champions take responsibility for Six Sigma implementation across the organization. The
Executive Leadership draws them from upper management. Champions also act as mentors to
Black Belts.

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Master Black Belts, identified by Champions, act as in-house coaches on Six Sigma. They
devote all of their time to Six Sigma, assisting Champions and guiding Black Belts and Green
Belts. In addition to statistical tasks, they ensure that Six Sigma is applied consistently across
departments and job functions.

Black Belts operate under Master Black Belts to apply Six Sigma to specific projects. They
also devote all of their time to Six Sigma. They primarily focus on Six Sigma project
execution and special leadership with special tasks, whereas Champions and Master Black
Belts focus on identifying projects/functions for Six Sigma.

Green Belts are the employees who take up Six Sigma implementation along with their other
job responsibilities, operating under the guidance of Black Belts.

According to proponents, special training is needed for all of these practitioners to ensure that
they follow the methodology and use the data-driven approach correctly.

Some organizations use additional belt colours, such as "yellow belts", for employees that
have basic training in Six Sigma tools and generally participate in projects, and "white belts"
for those locally trained in the concepts but do not participate in the project team. "Orange
belts" are also mentioned to be used for special cases.

Manufacturing

After its first application at Motorola in the late 1980s, other internationally recognized firms
currently recorded high number of savings after applying Six Sigma. Examples include
Johnson & Johnson, with $600 million of reported savings, Texas Instruments, which saved
over $500 million as well as Telefónica, which reported €30 million in savings in the first 10
months; Sony and Boeing also reported successfully reducing waste.

Finance

Six Sigma has played an important role by improving the accuracy of allocation of cash to
reduce bank charges, automatic payments, improving the accuracy of reporting, reducing
documentary credit defects, reducing check collection defects, and reducing variation in
collector performance.

For example, Bank of America announced in 2004 that Six Sigma had helped it increase
customer satisfaction by 10.4% and decrease customer issues by 24%; similarly, American
Express eliminated non-received renewal credit cards. Other financial institutions that have
adopted Six Sigma include GE Capital and JPMorgan Chase, where customer satisfaction
was the main objective.

Supply chain

In the supply-chain field, it is important to ensure that products are delivered to clients at the
right time while preserving high-quality standards. By changing the schematic diagram for
the supply chain, Six Sigma can ensure quality control on products (defect-free) and
guarantee delivery deadlines, the two main issues in the supply chain.

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Healthcare

This is a sector that has been highly matched with this doctrine for many years because of the
nature of zero tolerance for mistakes and potential for reducing medical errors involved in
healthcare. The goal of Six Sigma in healthcare is broad and includes reducing the inventory
of equipment that brings extra costs, altering the process of healthcare delivery in order to
make it more efficient and refining reimbursements. A study at the MD Anderson Cancer
Center, which recorded an increase in examinations with no additional machines of 45% and
a reduction in patients' preparation time of 40 minutes; from 45 minutes to 5 minutes in
multiple cases.

Lean Six Sigma was adopted in 2003 at Stanford hospitals and was introduced at Red Cross
hospitals in 2002.

Criticism

While there are many advocates for a Six Sigma approach for the reasons stated above, more
than half of projects are unsuccessful: in 2010, the Wall Street Journal reported that more
than 60% of projects fail. A review of academic literature found 34 common failure factors in
56 papers on Lean, Six Sigma, and LSS from 1995-2013. Among them are (summarized):

Lack of top management attitude, commitment, and involvement; lack of leadership and
vision

Lack of training and education; lack of resources (financial, technical, human, etc.)

Poor project selection and prioritization; weak link to strategic objectives of the organization

Resistance to culture change; Poor communication; Lack of consideration of the human

factors

Lack of awareness of the benefits of Lean/Six Sigma; Lack of technical understanding of

tools, techniques, and practices

Other criticisms are:

Lack of originality

Quality expert Joseph M. Juran described Six Sigma as "a basic version of quality
improvement", stating that "there is nothing new there. It includes what we used to call
facilitators. They've adopted more flamboyant terms, like belts with different colors. I think
that concept has merit to set apart, to create specialists who can be very helpful. Again, that's
not a new idea. The American Society for Quality long ago established certificates, such as
for reliability engineers.

Role of consultants

The use of "Black Belts" as itinerant change agents has fostered an industry of training and
certification. Critics have argued there is overselling of Six Sigma by too great a number of

39
consulting firms, many of which claim expertise in Six Sigma when they have only a
rudimentary understanding of the tools and techniques involved or the markets or industries
in which they are acting.

