Quality One of the Most

Quality

One of the most important things to come out of the Industrial Revolution is the concept of quality management. With the ability to mass-produced standardized goods came managers who realized that improving the overall quality standards was a means to improve the company's profits. Frederick Taylor is considered to be the father of scientific management because he wrote about the separation of planning from producing, beginning the idea of task specialization. Henry Ford further put forward the idea of task specialization in his automobile plants. Task specialization is critical to quality management because the person performing each task can achieve a higher level of excellence through constant repetition. Walter Shewhart introduced statistical quality control, which was the next innovation in quality management -- measuring outputs mathematically so that an accurate understanding of output quality could be known. This in turn would lead to direct steps to improve output quality. After World War II, Japan became known for its quality management techniques, such as total quality management (TQM). The Japanese excelled at the three major disciplines of quality management -- cost, productivity and quality. In recent years, a number of different quality management techniques have emerged, often based on statistical analysis and focused on the organizational structures that deliver the best quality outputs for the organization.

2. The word quality in the sense of quality management typically refers to the production of goods that are not only consistent but are also free of defects. Thus, a good is considered to be of high quality if it is produced as intended. The idea of quality is related to other strategic objectives -- improving efficiency and lowering costs in particular. By managing quality, the company can make its products superior to those of the competition or can make them at a lower cost than the competition. The idea behind quality assurance is that the company has full control over the quality of its products. Quality does not refer to the utility of the end user -- it is strictly related to the company's ability to produce the goods that it intends to produce, to the standard at which it intends to produce them.

3. Quality is important in organizations because it is a form of competitive advantage. The earliest proponents of quality management understood that quality goods were something that could not only be sold to consumers, but often could be sold at a premium. Having a reputation for quality allowed companies to expand beyond their immediate areas. This theory still holds true today. In the latter part of the 20th century, Japanese firms were able to enter U.S. markets rapidly, once a few leaders such as Toyota had established a reputation for high quality goods. American companies today expand overseas, capitalizing on their generally high level of quality.

Having a high level of quality also means cost savings, and those can be passed along to the consumer as well for competitive advantage. A defect is essentially a waste of money -- it is raw materials and labor converted to something that cannot be sold. Higher levels of quality mean fewer defects. This lowers the total cost of producing (to meet demand). This has two competitive benefits. The first is that fewer customers receive defective products. This means fewer returns and a better reputation for quality. The second is that a lower cost of production can be used to either lower the price to the consumer for competitive advantage or can be directly applied to profits. In either case, the company benefits both financially and in terms of its reputation from having a higher level of quality.

4. The total quality movement (TQM) is a trend in management to improving quality through better organizational design. In the earlier decades of quality management, it was not uncommon for quality management techniques to only be applied to production. The total quality movement goes beyond that, and applies quality management techniques to all aspects of the organization's business. This includes both line and staff functions. The objective is to allow the organization to manage its business more effectively, but providing quantitative data on all aspects of the organization. The underlying theory is simple: a company can still fail even if it produces high quality goods. It could, for example, have a bloated management structure. What TQM does is it allows the company to manage everything so that senior management knows the value that all parts of the company contribute to the bottom line.

With this high level of control, the total quality movement focuses on enhancing quality through the synthesis of structure and strategy (Lowder, 2007). For example, a firm that derives competitive advantage through its reputation for high quality will design its organization and its systems so that every aspect of the organization supports that strategy. The same is true of a firm with a cost leadership strategy. At Wal-Mart, for example, every aspect of that company is designed to lower the cost per unit sold. Companies that rely on innovation likewise have designed their organization and quality systems so that innovation is fostered at every turn.

The movement takes the ideas behind total quality management, and scientific management in general, and applies them holistically, so that the entire organization is moving in the same direction, towards the same output objectives. The total quality movement is something that has been around for a few decades and has gained momentum in this time. Related concepts such as Six Sigma management have been introduced and popularized as means of implementing TQM across all areas of an organization, following the example set by industry leaders such as Motorola.

5. The philosophy behind TQM is essentially the same one that William Shewhart introduced -- that all aspects of the organization can be quantified and measured. Anything that can be measured can then be subject to scientific study in a relatively controlled environment. That is to say that changes can be made and then the impacts of those changes can be measured. By this means, the company can determine the best practices. It is not necessary that this take place by trial and error, either. In TQM, knowing what works in one area can help to devise strategies to make in other areas. This is because when all aspects of the company are quantified, the relationships between all actions the company undertakes can be studied.

By knowing how all areas of the company are interrelated with respect to outputs, and by understanding the key relationships within the company, management can therefore design the organization in a way that supports the organization's strategic objectives. The underlying principle behind TQM therefore is that by studying all elements of the company with respect to how those different elements impact on the company's desired objectives, adjustments can be made that will support enable the company to improve its performance. It is believed that performance can always be improved, even if this means inventing new concepts or technologies to facilitate that improvement.