TOTAL QUALITY MANAGEMENT

UNIT – 1
W. EDWARDS DEMING
The father of Quality Evolution
 TOTAL QUALITY MANAGEMENT
UNIT – 1
 Introduction
 Need for quality
 Evolution of quality
 Definitions of quality
 Dimensions of product and service quality
 Basic concepts of TQM
 TQM framework
 Contributions of Deming
 Juran and Crosby
 Barriers to TQM
 Customer focus
 Customer orientation
 Customer satisfaction
 Customer complaints
 Customer retention.
 INTRODUCTION
Quality, though familiar to everyone, is one
of the most important issues that all sectors have
focused on 20-30 years. As market have become
much more competitive, quality has become a
key ingredient for success in today's business.

Meaning of Quality:
Quality is a judgment by customers or users
of a product or service. That is, quality is a
customer determination, not an engineer’s
determination or a manager’s determination.
 TOTAL QUALITY MANAGEMENT
UNIT – 1
Definitions of Quality:
The universally accepted definition of
quality which is provided by ISO, is as follows :
”Quality is the totality of characteristics of an entity that
bear on its ability to satisfy stated and implied needs.” -
ISO

“Quality is fitness for use” - Juran

“Quality is conformance to requirements” - Crosby

Need for Quality:

Quality can be quantified as follows:

Q= P
E
where Q= Quality
P=Performance, and
E= Expectations
If Q is greater than 1.0. then the customer has a good
feeling about the product or services, The
determination of P and E will most likely be based
on perception with the organization determining
performance and the customer determining
expectations.
Evolution of Quality:
The TQM philosophy has evolved from quality in the
sequence as below:
 Quality

 Quality control (QC)

 Statistical Quality Control (SQC)

 Total Quality Control (TQC)

 Quality Assurance (QA)

 TQM
DIMENSIONS OF PRODUCT AND SERVICE
QUALITY

 The term quality is used in a variety of ways.

Some are as follows
(i) Performance
(ii) Features
(iii) Conformance
(iv) Reliability
(v) Durability
(vi) Service
(vii) Response
(viii) Aesthetics
(ix) Reputation.
DIMENSIONS OF PRODUCT AND SERVICE
QUALITY

The dimension of quality can be

best understood separately for
product and service with the help of
the example present as below.
 BASIC CONCEPTS OF TQM

Total Quality Management is the

management approach of an organization,
centered on quality, based on the participation of
all its numbers and aiming at long-term success
through customer satisfaction and benefit to all
member of the organization and to society. –ISO
What is Total Quality Management?

We analyze the word TQM.

Total : Made up of the whole

Quality : Degree of excellence a
product or service
provides.
Management : Act, art, or manner of
handling, controlling,
directing, etc

Therefore, TQM is the art of managing the whole to

achieve excellence.
 BASIC CONCEPTS OF TQM
A successful TQM programme requires the
following six basic concepts:
1. Top management commitment
2. Focus on the customer
3. Effective and utilization of entire work.
4. Continuous improvement
5. Treating suppliers as partners
6. Establishing performance measures for the
process.
 BASIC CONCEPTS OF TQM
1. Top management commitment:
Top management should participate and
completely involved in the total quality
programme. Fundamental to all TQM systems is
improving the quality of the products and services
provided by an organization. Such
quality improvement results in greater productivity
and enhances the ability of an organization to
remain vital, employ people, and serve customers.
A focus on continuous quality improvement helps
an organization do things right.
 BASIC CONCEPTS OF TQM

2. Focus on the customer:

Also central to all TQM is a focus on the
customer, the internal and external recipients of an
organization’s products. Their needs and desires
define quality for the producer whose job it is to
meet or exceed the customer’s needs and
expectations. A focus on customers helps an
organization to do the right things.
 BASIC CONCEPTS OF TQM

3.Effective and utilization of entire work:

 All work occurs in processes that begin and end

somewhere. These work processes account for 80- 85
percent of the quality of work and productivity of
employees. Management is responsible for systems within
an organization; therefore, managers, not employees, must
shoulder blame when something goes wrong with the
system.
 TQM calls for studying work processes quantitatively,
using individuals or teams, to find places that breakdowns
or unnecessary complexities occur in processes, and then to
identify solutions that prevent them in the future. Study of
work processes helps to reduce costs while ensuring that
quality is built into a service or product since quality
cannot be inspected into it at the end of the processes.
 BASIC CONCEPTS OF TQM

