Total Quality Management TQM

Total quality management (TQM)

Total Quality Management is a particular management style where the aim is to produce total quality products for a customer or a client, where the customer has the right to define 'quality'. When the customer declares that the particular product or service is not up to the mark or of inferior quality or anything else, then the product or the service is considered to be not of the optimum quality, and needs to be improved further. Total quality management allows for continuous improvement based on the customers' opinion, and this is what is special about the entire concept, since the views and the opinions of the customer are taken extremely seriously, and various steps are taken to see that the product is changed or improved according to the necessity, and also that the product will be changed continuously over a period of time. (Total quality management: www.questia.com)

How is the concept of Total Quality Management relevant today? In today's world, almost all the products and services that are offered for sale in the market are distinguished by newer and newer changes and innovations. New information is generated almost on an hourly basis, and in order to cope with this type of influx, the market behavior has had to change. Customers have been given the right to test and pass judgments on what is better and what is bad, and customer needs have also been showing rapid changes all the time. This type of change is a phenomenon that is representative of today's world, where change is something that would take place in a few months and not over a few years as it used to happen in the years past. (Total Quality management: Business Owners toolkit)

One case in example is that of computer printers. This product is generally prone to becoming obsolete in a matter of months, and the computer field personnel have to be very careful when they are introducing such new products into the market. They would have to make a provision for amending and changing the product as time progresses, as the computer printer will supposedly last for just six months, after which time a newer and later version will take over. Since it is a fact that any business would only have a limited amount of resources, it is very vulnerable and susceptible to all these changes. When customer satisfaction is given top priority, however, according to the principles of Total Quality Management, then it would be a boon for the business. This is how TQM is relevant in today's world where change is a matter of everyday life. (Total Quality management: Business Owners toolkit)

Definition of Quality:

It is important, when attempting to define Quality in total quality management, to be able to distinguish between improvement in quality, and quality assurance. Quality assurance is the system of activities that have been created with the idea of ensuring that the production of the product meets certain standards required of it. This offers the customer the guarantee that the product is in conformance to the various specifications required of it. Quality improvement is an entirely different issue. This means that a lot of efforts would be put in towards the improvement and the betterment of the product that the customer wants and expects of the product. It is during the product quality improvement that a lot of efforts are put in, and continuously, since the entire process involves the striving towards a better understanding of the product and of the market where the product will be placed, and new and innovative processes would be implemented, and the management and the distribution of the materials and the products would be improved, and the ultimate service to the customer would be vastly improved. (Total Quality management, an overview)

Therefore, quality in this case can be explained as a continuous process of the improvement of the product based on an innate understanding of the market and the needs and wants of the customer, and the end product of which would offer immense satisfaction to both the customer as well as to the marketer. The inherent success of total quality management of a product would definitely depend on the involvement and the understanding of all the embers of the organization wherein all the external and the internal needs of the customer would be satisfied to a great extent. The process of negotiations and consultations with the ultimate customer would have to be continuously maintained, and the product would be measured against the basis of the customer's needs and expectations. (Total Quality management, an overview)

The characteristics of the output of the customer of the product that is being put up for sale that are important as far as the customer is concerned also describe the quality in the equation of total quality management. The knowledge and the understanding of the quality of the product depend to a very great extent on the understanding of the customer's needs. (Total Quality management Glossary) Quality is also referred to as the 'conformance' to the various requirements of the customer, while specification is defined as the specification of quality that must be followed by the company in its implementation of the customers needs and wants in the product. (Total Quality Management- TQM Tutorial)

The Cost of Quality:

