Question

Briefly describe TQM and Six Sigma Approaches to quality. What are the key elements of each of the approaches? Are there instances when one approach is preferred over the other? Explain your rationale.

Answer 1

1. TQM

Ans: Total Quality Management (TQM) describes a management approach to long-term success through customer satisfaction. In a TQM effort, all members of an organization participate in improving processes, products, services, and the culture in which they work.

Total Quality Management Principles: The 8 Primary Elements of TQM

Total quality management can be summarized as a management system for a customer-focused organization that involves all employees in continual improvement. It uses strategy, data, and effective communications to integrate the quality discipline into the culture and activities of the organization. Many of these concepts are present in modern Quality Management Systems, the successor to TQM. Here are the 8 principles of total quality management:

1. Customer-focused

The customer ultimately determines the level of quality. No matter what an organization does to foster quality improvement—training employees, integrating quality into the design process, upgrading computers or software, or buying new measuring tools—the customer determines whether the efforts were worthwhile.

2. Total employee involvement

All employees participate in working toward common goals. Total employee commitment can only be obtained after fear has been driven from the workplace, when empowerment has occurred, and management has provided the proper environment. High-performance work systems integrate continuous improvement efforts with normal business operations. Self-managed work teams are one form of empowerment.

3. Process-centered

A fundamental part of TQM is a focus on process thinking. A process is a series of steps that take inputs from suppliers (internal or external) and transforms them into outputs that are delivered to customers (again, either internal or external). The steps required to carry out the process are defined, and performance measures are continuously monitored in order to detect unexpected variation.

4. Integrated system

Although an organization may consist of many different functional specialties often organized into vertically structured departments, it is the horizontal processes interconnecting these functions that are the focus of TQM.

• Micro-processes add up to larger processes, and all processes aggregate into the business processes required for defining and implementing strategy. Everyone must understand the vision, mission, and guiding principles as well as the quality policies, objectives, and critical processes of the organization. Business performance must be monitored and communicated continuously.
• An integrated business system may be modeled after the Baldrige National Quality Program criteria and/or incorporate the ISO 9000 standards. Every organization has a unique work culture, and it is virtually impossible to achieve excellence in its products and services unless a good quality culture has been fostered. Thus, an integrated system connects business improvement elements in an attempt to continually improve and exceed the expectations of customers, employees, and other stakeholders.

5. Strategic and systematic approach

A critical part of the management of quality is the strategic and systematic approach to achieving an organization’s vision, mission, and goals. This process, called strategic planning or strategic management, includes the formulation of a strategic plan that integrates quality as a core component.

6. Continual improvement

A major thrust of TQM is continual process improvement. Continual improvement drives an organization to be both analytical and creative in finding ways to become more competitive and more effective at meeting stakeholder expectations.

7. Fact-based decision making

In order to know how well an organization is performing, data on performance measures are necessary. TQM requires that an organization continually collect and analyze data in order to improve decision making accuracy, achieve consensus, and allow prediction based on past history.

8. Communications

During times of organizational change, as well as part of day-to-day operation, effective communications plays a large part in maintaining morale and in motivating employees at all levels. Communications involve strategies, method, and timeliness.

These elements are considered so essential to TQM that many organizations define them, in some format, as a set of core values and principles on which the organization is to operate. The methods for implementing this approach come from the teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa, and Joseph M. Juran.

2. SIX Sigma.

Ans: Six Sigma is a disciplined, statistical-based, data-driven approach and continuous improvement methodology for eliminating defects in a product, process or service. It was developed by Motorola in early to middle 1980’s based on quality management fundamentals, then became a popular management approach at General Electric (GE) in the early 1990’s. Hundreds of companies around the world have adopted Six Sigma as a way of doing business. Read more about the history of Six Sigma >>>

Sigma represents the population standard deviation, which is a measure of the variation in a data set collected about the process. If a defect is defined by specification limits separating good from bad outcomes of a process, then a six sigma process has a process mean (average) that is six standard deviations from the nearest specification limit. This provides enough buffer between the process natural variation and the specification limits.

Six Sigma is a methodology that primarily focuses on eliminating defects in the business process. Motorola was the first company to introduce Six Sigma methods in its manufacturing process. These principles were employed by the company to bring down the defect rate in their production line. After it was implemented by Motorola, these Six Sigma methods were practiced by various other companies. Six Sigma principles caught the eye of various companies located around the globe when the General Electric company earned $300 million because they implemented Six Sigma principles in their manufacturing process. Well, that’s not the end of the story, these principles were also employed by healthcare, telecommunications, education, finance, military and service sectors. These results proved that Six Sigma methods are appropriate for meeting business goals and objectives in an efficient manner. Six Sigma is an organizational structure that concentrates on continuous improvement. The primary objective of this methodology is to achieve goals and objectives set by the organization in an efficient manner keeping costs and defect rate at a minimal point.