4.Continuous improvement:
Continuous quality improvement requires an
atmosphere for innovation where suggestions for
improvement are solicited and respected and where
supervisors and managers are open to
disagreement, conflict, and challenge. Activities for
the improvement of work processes, especially
when teams are involved, help to break down
barriers that occur between departments or
between supervisors and those supervised.
5.Treating suppliers as partners
6.Establishing performance measures for the
process.
 BASIC CONCEPTS OF TQM
5.Treating suppliers as partners:
TQM is also characterized by long- term
thinking which helps mold the future by
understanding the consequences of current actions.
Such thinking requires decision making that is
based on data, both hard and soft, and related to
real problems, not symptoms. It requires time. It
shies away from quick fixes arrived at by
discussion and intuition. Long- term thinking
works best in organizations where managers plan
to stay, and thus have a stake in the consequences
of their decisions.
 BASIC CONCEPTS OF TQM
6.Establishing performance measures for the
process:

Therefore performance measures such as

uptime, productivity, sales turnover, absenteeism,
percent nonconforming, customer satisfaction etc
should be determined for each functional area.

This approach taps the collective genius of the

organization to identify and solve problems. The
leader’s focus is on policy, structure, and systems to
sustain continuous quality improvement. Within
this context, quality is the first among equals of the
organization’s functions.
 BASIC CONCEPTS OF TQM
6.Establishing performance measures for the
process: cont

Quality is at the top of the agenda for every

meeting, every communication. The leader’s goal is
to help people, things, and machines do a better
job; the leader’s role is that of facilitator, catalyst,
and coach.
As previously stated, TQM requires a
cultural change. The TQM state for typical quality
elements. This change is substantial and will not
be accomplished in a short period of time. Small
organizations will be able to make the
transformation much faster than large
organizations.
ELEMENTS TQM (TQM FRAMEWORK)
THREE ELEMENTS OF TQM
 THE PHILOSOPHICAL ELEMENTS:
TQM stress the operation of the company
using quality as the integrating element.
 THE GENERIC TOOLS:
It consist of various statistical process control(SPC)
methods that are used for problem solving and
continuous improvement by quality teams. Quality
function deployment is typically used by managers to
drive the voice of the customer into the organization.
 TOOLS OF THE QC DEPARTMENT:
It consists of statistical quality control (SQC)
methods such as sampling plans, process
capability and Taguchi methods.
PILLARS OF TQM
 PILLARS OF TQM
The four pillars of TQM are.
1. Problem solving discipline.
2. Interpersonal skills

3. Teamwork, and

4. Quality improvement process.

TQM is used to improve the whole

organisation stepwise, structured and
systematically according to hard work,
siscipline, intensive training and consistent
implementation of techniques and resources.
These quality principles form the fountation of
TQM .
CONTRIBUTIONS OF DEMING
Deming – an American, was the senior
quality guru.
1928 Awarded doctorate in mathematical physics.
1946 After sharing his expertise in statistical quality control to
help nation recover from its wartime losses.

1951 After having impressed by his contribution, the Japanese

established the Deming prize .Deming prize is awarded
annually to firms the distinguish themselves with quality
management programs.

1956 Awarded the shewhart medal by the American society for

quality control.
1960 Awarded by the Japanese Emperor with the second order of
the sacred Treasure for his teachings.
CONTRIBUTIONS OF DEMING

 Deming’s 14 points on route to quality

 Deming cycle (or PDCA cycle)

 Seven deadly diseases of management, and

 System of profound knowledge.

DEMING’S 14 POINTS ON ROUTE TO QUALITY

1. Create constancy of purpose toward improvement of

product and service, with the aim to become
competitive and to stay in business and to provide
jobs.
For the company that wants to stay in business, the two
general types of problems that exist are the problems
of today and the problems of tomorrow. It is easy to
become wrapped up with the problems of today, but
the problems of the future demand, first and
foremost, constancy of purpose and dedication to keep
the company alive. Decisions need to be made to
cultivate innovation, fund research and education,
and improve the product design and service,
remembering that the customer is the most important
part of the production line.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