The concept of 'quality' has become one of keen interest in businesses all over the world, especially of late. However, there has always been the ever-present problem of how to set about measuring the elusive concept of 'quality', and the 'cost of quality'. Though there are a number of definitions on the cost of quality, and how to measure it, when the concept of 'Activity-based Costing' is used, it becomes easier to define it. It is now clear that quality is in fact nothing but the 'conformance to requirements' of the customer that he puts forth about a particular product in the market. The problem faced by many marketers is that this will be made clear to them only after the product has been launched already, that is, after the fact, when the damage as seen by the customer has already been done and is over with. Another disadvantage is that it is a time as well as cost consuming process to discover the mistakes in the product, and set about the tedious exercise of correcting the mistakes that have been discovered, or in some cases, even discarding the product to start all over again. Even then there will be no guarantee that the product would be better the second time, and that all the mistakes discovered would be rectified this time. (The Cost of Quality: Consumer Focused Quality)

So, what is the solution to this problem? The best solution would be to 'prevent' the problem from occurring. When prevention is carried out, then conformity to the requirements would be much easier and more viable, and conformity can be achieved each and every time the job is done. This is what is sometimes defined as the 'zero defects' syndrome of a product. The only good and valid method of measuring quality, is therefore, referred to as the 'price of non-conformance' wherein the cost that is expended on discovering, correcting and rectifying the errors, and getting rid of unwanted material is counted as the 'cost' of the quality of the product. The difficulty here, however, is that there are more than a thousand activities that make up the total work of the entire organization. This is where the new concept of 'activity-based costing; will come in handy.

This is a concept that allocates costs to the specific activities within an organization, and not to the specific departments or to the functions of the departments. These costs include the labor costs, costs of materials, and the various overhead costs that are incurred when running a business establishment. Therefore all the activities are divided into three main categories: the appraisal of the costs of creating a product, like for example, the designing of the machine, the financial reports pertaining to the design, the costs towards selling the product, etc., the second category being that of preventive activities, namely, ensuring that all the steps that are undertaken would bring about the desired results without the possibility of a break down. All corrective activities would take place after the initial two steps have been carried out successfully. (The Cost of Quality: Consumer Focused Quality)

The Evolution of Total Quality Management:

Long before the ideas and the concepts of the Total quality management were created and formalized, a lot of effort and work had been undertaken over the years and through the centuries. In the years gone by, whenever a product was manufactured, that product would be tested and evaluated, and a decision would be taken as to whether the product would be launched into the market or rejected at that stage. When businesses and manufacturing units started to grow in size, the role of inspection became more and more difficult, and eventually, a person had to be appointed s an Inspector to inspect the product at all the various stages of its production. When the role of Inspector had been created, there arose several different problems, including technical ones, wherein another specialist had to be appointed who would check on this aspect of the product. Though the title of the post was that of 'technical inspector', the particular individual lacked training and experience, and would often bypass a problem just because he was not aware that it was in fact a real problem. Moreover, the inspector was bribed or forced to pass a particular product, and this resulted in the 'Okaying' of a defective product, so that output could be increased. (Evolution of Quality)

In addition, the skilled workers whose job it was to manufacture good quality products were shifted on to accepting other jobs within the organization, and other less skilled workers were put into these places. This resulted in the decrease in the quality of the product. At this time, the post of 'chief Inspector' was created, and this person would have to report to the works manager or to the person in charge of the manufacturing unit. This post created additional responsibilities and issues such as the maintenance of records and data, and the creation of certain standards of measuring equipment. However, the most important need at this time was that of defect prevention. This is how the quality control department of a manufacturing organization came to evolve, with the person referred to as the 'quality control manager' in charge of all the operations within this unit, and who would inspect the product at all stages. (Evolution of Quality)

It was during the 1920's that the theory of quality control began to be applied in all the various manufacturing units of the time, and when Shewhart created the first model of the 'control chart' it became very popular. Deming later adapted this to his own theories on the subject, and soon Dodge as well s Roming created and developed the theory that is known as 'Statistical Process Control'. When during the 1940's several Japanese industries were completely destroyed due to various reasons, and cheap imitations and a weak workforce compounded the various problems that they were facing at the time, the Japanese in one smart move adapted the theories of the quality Gurus like Juran, Deming, and Feigenbaum, and managed to revive their failing industries. The total quality management ideas became so popular that they soon became known all over the world and others also began to adopt these methods in their workings and by the 1970's, Japanese exports into America and Europe increased considerably.