Overview of Lean
Lean manufacturing primarily concentrates on speed and inventory in the production process. Lean manufacturing basically focuses on sources of waste such as transportation, inventory, movement, work in progress, and defects.

Lean makes use of five methods that enables an organization to cut down on the waste during their business process. These methods are as follows:

• Determining customer value

• Mapping the value stream

• Creating flow

• Seeking perfection

• Pulling based on demand

Six Sigma basically concentrates on the root cause analysis and Lean focuses on speed waste elimination and simplicity of the solution. By combining both Six Sigma and Lean, we get best of two methodologies. These methodologies provide desired results.

What is Lean Six Sigma?
As discussed in the earlier paragraphs Lean Six Sigma is a combination of Six Sigma and Lean methods. By combining these two processes and implementing these methodologies within an organizational structure, results in process improvements, waste reduction, effective monitoring, which would eventually lead to increase in the profit margins. Organizations must follow a set of rules and regulations for obtaining the desired result after implementing Lean Six Sigma methods.

Listed below are the success factors of Lean Six Sigma:

Leadership Responsibility

For the success of any project, the project leader plays a critical role. The project leaders have the responsibility to prioritize all business activities in the right sequence. They have to ensure that all the resources are available to the team to start the production process.

Allocation of Right Resources

It is always advisable that a project manager employs right members in the project team. If the team members are already Six Sigma certified members then the project manager can assign them the task of monitoring the project development process, as they are well versed with all the methods and techniques of Lean Six Sigma.

Training for the Employees

Proper training sessions have to be conducted for the employees of the organization so that they have a complete knowledge about the project and also the tools that are required for completing the project successfully.

Project Approach

The project status must be reviewed at regular time intervals, this can be done by conducting team meetings, stakeholders, and senior management team. The feedback and suggestions must be shared with all the members associated with the project.

Reporting

It is important that all the procedures must be correctly documented, which will give the organization a complete information about the financial impact that has been created after implementing Lean Six Sigma methodologies. In other words, the financial impact of every Six Sigma project must be properly measured and reported by the project manager.

Benefits Of Lean Six Sigma?

There are many benefits of Lean Six Sigma. Listed below are few:

Customer benefits

Lean Six Sigma benefits are not only confined to the organization, but it is also beneficial for the customers. With the help of Lean Six Sigma methods customers receive the final product according to their specification and quality, and this will lead to customer retention which is beneficial for the organization.

Stakeholder benefits:

Stakeholders are also benefited by Lean Six Sigma methods as these procedures cut down on the waste during the business, resulting in higher profit margins.

Employee benefits

As part of Lean Six Sigma methodology, all the employees will be thoroughly trained. They all will get the information required for successfully completing the project and also good knowledge about the tools that they have to work with.

Conclusion

Lean Six Sigma concepts completely focus on the improving business processes and concentrated on bringing waste to a minimal level. Even start-up companies can implement Six Sigma methods to successfully achieve their goals and targets.

Six Sigma and TQM Preference:

Six Sigma and TQM are both quality-improvement systems and attempt to reduce defective products or poor service in an organization, while improving customer satisfaction. Both approaches first and foremost attempt to identify the fundamental sources of defects and provide lasting cures that will permanently enhance quality. If delivery trucks often arrive late at customers' stores, for example, both systems look far beyond the trucks, warehouses and loading docks. Six Sigma and TQM analyze large portions of the business, identifying problems that might not appear connected at first sight and review the culture that might be leading to quality issues. The scope as well applications of these systems, however, differ upon closer inspection.

Focus and Scope

One difference between the two systems lies in their areas of focus. While TQM concentrates on individual departments and more specific quantitative goals, TQM's ultimate focus is customer satisfaction. The path that takes the business toward that final goal is secondary. TQM must be redefined when the predetermined goals are accomplished. Six Sigma, however, aims at continuous improvements and is self-propelled. Six sigma, when correctly applied, will continue to yield benefits after the original goals have been realized as it instills a culture that forever aims to improve performance.

Application

Six Sigma projects are managed by "black belts" who have gone through formal training and have a proven track record in quality gains. These individuals work full time on Six Sigma in their departments but return to their previous jobs after a few years. TQM is run by the quality control department and professionals who specialize on quality improvements, usually, for their entire career. Six Sigma aims to spread the ownership of quality improvement to the entire organization while those who run TQM are more experienced in the quality field. Six Sigma is often driven by a focus on cutting costs and tends to work best if it has specific financial goals. TQM, however, pursues objectives that are harder to boil down to a single figure, such as customer satisfaction and long-term strategic excellence.

Lesson for the Small Business

Small businesses can use principles from these two systems, understanding that cost-cutting and increased customer satisfaction can go hand in hand. If cost-cutting also effectively targets the root causes of customer complaints and defects, the job will be done right the first time with as little waste as possible. Furthermore, every employee, even the delivery person working for you during her summer break, must focus on the end result: the quality of the final product and customer experience above all else. Doing exactly what you're told is good. Questioning whether the job can be done better and communicating ideas to co-workers is better.