2. Adopt the new philosophy. We are in a new economic

age. Western management must awaken to the
challenge, must learn their responsibilities, and take
on leadership for change.
Government regulations and antitrust activities
need to be changed to support the well-being of
people. Commonly accepted levels of mistakes and
defects can no longer be tolerated. People must
receive effective training so that they understand
their job and also understand that they should not be
afraid to ask for assistance when it is needed.
Supervision must be adequate and effective.
Management must be rooted in the company and
must not job-hop between positions within a
company.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

3. Cease dependence on inspection to achieve

quality. Eliminate the need for inspection on a
mass basis by building quality into the product in
the first place.
Inspection is too late, ineffective, and costly.
It is too late to react to the quality of a product
when the product leaves the door. Quality comes
not from inspection but from improving the
production process. Corrective actions are not
inspection, scrap, downgrading, and rework the
process.
DEMING’S 14 POINTS ON ROUTE TO QUALITY
4. End
the practice of awarding business on the basis of price tag. Instead,
minimize total cost. Move toward a single supplier for any one item, on a
long-term relationship of loyalty and trust.

Price and quality go hand in hand. Trying to drive down the price of
anything purchased without regard to quality and service can drive good
suppliers and good service out of business. Single-source suppliers are
desirable for many reasons. For example, a single-source supplier can
become innovative and develop an economy in the production process that
can only result from a long-term relationship with the purchaser. Lot-to-lot
variability within a one-supplier process is often enough to disrupt the
purchaser’s process. Only additional variation can be expected with two
suppliers. To qualify a supplier as a source for parts in a manufacturing
process, perhaps it is better first to discard manuals that may have been
used as guidelines by unqualified examiners to rate suppliers. Instead,
suppliers could be asked to present evidence of active involvement of
management, encouraging the application of many of the IEE concepts
discussed in this volume. Special note should be given to the methodology
used for continual process improvement.
DEMING’S 14 POINTS ON ROUTE TO QUALITY
5.Improve constantly and forever the system of
production and service, to improve quality and
productivity, and thus constantly decrease costs.
There is a need for constant improvement in test
methods and for a better understanding of how the
customer uses and misuses a product. In the past,
American companies have often worried about
meeting specifications, while the Japanese have
worried about uniformity, i.e., reducing variation
about the nominal value. Continual process
improvement can take many forms. For example,
never-ending improvement in the manufacturing
process means that work must be done continually
with suppliers to improve their processes. It is
important to note that, like depending on inspection,
putting out fires is not a process improvement.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

6. Institute training on the job.

Management needs training to learn about all aspects
of the company from incoming materials to customer
needs, including the impact that process variation has
on what is done within the company. Management
must understand the problems the worker has in
performing his or her tasks satisfactorily. A large
obstacle exists in training and leadership when there
are flexible standards for acceptable work. The
standard may often be most dependent on whether a
foreperson is having difficulty in meeting a daily
production quota. It should be noted that money and
time spent would be ineffective unless the inhibitors
to good work are removed.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

7. Institute leadership. The aim of supervision should be

to help people and machines and gadgets to do a better
job.

Supervision by management is in need of

overhaul, as well as supervision of production
workers.” Management should lead, not supervise.
Leaders must know the work that they supervise.
They must be empowered and directed to
communicate and to act on conditions that need
correction. They must learn to fix the process, not
react to every fault as if it were a special cause, which
can lead to a higher defect rate.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

8. Drive out fear, so that everyone may work

effectively for the company.
No one can give his best performance unless
he feels secure. Employees should not be afraid to
express their ideas or ask questions. Fear can
take many forms, resulting in impaired
performance and padded figures. Industries
should embrace new knowledge because it can
yield better job performance and should not be
fearful of this knowledge because it could disclose
some of their failings.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

9. Break down barriers between departments. People in

research, design, sales, and production must work as
a team to foresee problems of production and use that
may be encountered with the product or service.
Teamwork is needed throughout the company.
Everyone in design, sales, manufacturing… can be
doing superb work, and yet the company can be
failing. Why? Functional areas are sub-optimizing
their own work and not working as a team for the
company. Many types of problems can occur when
communication is poor. For example, service
personnel working with customers know a great deal
about their products, but there is often no routine
procedure for disseminating this information.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

10. Eliminate slogans, exhortations, and targets for the work

force asking for zero defects and new levels of productivity.

