TQM and Six Sigma in Industries: Application, Challenges, and Impacts

This paper discusses the application of total quality management and Six Sigma in business organisations, their challenges, and impacts on supply chain. It also covers TQM 14 points, role of technology in Six Sigma, gap analysis, recognition of errors, decision tree, and quality and cost issues.

Running head: TQM AND SIX SIGMA IN INDUSTRIES
TQM and Six Sigma in Industries
Name of the Student:
Name of the University:
Author

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TQM AND SIX SIGMA IN INDUSTRIES
Table of Contents
Introduction:...............................................................................................................................3
TQM 14 points:..........................................................................................................................3
Six Sigma – Some companies do not use it:..............................................................................5
Role of technology in Six Sigma:..............................................................................................5
Difficulty some companies face in application of Six Sigma:...............................................6
Influence of TQM and Six Sigma on supply chain:...................................................................7
Gap Analysis:.............................................................................................................................7
Steps of operation in flow chart:............................................................................................8
True quality applied:..............................................................................................................8
Global quality:........................................................................................................................9
Function quality:....................................................................................................................9
Steps of recognition of error in flowchart:.............................................................................9
Areas of mistakes:................................................................................................................10
Saving and improving mistakes:..........................................................................................10
Decision tree:...........................................................................................................................11
Quality issue:........................................................................................................................12
Cost issue:............................................................................................................................12
Necessary issue:...................................................................................................................12
Recommendations (Combination of TQM and JIT approach)................................................13
Summary/Conclusion:..............................................................................................................13

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TQM AND SIX SIGMA IN INDUSTRIES
References:...............................................................................................................................14

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TQM AND SIX SIGMA IN INDUSTRIES
Introduction:
The paper delves into the application of total quality management and Six Sigma in
business organisations. Total quality management is defined as management of modes of
operations and culture within organisations, which leads to production of higher quality
products to customers. Six Sigma is a collection of tools and techniques used to improve
manufacturing methods. The industries of today combine this two quality management tools
to obtain high quality products. Multinational companies like Ford Motor Company from the
automobile sector, Philips from electronics sector and Motorola for the telecommunications
sector use TQM. Six Sigma was introduced at Motorola by Bill Smith and Mikel J Harry and
is still in use. Some of the other companies using Six Sigma are Bank of America from the
financial industry, Amazon from ecommerce industry and Caterpilar Inc from the engineering
industry.
TQM 14 points:
Edwards Deming proposed fourteen criteria for TQM, which are as follows:
1. The manufacturing companies should aim towards improvement of their products.
2. They should always adapt to changes in the market and bring about necessary changes in
their operations.
3. The companies should not be dependent on producing high quality products merely to
qualify in quality audit. Quality should be used to gain customer satisfaction.
4. The business organisations should collaborate with a limited number of suppliers
producing high quality raw materials at economic rates instead of working with multiple

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suppliers producing low quality materials. This will help them to reduce total cost and
produce goods more economically.
5. Continuous improvement in all the processes and areas of operations.
6. The management, the HR departments and the departmental heads should offer trainings to
the staff members on regular basis to improve their skills and efficiency.
7. The upper and middle level employees should exemplify leadership in the organisations by
their actions like adopting diversity management.
8. The upper and the middle level employees should provide counselling to the lower level
employees and deal with their fears and insecurities.
9. Every staff should establish and maintain a transparent and smooth communication
channel.
10. The management should not coerce the lower level employees to achieve high level
productivity and stop the middle level managers from doing so. They must ensure that the
lower level employees and executives are not subjected to any sort of unethical practices.
11. The departmental heads should segregate the total target among the department
employees based on their skills, knowledge, competencies and education.
12. The performance of the employees should be evaluated based on all round performance
of the employees like their target achieved and innovative power. The superiors should give
due credit to the subordinates for their performances to enhance their morale and self respect.
13. The apex management must create an environment to ensure all round development of the
employees.
14. All the employees should have access to career planning and development opportunities.

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TQM AND SIX SIGMA IN INDUSTRIES
Six Sigma – Some companies do not use it:
Pyzdek and Keller (2014) state the adoption and application of Six Sigma requires
initiation of a pilot project, which involves a team of employees. The new team members are
required to be trained to follow the new policies. It requires installation of new plants, which
are capable of giving high productivity. The management has to plan and evaluate the
strategies of the Six Sigma, which is time consuming. Sarkar, Mukhopadhyay and Ghosh
(2014) state that, compared to conventional methods of operation, Six Sigma requires huge
initial investments in acquisition of plants, human resources and technology. This prevents
the smaller firms from using Six Sigma.
Role of technology in Six Sigma:
Albliwi et al.(2014) mention that, technology plays a very important in adopting and
implementation of Six Sigma. They state that companies install modern machinery to make
their manufacturing processes faster and minimise defects in the finished products. Corrigan
(2015) contradicts this opinion and states that technology is not the only important
component of Six Sigma. The commitment of the apex management to offer high quality
goods to customers, financial strength and skills of the employees also play significant role in
achieving Six Sigma. Thus, technology plays a significant role in Six Sigma but its successful
depends on the other important factors like financial strength of the organisation.