Over-reliance on statistics

More direct criticism is the "rigid" nature of Six Sigma with its over-reliance on methods and
tools. In most cases, more attention is paid to reducing variation and searching for any
significant factors, and less attention is paid to developing robustness in the first place (which
can altogether eliminate the need for reducing variation). The extensive reliance on
significance testing and use of multiple regression techniques increase the risk of making
commonly unknown types of statistical errors or mistakes. A possible consequence of Six
Sigma's array of p-value misconceptions is the false belief that the probability of a conclusion
being in error can be calculated from the data in a single experiment without reference to
external evidence or the plausibility of the underlying mechanism. One of the most serious
but all-too-common misuses of inferential statistics is to take a model that was developed
through exploratory model building and subject it to the same sorts of statistical tests that are
used to validate a model that was specified in advance.

MODULE 6.0

THE INTERNATIONAL ORGANISATION FOR STANDARDISATION

The International Organisation for Standardisation (ISO) is an independent, non-

governmental international organisation with a membership of 162 national standards bodies.
Through its members, it brings together experts to share knowledge and develop voluntary,
consensus-based, market relevant International Standards that support innovation and provide
solutions to global challenges. The ISO story began in 1946 when delegates from 25
countries met at the Institute of Civil Engineers in London and decided to create a new
international organisation ‘to facilitate the international coordination and unification of
industrial standards’. On 23 February 1947 the new organisation, ISO, officially began
operations. Since then, ISO has published over 19000 International Standards covering
almost every industry, from technology, to food safety, to agriculture and healthcare. ISO
International Standards impact everyone, everywhere. These standards give world-class
specifications for products, services and systems, to ensure quality, safety and efficiency.

ISO are instrumental (influential) in facilitating international trade. Popular standards

developed by ISO so far are:

ISO 9000 Quality management

ISO 14000 Environmental management

ISO 3166 Country codes

40
ISO 26000 Social responsibility

ISO 50001 Energy management

ISO 31000 Risk management

ISO 22000 Food safety management

ISO 27001 Information security management

ISO 45001 Occupational health and safety

ISO 37001 Anti bribery management systems

ISO 13485 Medical devices

5.1 ISO 9000 - Quality management

The ISO 9000 family addresses various aspects of quality management and contains some of
ISO’s best known standards.

ISO 9001:2015 - sets out the requirements of a quality management system

ISO 9000:2015 - covers the basic concepts and language

ISO 9004:2009 - focuses on how to make a quality management system more efficient and
effective

ISO 19011:2011 - sets out guidance on internal and external audits of quality management
systems.

5.2 The ISO 9001:2015

ISO 9001:2015 sets out the criteria for a quality management system. This standard is based
on a number of quality management principles including a strong customer focus, the
motivation and implication of top management, the process approach and continual
improvement. Using ISO 9001:2015 helps ensure that customers get consistent, good quality
products and services, which in turn brings many business benefits.

5.2.1 Sector-specific applications of ISO 9001

ISO has a range of standards for quality management systems that based on ISO 9001 but
made specific to different sectors and industries.

These include:

ISO/TS 16949 – Automotive production and relevant service part organisations

ISO/TS 29001 – Petroleum, petrochemical and natural gas industries

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ISO 13485 – Medical devices

ISO/IEC 90003 – Software engineering

ISO 17582 – Electoral organisations at all levels of government

ISO 18091 - Local government

However, because 'International Organisation for Standardisation' would have different

acronyms in different languages (IOS in English, OIN in French for Organisation
internationale de normalisation), the founders of International Organisation for
Standardisation decided to give it the short form ISO. ISO is derived from the Greek isos,
meaning equal.

5.3 The Standards Organisation of Nigeria (SON)

The Standard Organisation of Nigeria (SON) was established by the SON Act 56 of 1971, 20
of 1984, 18 of 1990 as amended to carry out the following functions:

(i) Organise tests and do everything necessary to ensure compliance with standards
designated and approved by the Council.
(ii) Undertake investigations as necessary into the quality of facilities, materials and
products in Nigeria, and establish a quality assurance system including
certification of factories, products and laboratories.
(iii) Ensure reference standards for calibration and verification of measures and
measuring instruments.
(iv) Compile an inventory of products requiring standardisation.

Generally, SON plays central role in the promotion of trade, investment, overall economic
development of the country through its various activities including product certification.

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