Such exhortations only create adversary

relationships, as the bulk of the causes of low quality and
low productivity belongs to the system and thus lies beyond
the power of the work force. Exhortations, posters, targets,
and slogans are directed at the wrong people, causing
general frustration and resentment. Posters and charts do
not consider the fact that most trouble comes from the
basic process. Management needs to learn that its main
responsibility should be to improve the process and remove
any special causes for defects found by statistical methods.
Goals need to be set by an individual for the individual, but
numerical goals set for other people without a road map to
reach the objective have an opposite effect.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

11a. Eliminate work standards (quotas) on the

factory floor. Substitute leadership.
Never-ending improvement is incompatible with a
quota. Work standards, incentive pay, rates, and
piecework are manifestations of management’s
lack of understanding, which leads to
inappropriate supervision. Pride of workmanship
needs to be encouraged, while the quota system
needs to be eliminated. Whenever work
standards are replaced with leadership, quality
and productivity increase substantially, and
people are happier on their jobs.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

11b. Eliminate management by objective. Eliminate management

by numbers, numerical goals. Substitute leadership.

Goals such as “improve productivity by 4 percent next

year” without a method are a burlesque. The data tracking
these targets are often questionable. Moreover, a natural
fluctuation in the right direction is often interpreted as
success, while small fluctuation in the opposite direction
causes a scurry for explanations. If there is a stable process, a
goal is not necessary because the output level will be what the
process produces. A goal beyond the capability/performance of
the process will not be achieved. A manager must understand
the work that is to be done in order to lead and manage the
sources for improvement. New managers often short-circuit
this process and focus instead on outcome; e.g., getting reports
on quality, proportion defective, inventory, sales, and people.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

12a. Remove barriers that rob the hourly worker(s) of their right

to pride of workmanship.

The responsibility of supervisors must be changed from sheer

numbers to quality. In many organizations, the hourly worker
becomes a commodity. He may not even know whether he will
be working next week. Management can face declining sales
and increased costs of almost everything, but it is often
helpless in facing the problems of personnel. The
establishment of employee involvement and of participation
plans has been a smoke screen. Management needs to listen
and to correct process problems that are robbing the worker of
pride of workmanship.
 DEMING’S 14 POINTS ON ROUTE TO QUALITY
12b. Remove barriers that rob people in management and in engineering of
their right to pride of workmanship.
This means, inter alia, abolishment of the annual or merit rating
and of managing by objective.” Merit rating rewards people who are doing
well in the system; however, it does not reward attempts to improve the
system. The performance appraisal erroneously focuses on the end product
rather than on leadership to help people. People who are measured by
counting are deprived of pride of workmanship. The indexes for these
measurements can be ridiculous. For example, an individual is rated on the
number of meetings he or she attends; hence, in negotiating a contract, the
worker increases the number of meetings needed to reach a compromise.
One can get a good rating for fire fighting because the results are
visible and quantifiable, while another person only satisfied minimum
requirements because he or she did the job right the first time; in other
words, mess up your job, and correct it later to become a hero. A common
fallacy is the supposition that it is possible to rate people by putting them
in rank order from last year’s performance. There are too many
combinations of forces involved: the worker, co-workers, noise, and
confusion.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

Apparent differences in the ranking of personnel

will arise almost entirely from these factors in
the system. A leader needs to be not a judge but a
colleague and counsellor who leads and learns
with his or her people on a day-to-day basis. In
absence of numerical data, a leader must make
subjective judgments when discovering who, if
any, of his or her people are outside the system,
either on the good or the bad side, or within the
system.
DEMING’S 14 POINTS ON ROUTE TO QUALITY