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TQM AND SIX SIGMA IN INDUSTRIES
Figure 1. Diagram showing Six Sigma
(Source: sixsigmadaily.com, 2017)
Difficulty some companies face in application of Six Sigma:
As pointed out in the analysis above, difficulty in application of Six Sigma are of
various categories. Six Sigma requires installation modern multitasking production plants and
people having knowledge in operating them. Thus, the companies require spending immense
funds to acquire the plants, the knowledge and skilled human labour (Prashar, 2014). The
discussion clearly shows that the difficulty in application of Six Sigma pertain to high costs
to acquire plants, human resource and knowledge which small firms cannot achieve owing to
their limited resources.

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TQM AND SIX SIGMA IN INDUSTRIES
Influence of TQM and Six Sigma on supply chain:
Six Sigma has profound impacts on supply chains of companies using them. This is
because application of Six Sigma requires the organisations install new machinery and plants
which is capable of processing high quality materials. As a result, the firms have to
restructure their supply chains to acquire high quality raw materials (Christopher, 2016).
Moreover, the companies have to acquire new suppliers of the parts of modern machinery
(Ellis et al., 2014). Thus it can evaluated that Six Sigma has profound influence on the supply
chains of the organisations.
Gap Analysis:
Gap analysis refers to comparison between the target levels of performance compared
to levels of performances actually achieved. The figure below shows that application of gap
analysis in the manufacturing organisations. The project managers first define the objectives,
which consist of the level of efficiency they want to achieve. The next step consists of
measuring the current level of efficiency prevailing in the company. The business
organisations judge the gap between the aimed and the actual level of performance achieved
in diverse areas like business process and information technology (van Ittersum et al., 2013).
They implement methods like Six Sigma and TQM to bridge the gap by improving their
operation methods like installing modern machinery to produce goods.
Objectives Current Standing Deficiency Action Plan
1. To be filled by the
project managers
To be filled by the
project managers
To be filled by the
project managers
To be filled by the
project managers
2. To be filled by the
project managers
To be filled by the
project managers
To be filled by the
project managers
To be filled by the
project managers

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TQM AND SIX SIGMA IN INDUSTRIES
Figure 2. A Gap analysis chart
(Source: Author)
Steps of operation in flow chart:
Figure 3. Gap analysis flow chart
(Source: Author)
The above flowchart shows that steps of gap analysis in operations in companies. The
first step is to plan to conduct a gap analysis. This can be done by comparing the present
skills of the employees to the skills, which they may require in the future. The second stage
comprises of recognising the gaps in the present skills, which the employees need to enhance
to operate successfully in future projects. The managers after identifying the skills
employees possess and the skills they would require to possess, take appropriate actions like
offering training facilities to the employees.
True quality applied:
True quality can be defined as the attributes in products, which makes them superior
to the products of similar category. The business organisations apply the concept of quality
closely to engineering or technology, which they use to manufacture products. The concept of
quality is subjective and consumers often perceive quality as an outcome of total quality
Standard performance level Indentify important skills
Measure current skillsTake actions on the data

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TQM AND SIX SIGMA IN INDUSTRIES
management by the producers (Flanagin et al, 2014). These perceptions of customers today
have led to multinational companies regard true quality as a tool of ensuring customer
satisfaction and revenue generation.
Global quality:
The term global quality refers to the uniform high quality of the products, which
multinational companies maintain in all their markets. True quality is applicable for the all
the firms irrespective of the sizes and industries of operation (Netland & Sanchez, 2014).
However, global quality is applicable only for the multinational companies, which
manufacture, market and sell products throughout the world. These companies have
predetermined quality parameters, which they maintain for their products in all their markets.
An analysis of the business operations of these companies reveal that global quality embraces
various aspects like supply chain management and employee management (Brettel et al.,
2014).
Function quality:
The manufacturing companies today incorporate the requirements of the consumers in
their techniques of production. The production departments use charts and figures
representing consumer expectations, which they incorporate in appropriate stages (Baily &
Bosworth, 2014). Bi, Da Xu and Wang (2014) state that compared to the traditional
production process, modern production essentially integrates marketing and production
departments. The production department incorporates the customer knowledge from the
marketing department to create products with functional quality capable of meeting customer
expectations.
Steps of recognition of error in flowchart:
The following are the steps of recognition of errors in flowcharts:

