Total Quality Management (TQM)

Total Quality ManagementTQM is a philosophy of management that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes.

It requires employees to rethink what they do and become more involved in workplace decisions.

What is Total Quality Management (TQM)?

Total quality management is a management philosophy of continuous quality improvement along with cost reduction in an environment of participative management through self-directed team development and employee empowerment, and quality-supportive culture where trained human resources would focus on monitoring process variations by using necessary tools and techniques for gaining competitive advantage through customer satisfaction.

It is a top-down process, and a means to an end, not an end in itself.

Features of TQM are:

  • It is a management philosophy with a specific focus on the customer.
  • It is a set of guiding principles that create the foundation of a continuously improving organization.
  • it is the application of quantitative methods and human resources of an organization to improve everything that it does.
  • It integrates fundamental management techniques and technical tools under a disciplined approach.
  • It emphasizes on employee empowerment and teamwork.

The major issues in TQM are discussed in the remainder of this section.

TQM as a Management Philosophy

Generally, philosophy refers to the most general beliefs, concepts, and attitudes of an individual or group. TQM is often viewed as a philosophy of management or a guiding set of principles that allows someone to manage better.

Concomitant to this view follows the suggestion that TQM requires the transformation of organizational cultures. Thus, a sharp difference exists between traditional management philosophy and TQM philosophy (see Table 10.1 for a brief comparison between the two).

Some of the differences are of a macro nature, some are more micro, but all entail a different way of looking at organizations, change, and management-employee relations.

Table: A comparison of traditional management principles and TQM principles.

Traditional Management PrinciplesTotal Quality Management Principled
The organization has multiple competing goals.Quality is the primary organizational goal.
Financial concerns drive the organization.Customer satisfaction drives the organization,
Management and professionals determine what quality is.Customers determine what quality is.
The focus is on the status quo – “If it ain’t broke, don’t fix it”.The focus is on continuous improvement.
Change is abrupt and is accomplished by champions battling the bureaucracy.Change is continuous and is accomplished by teamwork.
Employees and departments compete with each other.Employees and departments cooperate with each
Decisions are based on gut feelings. It is better to do something than to do nothing.Decisions are based on data and analysis. It is better to do nothing than to do the wrong thing.
Employee training is considered a luxury and a cost.Employee training is considered essential and investment.
Organizational commitment is primarily top-down.Organizational communication top-down, down-up, and sideways.
Contractors are encouraged to compete with each other on the basis of price.Long-term relationships are developed with contractors who deliver quality products and services.

 

There are 7 key elements that constitute the basic underlying philosophy of TQM. These are:

  1. Quality is a primary organizational goal.
  2. Quality is determined by an organization’s customers.
  3. Customer satisfaction drives the organization.
  4. Variation in processes must be understood and reduced.
  5. Change is continuous and is accomplished by teams and teamwork.
  6. Top management commitment is a must to promote a culture of quality, employee empowerment, and long-term perspective.
  7. Participation of contractors and suppliers in the TQM program.

Top-Down Process

TQM must have, in order to be successful, a top-down orientation. That is, top management of the organization must have spontaneous commitment to turn their organization into a TQM one, and accordingly, their efforts need to flow down.

Continuous Quality Improvement

Good is not good enough; there is always a scope to be better – keeping this adage in mind, TQM entails continuous quality improvement. Anything can be improved, always. TQM is not a one-shot activity; it is continuous, it keeps ongoing, it never stops it is an unending process.

With a long-term focus, quality improvement becomes an everyday activity; in order to strengthen competitive advantage in the market, organizations must endeavor to continuously improve quality of products and services which results in cost-savings and an increase in market share because of a reputation for having a quality product or service.

Continuous quality improvement is interlinked, in most cases, with continuous process improvement; (CPI).

It recognizes that substantial gains can be achieved by the accumulation of many seemingly minor improvements whose synergies yield tremendous gains over the long run. Jablonski cites an example of CPI from his own experience.

When he first went to work for the government, it took about six weeks to process a travel claim. Through a series of CPI substantial improvements occurred – the six-week cycle time was reduced to two weeks.

Participative Management and Employee Empowerment

TQM encompasses participative management in that it involves employees of all categories from all functions of the organization in decision making, beginning from goal setting to problem-solving to putting the things to work.

Participative management paves the way for the employees to actively and directly take part in decision making and thus it tends to create in themselves job involvement and organizational commitment.

We are interested here about the awareness of employee involvement for making TQM successful and not about its rationale and benefits that have been well’ documented elsewhere.

Although participative management may take many forms, ‘self-directed work team’ -seems to toe the most appropriate form for TQM implementation.

Quality circle (QC) which is a bottom-up approach in Japan or Works Council in France or Codetermination in Germany or Joint Consultation in the UK and the Scandinavian countries or Board Representation in India, all of these forms of participative management do not, in reality, allow all employees to involve themselves directly in all kinds of decision making in their organizations and therefore any of these are not suitable for TQM in the USA, for example, QCs have been largely unsuccessful.

Participative management does not occur in a day or two. It is an evolutionary process, adequate time is needed for its development and spreading throughput the origination, especially at the lower echelons Management needs to shoulder the responsibility for building an environment of participation.

Managers must be willing to support all kinds of employee involvement efforts or else the program would fail.

Unless employee involvement focuses directly; in making the organization more competitive in the market place, it will wither and not reach its potential. It cannot be thought of as a separate activity from regular daily work or from the competitiveness of the life company.