13. Institute a vigorous program of education and

self-improvement.
An organization needs good people who are
improving with education. Management should
be encouraging everyone to get additional
education and to engage in self-improvement.
DEMING’S 14 POINTS ON ROUTE TO QUALITY
14. Put everybody in the company to work to accomplish
the transformation. The transformation is everybody’s
job.
Management needs to take action to accomplish
the transformation. To do this, first consider that
every job and activity is part of a process. A flow
diagram breaks a process into stages. Questions then
need to be asked about what changes could be made
at each stage to improve the effectiveness of other
upstream or downstream stages. Everyone can be a
part of the team effort to improve the input and
output of the stages. Everyone on a team has a chance
to contribute ideas and plans. A team has an aim and
goal toward meeting the needs of the customer.
DEMING CYCLE (OR PDCA CYCLE)
 Deming encouraged a systematic approach to
problem solving and promotion the widely know
plan, Do,Check, Act (PDCA) cycle. The PDCA
cycle is also known as the Deming cycle or
Deming wheel, although it was developed by a
colleague of Deming, Dr.Water a.Shewhart.
 It is a universal improvement methodology, the
idea is to constantly improve, and thereby reduce
the difference between the requirements of the
customer and the performance of the process.
 The cycle is about learning and ongoing
improvement, learning what works and what
does not in a systematic way: and the cycle
repeats; after one cycle is complete, another is
started.
SEVEN DEADLY DISEASES OF WESTERN MANAGEMENT
The implementation of Deming’s 14 can transforms the
western style of management. This transformation can
fully materialize only when certain bad practices, called
by Deming unforgivable sins or deadly diseases (DD),
are eliminated.
S.N SEVEN DEADLY DISEASES OF MANAGEMENT
O
1. Lack of consistancy of purpose.
2. Emphasis on short term profit
3. Reliance on performance appraisal and merit.
4. Staff mobility
5. Reliance on financial figures
6. Excessive medical costs.
7. Excessive legal costs.
 SYSTEM OF PROFOUND KNOWLEDGE
The system of profound knowledge, or management
by positive co-operation, is described by Deming.
The four ingredients (or elements) of the system
of profound knowledge that is necessary to learn
and practice are given below.
S. FOUR ELEMENTS OF ‘SUSTEM OF PROFOUND
N KNOWLEDGE’
1. Appreciation for a system:
The need for managers to understand the relationship between function
and activities, and that the long term aims is for everyone to win- employees,
share holders, customers, suppliers and the environment.
2. Knowledge of statistical theory:
knowledge and understanding of variation, process capability, control
charts, interactions and loss functions
S.N FOUR ELEMENTS OF ‘SUSTEM OF PROFOUND
O KNOWLEDGE’

Theory of knowledge :
3.
As all plans require predication based on historical information, the
theory must be understood before it can successfully be copied.

Knowledge of psychology:
4.
The understanding of human interactions, how people are
motivated and what disillusions them.
 JURAN AND CROSBY

About Juran
Juran born in Romania (1904) and emigrated to America in 1912.

 1951 : Published “Quality control Handbook”

 Mid 1950’s : like Deming , travelled to Japan to conduct top and
middle level executive seminars on planning, organizational issues,
management responsibilities for quality and the need to set and
monitor improvement target goals.
Juran has authored hundreds of paper and 12 books, including “Juran’s
Quality control Handbook”, “Quality Planning and Analysis” and
“Juran on Leadership for Quality”

Juran has been awarded over 30 medals and fellowships world wide,
including Japan’s highest honour for a non-Japaneses cititzen, the
second order of the sacred Treasure presented by the Emperor.
 JURAN’S CONTRIBUTIONS
Juran contributions can be studies under the
following six topics below:

1. Internal Customer;
2. Cost of quality;
3. Quality trilogy
4. Juran’s 10 steps for quality improvement, and
5. The breakthrough concept.
2.COST OF QUALITY
3.JURAN’S QUALITY TRILOGY
3.JURAN’S QUALITY TRILOGY
3.JURAN’S QUALITY TRILOGY
4.JURAN’S 10 STEPS FOR QUALITY
IMPROVEMENT
5.THE BREAKTHROUGHT CONCEPT
PHILIP CROSBY:
 Crosby is another of the American quality guru
who rose to international fame mainly thanks to
his teaching on quality management.
 He is best known for the concept of ‘zero
Defects’ and ‘Do it right first time’.
 He has authored many books, including “Quality
is free”, “Quality without Tears”, and“Let’s
talk quality and leading: The art of
becoming on Executive”.
 He was the founder and chairman of board of
career IV , an executive management consulting
firm. He also founded Philip crosby Associates
and the Quality college.
CROSBY’S CONTRIBUTIONS.
Crossby is known for his following contributions.
1. Four absolutes of quality;

2. Fourteen steps to Quality management; and

3. Crosby’s quality vaccine.

1.CROSBY’S ABSOLUTES FOR QUALITY

MANAGEMENT:
Crosby proposed four absolutes of quality for
his quality improvement process. They are as follows.
1.CROSBY’S ABSOLUTES FOR QUALITY
MANAGEMENT:

ABSOLUTES DESCRIPTIONS

First Absolute: The definition of quality is conformance to

requirements, not goodness.

