Chapter 16
Total Quality Management
Chapter Overview
Chapter 16 provides an overview of Total Quality Management (TQM), an integrative management framework designed to develop an environment of continuous improvement. TQM recognizes the existence of internal and external customers. The recognition of internal customers leads to a focus on doing everything in the business correctly the first time, because all quality problems eventually affect customer perceived quality. A variety of approaches to achieving TQM objectives have evolved. Included are certification programs and award programs.
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Chapter Resources |
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Esources |
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| Esource 16.1 | Internal and external quality is so important that many companies outsource aspects of both. One company, Convergys, is involved in as a provider of customer and employee care. Their customer contact technology provides call center expertise. Convergys also provides employee services. |
| Esource 16.2 | Benchmarking the best practices of businesses has become a critical component of improvement efforts. Many resources have evolved to put companies seeking best practices to learn about and companies that have developed high levels of competence. Some practices are industry specific, but others are quite universal. Best Practices LLC is an example of a service offering benchmarking information. Notice how Best Practices LLC provides industry-focused, as well as generic business practice benchmarking information. |
| Esource 16.3 | Aero Company produces equipment for industrial and aviation safety. they specialize in hearing protection, eye protection, and respiratory protection. All nine of the Aero manufacturing plants are ISO certified. This certification provides them with the ability to do business with companies worldwide, and promotes a focus on quality that is so important for producers of safety-related equipment. |
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Reel Operations Video |
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| Reel Operations 16.1 | Honda has a history of high quality products. In Honda: Structured Process for Continuous Improvement, we get a view of how data collection and constant vigelence help to maintain the reputation of high quality. |
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Supplementary Readings |
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| Supplementary Reading 16.1 | Following quality problems related to sport utility vehicles and Firestone tires, Ford faced numerous quality and culdtural problems in 2001 and 2002. In "Ford: Why It's Worse Than You Think (Business Week, June 25, 2001), Ford's problems are discussed from the perspective of the CEO's role, as well as employee culture and morale. |
| Supplementary Reading 16.2 |
Many retailers have learned that information and service that can be provided to customers can be the competitive edge that increases market share. In Adventures in Retail, (Fast Company, December 1997) the quality-oriented culture of REI's flagship store in Seattle is examined. |
| Supplementary Reading 16.3 |
For GE's six sigma effort, former CEO Jack Welch was a champion, but in Quality Isn't Just for Widgets, Business Week, July 22, 2002 we see where else six sigma has applications. |
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Links to Operations On Site Companies |
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| Operations On Site 16.1 | Nelson Name Plates, a manufacturer of membrane switches and name plates, has found great success in its quality improvement program. |
| Operations On Site 16.2 | ASQ's Examination of the 2000 Presidential Election provides an interesting view of the systematic causes of the problems associated with that election. |
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OM Exploration |
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Check it out: Internet Reference Sites |
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| TQM has been a popular management framework for enough time that many resources have been developed. A sampling of the TQM-related resources available on the Internet are provided below. | |
| The American Society for Quality (ASQ) | The W. Edward Deming Institute |
| The Malcomb Baldrige National Quality Award | The Juran Institute |
| The Malcomb Baldrige National Quality Award Recipients | Philip Crosby and Associates |
| The Kaizen Institute | ISO14000 Information Center |
| Official ISO Website | Quality Digest |
| Links to Quality Awards | Isixsigma.com |
| GE's What is Six Sigma? | |
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OM in Action |
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| OM in Action 16.1 | Intrawest has received much praise for its resourt
management success. It credits its formula
for success as being a major part of its ability to improve. Read
the Intrawest Formula for Success. a. How does the formula for success compare to TQM? b. Does it address all three TQM principles? |
| OM in Action 16.2 | University of Wisconsin-Stout was awarded the 2001 Malcomb
Baldrige National Quality Award for Education. Read the profile
of UW-Stout. a. After reading the profile, which aspects of US-Stout's quality program are customer focused (assuming the student is the customer)? b. From what you have read, how does your college or university compare to US-Stout from a quality standpoint? |
| OM in Action 16.3 | The 2001 Small Business Recipient of the Malcomb Baldrige
National Quality Award was Pal's sudden Service, a quick-service
restaurant company. Read Pal's
profile. a. Based on the profile, what aspects of Pal's success relate to the three TQM principles of customer focus, continuous process improvement, and total involvement? b. How important do these principles appear to be for Pal's success? |
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Online Business Tour |
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| Online Business Tour 16.1 |
ABBA Rubber International produces rubber rollers for a variety of industrial
uses. Take the ABBA tour. a. Identify the characteristics of ABBA that point to a quality-oriented culture being prosent. b. What evidence of "internal quality" is present? How would poor quality there affect external quality? c. As a B2B supplier, how does ABBA enhance its customer's ability to achieve high quality levels at low cost? |
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Letters from the Top |
| Letters from the Top 16.1 |
Sony has 5 businesses:
electronics, games, music, pictures (movies), and insurance. Maintaining a
link between such diverse businesses requires significant attention to keeping
business strategies in line with corporate strategy. Read the 2000
message from the Sony CEO. For "Structural Reform" to be such a
prominent topic in the letter to shareholders, it must be of significant
strategic importance.
a. What do you think "unified dispersed" management means? |
| Letters from the Top 16.2 |
Caterpillar Chairman and CEO Glenn Barton, in his
2001 letter to shareholders (page 3), describes a focus on six sigma
and mentions that it is "the core of our strategy, unifying activities to
ensure strategic success." a. Based on the letter to shareholders, what is the Caterpillar strategy? b. How can six sigma unify the elements of the Caterpillar strategy?
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Putting It All Together: A Virtual Case Study |
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| Putting It all Together 16.1: |
In Autos: A New Industry, Business Week, July 15, 2002, the state of the
U.S. auto industry is described as changing into the center of
foreign-owned, highly efficient factories, with little resemblance to the
traditional U.S. automobile plant. These changes have roots in
productivity and quality differences between of U.S. manufacturers and
their offshore competitors. a. What practices cited in the article make a difference to productivity and quality? Are these practices impossible for U.S. manufacturers? Are the U.S. approaches inherent in U.S. business systems or are they cultural? b. Read the 2001 Letter to GM shareholders. From this letter would you suspect that the kind of changes described in the Business Week article were occurring? Explain. c. What aspects of U.S. business practice must auto manufacturers change if they are to maintain their market share? |
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Additional Reading |
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| Additional Reading .1 |
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