The quality revolution, as it was referred to, was later in its arrival in the West, not until the 1980's in fact, and almost all the companies started to introduce the concepts of total quality management and also of quality assurance in their organizations, with the main intention of beating the Japanese at their own game. This was how Total Quality Management came to be adopted in many organizations all over the world. In the UK, the National Quality Campaign was launched in the year 1983, with its main theme being that of BS 5750, and the aim being to bring into importance the idea of quality in the world. It was after this event that the International Standardization Organization, also known as the ISO 9000 was launched, and it became a requirement of any product to conform to the standard dictated within this system of standardization. (Evolution of Quality)

The quality Gurus Deming, Juran, and Crosby have all written a number of training manuals on the methods of the implementation of the total quality management programs by various organizations or the betterment and the improvement of the quality of the products according to the wishes of the customer. Better quality was seen as being the stepping-stone for success, and it was insisted that the company follow the steps and procedures detailed within the training manuals written by the quality gurus, Deming, Juran, and Crosby. (Who's your Guru?)

Oakland's Model:

Oakland is a consultant on the concept of Total Quality Management, and offers quite a few valuable suggestions on how the tenets of Total quality management can be implemented into the businesses of today where competition is fierce and merciless, and technological advances are taking the businesses into a technological future that cannot be comprehended by the ordinary man. Therefore, when one is equipped with the basic understanding of the ideas of TQM, then it would be easier to implement them into today's fast passed businesses where change is constant and continuous. Competition has now become two faced: domestic, and international. The working environment in itself has become hostile and tumultuous, and the customer is now better informed than he ever was at any other point of time in history. The improvements within the organizations, however, that has resulted, as a consequence of all these events, is a change for the better. The ISO 9000 is a part of these positive changes that are taking place, and TQM is another. (Quality world)

Though it is a fact that any organization competes with itself for improvement, it is being widely recognized that quality is the key to success today and also for the future. Therefore, Total quality is a must for continued success, and the principles of TQM state that this must start with an understanding of the needs of the customer, and also an understanding of the ends when the needs have been satisfied. The entire marketing process must be able to establish the real necessities of the product, and these are what will make up the 'specifications' of the product. However, there must be a good communication method between the customer and the supplier, and this is the real key to the total quality performance. The chain of internal suppliers and customers form the 'quality chain' and this must be kept in mind at all times. The tools are important, as are the processes that form the entire mission. The transformation of a set of inputs into the desired outputs form another important aspect of TQM, according to Oakland's model, and certain core business practices must be performed well if the desired output is to be achieved.

The four 'P's of TQM are those of planning, performances, processes, and people. These are the most important aspects of a TQM model, and these will help in delivering the desired product to the customer. While planning is the development of various strategies, performance is the establishment of a framework for the evaluation of performance, and processes involves the management and the designing of the various processes involved in the TQM strategy, and people involves all the persons involved in the team of communications and culture change and commitment, and also innovation and learning processes. When the commitment to satisfying a customer's needs is communicated well, and the message is received by the team involved, and the result is the recognition that the culture of he organization must be changed, and the team is headed by an effective leader who is totally committed to the cause, then the result would be the achievement of Total Quality Management in a very effective manner within the organization, and this in turn would only lead to more profits for the company, and more customer satisfaction. (Quality world)

Continuous Improvement:

The basic principles of TQM include that of 'Continuous Improvement' that is, continually trying to improve the various business processes that make up the workings of an organization. The nuisance and the irritating factor in continuous improvement is that whatever steps one takes, and however he tries to improve, he can never be sure that he has, in fact, been able to achieve continuous improvement. Whatever the method that was utilized there can never is a complete satisfaction that it has been done well. As the competition becomes stronger and stiffer, the management has the duty of trying to keep up with the changing times. There are a few companies that have been trying to make the employee of the organization work harder, and not be smarter. (Basic Principles of Total Quality management)