In addition, employees need to be imbued with the feeling to be supported by the reality that they are their own managers and are able to exert the necessary influence over their surroundings through exercising the power of making decisions and their implementation taking actions without relying on or relayed directions from someone more remote.

Monitoring Process Variation

Monitoring and controlling of process variation is an important element of TQM. Variation in a process a series of actions, operations that lead to a particular result – occurs when there is a deviation from standards/ specifications, Which invariably affects reliability and quality of products or services.

Unless the variations in the processes and systems are controlled through regular monitoring, attempt to maintain reliability and quality would be jeopardized.

Therefore, it is imperative to first clearly understand the nature of causes of variation in the processes, and, then to undertake measures to reduce, and, where possible to eliminate variation.

TQM experts agree that process variation is a natural phenomenon and can never be totally eliminated. This is mainly because there always exists ‘systems problems’ or common causes of variation that are inherent in the processes accounting for 85% of the variation in most processes which are beyond the ability of employees’ to control.

Only special causes can be controlled as because they affect from outside the system and they are caused by employees.

Monitoring and controlling of process variation applies to both manufacturing and non-manufacturing areas. Managers may follow five steps for this purpose:

  1. Identify products (hardware) and services (software) to be offered to customers.
  2. Specify who is external (outside the company) and internal (inside the company) customers.
  3. Identify the required quality for securing improved’ customer satisfaction.
  4. Find ways and means to realize the required quality.
  5. Confirm and evaluate the results of executing action plans.

Quality-Supportive Culture

A culture supportive of TQM is sine-quo-non for successful implementation of TQM. Organizations have to be free from cultural impediments or so to say organizational inertia.

It means that TQM demands quality culture which should consist of values, traditions, procedures, and expectations that promote quality. The following characteristics are common in organizations with quality culture:

  • Behavior matches slogans.
  • Customer input is actively sought and used to continually improve.
  • Employees are both involved and empowered.
  • Work is done in teams.
  • Executive-led managers are both committed and involved; responsibility for quality is not delegated.
  • Sufficient resources are made available where and when they are needed to ensure the continuous improvement of quality.
  • Education and training are provided to ensure that employees ar all levels have the knowledge and skills needed to continuously improve quality.
  • Reward and promotion systems are based on contributions to the continual improvement of quality.
  • Fellow employees are viewed as internal customers.
  • Suppliers are treated as partners.

Since we believe that a fundamental, transformation of organizational culture is absolutely necessary for the fruitful implementation of TQM as a philosophy of management, we would extensively deal, with this issue in a separate chapter.

Customer Satisfaction

The customer remains the focal point in TQM. The focus is not only on ’external customers such as those who buy products and services but also on the internal customers, i.e. those inside the organization who use the outputs of other colleagues.

As regards external customers, it is important to know in what way they contribute to the organization, and what their expectations are.

Similarly, because of the relationship inside the organization, between people and department, an understanding of the needs of and^relationship between internal customers is crucial to TQM implementation.

Dissatisfaction among the internal customers for any reason whatsoever maybe it is due to raw materials, or inefficient handling of things in one department or delay by one department to pass on an important information on time to another department related to the process or any other matter that affects the activities of colleagues in the organization has a bearing on the quality of products or services, thereby affecting the satisfaction of external customers on whom depends profitability.

TQM emphasizes that organizations take care of exceeding customers’ expectations, not only meeting the satisfaction of external customers or buyers of products and services, and in fact propagates for ‘customer obsession.’

Customers buy not a product but a ‘total experience’ (anything that the company offers with the basic product or service such as booklet, instructions, packaging or wrapping, etc.) If any part of the offering is wanting, the company would be considered as not having quality.’

Total, Quality Tools and Techniques

Beginning from the design phase through production of a product a few statistical tools need to be employed These are total quality tools In the words of Goetsch and Davis, ‘they are not wood and steel to be used with muscle; they are tools for collecting and displaying information in ways to help the human brain grasp thoughts and ideas that, when applied to physical processes, cause the processes to yield better results.”

The tools facilitate the visual display of information and they can be used to identify the causes of work-process problems. However, a signal of warning is often raised about too much emphasis on the use of these tools for TQM- related activities which might lead to failure of TQM effort.

The apprehension is that ‘they can act as blinders and prevent people from seeing and dealing with the far more important elements of TQM, customers, and culture.’ In spite of all these, arguments, we believe that tools are important and they need to be used for facilitating human rational thinking in solving problems that occur in the work processes.

The common tools available for TQM are Control Charts, Pareto Charts, Fishbone Diagrams, Run Charts, Histograms, Scatter Diagrams, Flow Charts, Check Sheets, Stratification, and Design of Experiments.

Similarly, widely used TQM techniques are Benchmarking, Business Process Reengineering, Statistical Process Control, etc.

Available research evidence indicates that over 95 percent of manufacturing companies and 70 percent of service companies in the USA have used TQM in some form. Also, 55% of US executives and 70% of Japanese executives used quality improvement information for assessment oh business performance.

It is often claimed that, because of the adoption of TQM practices, the Japanese companies have achieved global prominence in producing world-class products.

Both reengineering and TQM are important toots for implementing strategy effectively.

When all employees from top to bottom adopt them as a way of everyday life, strategy implementation becomes easier. Both aim at improved efficiency, reduced cost, better product quality, and greater customer satisfaction.