Second Absolute The system for causing quality is preventive, not

appraisal

Third Absolute The performance standard must be Zero defect,

not “that” close enough”.

Fourth Absolute The measurement of quality is the price of non-

conformance, not indexes.
 2.CROSBY FOURTEEN STEPS FOR QUALITY IMPROVEMENT
Crosby had laid down 14 steps for implementing the
quality improvement process in an organization.
Steps Crosby fourteen steps for quality improvement

Step 1: Establish and ensure management commitment.

Step 2: Form quality improvement team (QITs) for quality

improvement process planning and administration.
Step 3: Establish quality measurements.

Step 4 : Evaluate the cost of quality and explain its use as a

management tool to measure waste.
Step 5: Raise quality awareness among all employees.

Step 6: Take actions to correct problems identifies through previous

steps.
Step 7: Establish a Zero defects committee and programme.
Steps Crosby fourteen steps for quality improvement

Step 8: Train supervisors and managers on their role and

responsibility in the quality improvement process.
Step 9: Hold a Zero defects day to reaffirm management
commitment.
Step 10: Encourage individuals and groups to set improvement goal.

Step 11: Obstacle reporting (i.e., encourage employees to

communicate to management any obstacles they take in
attaining their improvement goals.
Step 12: Recognize and appreciate all participants.

Step 13: Establish quality councils to discuss quality matters on a

regular basis.
Step 14: Do it all over again to demonstrate that the improvement
process never ends.
 THE CROSBY VACCINE

In the Crosby style, the “Vaccine” is

explained as medicine for management to
prevent poor quality. It is in five sections that
cover the requirements of Total Quality
Management.
1.Integrity
Treat quality seriously throughout the whole
business organization from top to bottom. That
the companies future will be judged on its
performance on quality.
2.Systems
Appropriate measures and systems should
be put in place for quality costs, education,
quality, performance, review, improvement and
customer satisfaction.
3.Communication
The communication systems are of
paramount importance to communicate
requirements and specifications and
improvement opportunities around the
organization. Customers and operators know
what needs to be put in place to improve and
listening to them will give you the edge.
4.Operations
Work with and develop suppliers. Processes
should be capable and improvement culture
should be the norm.
5.Policies
Policies must be clear and consistent
throughout the business.
 BARRIER TO TQM
The various roadblocks/impediments/ obstacles in
implementing TQM are:
1. Lack of management commitment.

2. Lack of faith in and support to TQM activities

among management personnel.
3. Failure to appreciate TQM as a cultural
revolution. In other words , inability to change
organizational culture,
4. Misunderstanding about the concept of TQM

5. Improper planning

6. Lack of employees commitment.

7. Lack of effective communication.

8. Lack of continuous training and education.

BARRIER TO TQM
9. Lack of interest or incompetence of leaders.
10. Ineffective measurement techniques and lack of
access to data and result.
11. Non-application of proper tools and techniques.
12. Inadequate use of empowerment and team
work.
13. Inadequate use of empowerment and team
work.
14. Delay or non-implementation of quality
improvement team’s recommendations.
 CUSTOMER FOCUS
Customer-focus:
With TQM, everything comes down to customer
satisfaction. Customer satisfaction determines the
success of your company’s TQM project or strategy. If
customers are happy, your improvements worked. If
they’re dissatisfied, it’s time to re-evaluate your
strategy.
What is customer satisfaction?
As emphasized so far, in today's buyers market
‘the customer is the king’. Even the definition of quality
, ‘quality is what customer wants’, emphasizes on the
customer requirements. In other words , quality is a
measure of customer satisfaction. It is obvious that
business cannot survive without satisfied customer
expectations, so that the customers are delighted.
CUSTOMER SATISFACTION MODEL
 Teboul’s model of customer satisfaction. The
customers needs are represented by the circle,
and the square represents the product or service
offered by the company. The intersection portion ,
shown with dots, it perceived as the customer
satisfaction. So it is understood that the company
should strive for increasing the intersection
portion i.e.., customer satisfaction.
Who are the customers?
Customer is anyone who impact by the product or
process.
The customers are :
 The most important people in the business.