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TQM AND SIX SIGMA IN INDUSTRIES
1. Define the target:
The production manager should define the target quality of products the company
wants to achieve. They should set the parameters of quality which every product should meet
to satisfy the customers.
2. Recognise the path:
The production manager should define the path the production process should follow.
He should ensure that every step of production follow the predetermined steps.
3. Measure the actual flow of process:
The production manager should measure the actual flow of the process of the
production. If he locates any discrepancy, must take steps to rectify them.
Areas of mistakes:
The mistakes which the production processes can meet with are human error,
technological error and design error. Human error refers to mistakes in inputting instructions
while operating machines. The technological error refers to faults in machines and sudden
blockages, which influences smooth production. The design errors refer to errors in designing
the finished products. The production managers should be careful to avoid these errors to
ensure production of high quality products.
Saving and improving mistakes:
As discussed, mistakes can be in three areas namely, human, technological and
design. The production managers in case of technological mistake or machine breakdown
must investigate the reason for the breakdown, frequency of the breakdown and the dealers
who supply the machine parts and the pieces of machines (Baily & Bosworth, 2014). The
managers should take steps to ensure that the breakdown is rectified and minimised.

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TQM AND SIX SIGMA IN INDUSTRIES
The production managers should inspect the causes of human mistakes and if they are
chronic or exceptional. If the mistake is chronic, they may take initiative to train their
employees. Responsible and skilful employees to avoid such mistakes in future may replace
the irresponsible employees. The managers may consult external consultants to deal with
exceptional errors like data thefts to avoid such mistakes for recurring.
Decision tree:
A decision tree is a flowchart which contains the possible strategies of production
which shows and their outcomes. The tree shows costs, resources to be allocated, the risks the
plans can face. They also show alternative ways which managers can choose to avoid these
mistakes. The figure below shows that measurements, counts, count pieces and count
occurrences. Ech of these steps can be divided into two steps like one step leads production
units range between 2-9 while other step leads to production of 10 units and above. The
production managers take decisions as per their requirements. For example, if the demand is
high, they would prefer the process leading to 10 or more units. They would normally prefer
production method leading to 2-9 units in the lean season to avoid overproduction.
Figure 4. Decision tree
(Source: qualitydigest.com, 2017)

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TQM AND SIX SIGMA IN INDUSTRIES
Quality issue:
The quality issue arises in the business organisations because they perceive quality as
a tool to maximise customer satisfaction. The organisations spend a huge amount of money to
manage quality of the finished products. The six quality issues which business organisations
face are duplicate products, incomplete data about the product which hinders production, the
product design varies from the customers’ preferences, the raw materials are difficult to
acquire, system up gradation and loss of manufacturing data and loss or theft of data about
products.
Cost issue:
The companies aim to gain sustainability to reduce cost of operation and issue has
become a very crucial issue. With the increasing in operating costs, the companies are trying
to introduce TQM to improve the all round development of the operations in them. The
companies consider it prudent to follow lean management and reduce their expenditure
(Frias‐Aceituno, Rodríguez‐Ariza & Garcia‐Sánchez, 2014).
Necessary issue:
The necessary issues consist of those requirements, which have become important for
companies to enhance customer satisfaction like providing after sales supports. The necessary
issues do not form a part of production processes ore are related to cost issues. They are
those issues which have become crucial for companies to maintain the consumer base and
earn huge revenue from them.

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TQM AND SIX SIGMA IN INDUSTRIES
Recommendations (Combination of TQM and JIT approach)
Keeping the above discussion into consideration, one can make the following
recommendations:
1. The multinational companies should use combination of TQM and JIT or just in time to
manage these related to breakdown and human error. For example, they should install
modern and multitasking machinery to produce their products. This would help the
production departments produce products using less number of machinery. They should train
their employees and the mangers should monitor the junior.
2. The production manager should manage the resources efficiently to ensure that the raw
materials are orders at correct time so the production process can continue smoothly. They
should apply software to manage the inventory and finished goods. This would help them to
minimise wastage of resources due to over production and fall in demand on temporary basis.
Summary/Conclusion:
The business organisations should adopt total quality management and Six Sigma to
ensure high quality finished products. They must maintain high quality for their finished
products sold globally. The companies must stress on adoption of modern technology, which
would allow them to locate defects in production and take steps to rectify them. The
companies must take steps to manage materials more accurate to minimise excess storing of
materials and ensure liquidity in production.

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Bi, Z., Da Xu, L., & Wang, C. (2014). Internet of things for enterprise systems of modern
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ecommerce transactions: perceptions of information credibility and the role of user-

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