This means that the result may turn out to be counter productive, because of the very fact that when there is an inherent mistake in the fabric of the process, then here is the point in trying to improve a defective plan? On the other hand, when the basic structure is examined, and the underlying causes for the delays or the failures are discovered, then it will be easier to improve. Sometimes, bottlenecks are discovered to be the real source of the problem, and when these are removed, and then the entire problem is solved. Since it is true that the workers of an organization are a source of continuous improvement, when they are asked for their opinions on how to improve the existing conditions within the organization, it would be very effective. They would be able to provide suggestions on how to eliminate unnecessary work, or to conserve energy, etc. (Basic Principles of Total Quality management)

Benchmarking is another process by which continuous improvement ill be achieved within an organization. This is the systematic and the ongoing process by which the very best of practices and methods can be researched and implemented into the workings of the organization. This will be a continuous improvement process. Benchmarking is actually a tool that is utilized by the company to establish certain measures of performance, wherein a level or measurement is created, by which comparisons can be made by this organization with another. The system of making comparisons will be used within the system of benchmarking. The search that will be conducted for the purpose of establishing a benchmark will generally be focused on the products and the services of the competitor, or by those businesses that have been established as leaders in the industry for many years. The constant cycle of plan, does, check, and act is another aspect of continuous improvement. This system is used in various strategic plans all over the world. It involves the identification of the areas in which there can be improvements, and then providing the specific plans with which to implement the improvements. (Good Human Resource Practice)

Implementing TQM into a business:

The idea of implementing total Quality management into a business f today is seen as a surefire method towards achieving success in the filed, as well as continuously improving the conditions within so that the business would be able to maintain its success. Using the principles of TQM will definitely lead the business towards success, and the question is, how does one go about implementing it into the existing business or in a new business? TQM is basically the process of inculcating improvements, reducing dramatically the cycle time, trying and succeeding in improving the satisfaction of the customer, going about the process of further educating the workforce, and finally, being able to achieve operational competitiveness. TQM will not only help in reducing costs, but will also improve the business. (Competitiveness of the future, Building on to the TQM Foundation)

The only disadvantage is that almost all the cost reductions that are achieved because of the implementation of the TQM strategies will be seen within the first few years of its implementation, and the percentage of cost reductions that have been a result of the TQM will steadily decrease after the initial years, maybe because of the fact that there will be very little to change after those years. When a business wants to remain competitive, then it will not rely completely on the principles of TQM; it must be willing to use other methods of improvement as well as of cost reduction in conjunction with the TQM methods, and this will bring about greater benefits for the company. This in other words means that though TQM will be a major part of the organization, it will not be the only method being used. Though TQM addresses the operational processes within the organization, it does not touch the financial system as well as the business development system, and these must also be tackled in order to achieve the desired success. (Competitiveness of the future, Building on to the TQM Foundation)

Therefore, a system that integrates the operational improvement of a business, and the financial improvement, as well as the business development must be utilized if the maximum benefit and success is to be achieved by the company. The two systems of 'activity-based costing' and the 'core competency development plan' must be attached to the TQM in order to achieve continuous improvement and cost reduction. When the 'activity-based costing' is to be implemented into the system, the primary focus is on the financial system of the company, and this is the method in which this can be carried out: the fact has to be ascertained whether the already existing financial accounting system demonstrates clearly the use of the resources by the customer and by the product. Then the various reasons for bringing about a change in the system must be ascertained, and the next step would be to select a team and try to implement the new ideas into the workings of the team. Once this has been done, the results can be gauged, and flowcharts can be prepared for each and every process. (Competitiveness of the future, Building on to the TQM Foundation)

After this, the products that the customer values the most must be determined, and then the current products and services can be aligned to the specific needs as stated by the customer. All the expenses incurred by the organization must be kept track of, and when the assessment team determines the validity and the value of the newly implemented activity-based costing experiment, then the decision as to whether or not it must be implemented can be taken. When a new business development system or the 'core competency development plan' is to be implemented in order to increase the long-term revenue for the business, then the procedure must be carried out in a series of steps.