 Customers are not dependent on the

organization. The organization depends on them.
 Not an interruption to work but are the purpose
of it.
 Doing a favor when they seek business and not
vice versa
 A part of business, not outsiders.

 Customers are life blood of the business.

 TYPES OF CUSTOMER
Customers are two types. They are:
1. Internal customer

2. External customer

1. Internal customer:
The customers inside the company are called internal
customers.
As there us a flow if work, product and service in the
organization, each department is dependent on the
other. In this, each department or each quality
management unit is considered as a customer by the
previous department and as a supplier for the next
department. Similarly every person in a process is
considered as a customer of the preceding operation.
2. External customer:
The customers outside the company are called
external customer.
In other words, an external customer is the one:
 Who uses the product or service
 Who purchases the product or service; or
 Who influences the sale of the product or service.
 TYPES OF EXTERNAL CUSTOMER
1. Purchaser:
Someone who buys the product for himself or for someone
else e.g anyone who purchase food for his or her family.
2. End user/Ultimate customer:
Someone who finally benefits from the product e.g. the
patient who goes to health care facility for diagnostic
testing.
3. Merchants:
People who purchase product or output as an input for
resaler, wholesalers, distributors, travel agent , and brokers.
4. Processors:
Organization and people who use the product or output as
an input for producing their own product e.g.., a refinery that
receives crudes oil and processes it into different products for
a variety of customers.
 TYPES OF EXTERNAL CUSTOMER
5. Suppliers:
Those who provide input to the process.
6. Potential customers:
Those are not currently using the product
but capable of becoming customers.
7. Hidden customers:
Those who can exert great influence over
the product design : regulators, critics, opinion
leaders, payers, the media, corporate policy-
makers, labour union, professional
associations.
WHAT IS CUSTOMER ORIENTATION?

 Customer orientation is a business philosophy

that puts the needs of the customer over the
needs of the business. It's a way of thinking that
aligns your business goals with your customers'
goals.
 Customer-oriented companies recognize that
customers are the business. They understand
that the business won't thrive unless it
consistently improves customer focus.
CUSTOMER-ORIENTED SKILLS
 Customer-orientation isn't only about customer
service, but it requires support teams to master
key customer service skills.
 Here a few skills of customer-oriented teams:
 Empathy
 Ability to understand and act on customer data
 Agility: customer-oriented companies quickly
adapt to customer needs
 Effective communication
 Active listening
 Problem-solving skills
 Customer focus
CUSTOMERS COMPLAINTS (CUSTOMER
FEEDBACK)
Why is the customer Feedback/ Customer
complaint necessary?
Customer feedback or customer complaint is
required..
 To discover customer dissatisfaction

 To identify customers needs

 To discover relative priorities of quality

 To compare performance with the competition,

and
 To determine opportunities for improvement.
TOOLS USED FOR COLLECTING CUSTOMER
COMPLAINTS

Some of the tools used for collecting customer

complaints are:
1. Comment card

2. Customer questionnaire

3. Focus group

4. Toll free telephone numbers

5. Customer visits.

6. Report cards

7. The internet and computer

8. Employee feedback.
 CUSTOMER RETENTION
Customer retention is the process of retaining
the existing customer. It is obvious that customer
retention is more powerful and effective than
customer satisfaction.

Customer care can be defined as every activity which

occurs within an organization that ensure that a
customer is not only satisfied but also retained.
The following research finding will enable us to
understand the real significance of customer
retention. The important research finding are:
 The following research finding will enable us to
understand the real significance of customer retention.
The important research finding are:
1) Over 60% of an organizations future revenue will come
from existing customers.
2) A 2% increase in customer retention has an equivalent
impact upon profitability as a 10% reduction in
operating costs.
3) Upto 96% of unhappy customers do not infact
complain but they are three times more likely to
communicate a bad experience to other customers
than a good one
4) It costs 5 times as much to attract a new customer as
it cost to keep an old one.
Thus the customer retention is more essential than
attracting new customer.
 Customer retention represent the activities that
produce the necessary customer satisfaction that
create customer loyalty.
 Customer retention really moves the customer
satisfaction to the next level called customer
delight.
Thank you….