WORLD CITI COLLEGES

GRADUATE SCHOOL
WORLDCIT OLEGS
GRADU TESCHO L 1

Chapter 5 (Part 4)

TOTAL QUALITY MANAGEMENT

A core definition of 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.

Basic Concepts: TQM requires six basic concepts

1. A committed and involved management: TQM is a continual long-term activity that must be
imbibed in the culture of the organization. Everything begins with the long-term-top-to-bottom-
organization support. Management must participate in the quality program, establish a council to
develop clear vision, set goals and direct the programs.
2. An unwavering focus on the customer: Customers are the very purpose of any organization.
Key to an effective TQM is orienting all activities towards the need of the customer, both
internally and externally.
3. Effective involvement and achievement of the entire work force: Implementing TQM is
everyone’s responsibility. Employees are the future of any organization. All personnel must be
trained in TQM, its tools. They must be empowered to perform processes in an optimal manner.
4. Continuous improvement of the business and production processes: All employees must
continually strive to improve all business and production systems.
5. Treating Suppliers as Partners: 40 to 60 % of the product cost is outsourced. So all supplier
organizations have to be treated as extension of one’s organisations.
6. Establish Performance measures: Measure and prosper. Measures should be available to note
downtimes, nonconformities and satisfaction of customers, absenteeism etc.

PRIMARY ELEMENTS OF TQM

TQM 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
 WORLD CITI COLLEGES
GRADUATE SCHOOL
WORLDCIT OLEGS
GRADU TESCHO L 1

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, or upgrading computers or software—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 when 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 (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

Award 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.
 WORLD CITI COLLEGES
GRADUATE SCHOOL
WORLDCIT OLEGS
GRADU TESCHO L 1

6. Continual improvement: A large aspect 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.

The advantages of total quality management (TQM) include the following:

1. Cost Reduction
When applied consistently over time, TQM can reduce costs throughout an organization, especially
in the areas of scrap, rework, field service, and warranty cost reduction. Since these cost reductions
flow straight through to bottom-line profits without any additional costs being incurred, there can
be a startling increase in profitability.
2. Productivity Improvement
Productivity increases significantly, since employees are spending much less of their time chasing
down and correcting errors. Increased productivity means more output per employee, which
typically results in increased profits.
3. Customer Satisfaction
Since the company has better products and services, and its interactions with customers are
relatively error-free, there should be fewer customer complaints. Fewer complaints may also mean
that the resources devoted to customer service can be reduced. A higher level of customer
satisfaction may also lead to increased market share, as existing customers act on the company's
behalf to bring in more customers.
 WORLD CITI COLLEGES
GRADUATE SCHOOL
WORLDCIT OLEGS
GRADU TESCHO L 1

4. Defect Reduction
TQM has a strong emphasis on improving quality within a process, rather than inspecting quality
into a process. This not only reduces the time needed to fix errors but makes it less necessary to
employ a team of quality assurance personnel.
5. Morale
The ongoing and proven success of TQM, and in particular the participation of employees in that
success can lead to a noticeable improvement in employee morale, which in turn reduces employee
turnover, and therefore reduces the cost of hiring and training new employees.

DISADVANTAGES OF TOTAL QUALITY MANAGEMENT

However, TQM also requires a significant training period for those employees involved in it. Since
the training can take people away from their regular work, this can actually have a negative short-
term effect on costs. Also, since TQM tends to result in a continuing series of incremental changes,
it can generate an adverse reaction from those employees who prefer the current system, or who
feel that they may lose their jobs because of it.

Where to Implement Total Quality Management

TQM works best in an environment where it is strongly supported by management, it is

implemented by employee teams, and there is a continual focus on process improvement that
prevents errors from occurring. TQM can be implemented successfully in any part of a business,
such as accounting, field servicing, finance, legal and administration, maintenance, manufacturing,
materials management, research and development, and sales and marketing.

References:
http://rmkec.ac.in/tmp/mech/Contents/totalqualitymanagement.pdf
https://asq.org/quality-resources/total-quality-management