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Chapter 1 – Total quality management an overview
Definition.
Total quality management (TQM) is an enhancement to the traditional way of doing business. It is a
proven technique to guaranty survival in world-class competition. Only by changing the actions of
management will the culture and actions of an entire organization be transformed. TQM is for the
most part common sense. Analyzing the three words, we have:
Total- made up of the whole;
Quality- degree of excellence a product or service provides;
Management- the act of running and controlling a business to achieve organizational objective.
Therefore, TQM is the art of managing the whole to achieve excellence. (Dale H. Besterfield)
In other words, TQM is a system of management that considers that every employee in the
organization is responsible for keeping high standards of work in every aspect of the company’s
work in order to meet the need of customer.
The evolution of quality management.
Systems for improving and managing quality have evolved rapidly in recent years.
During the last two decades or so simple inspection activities have been replaced or supplemented
by quality control, quality assurance has been developed , and now many company using a process
of continuous and company-wide improvement, are working TQM. In this progression, four fairly
discrete stages can be identified: inspection, quality control, quality assurance and TQM:
1. Inspection. an official visit to a company in order to check that rules are being obeyed and
that standards are acceptable. In some cases inspection is used to grade the finished product. This
system is an after-the-event screening process with no prevention content other than, perhaps,
identifications of suppliers, operations, or workers who are producing non-conforming
quality/services.
2. Quality control. a system of keeping high standards in manufactured products by planning
carefully, checking and making necessary improvement. Part of quality management focused on
quality requirement (all the action is after the event).
3. Quality assurance. The practice of managing every stage of the process of producing goods
or providing services to make sure they are kept at the standard that the customer expects. Part of
quality management focused on providing confidence that quality requirement will be fulfilled .
4. The fourth and high level- TQM- involves the application of quality management principles
to all aspects of the organization, including customers and suppliers, and their integration with the
key business process. Total quality management is the mutual cooperation of every-one in an
organization and associated business processes to produce value-for-money product and services
which meet and hopefully exceed the needs and expectations of customers.
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Basic Approach
TQM requires six basic concepts:
1. Managerial Leadership;
2. Customer focus and satisfaction ( both internally and externally);
3. Employee involvement and empowerment;
4. Continuous improvement;
5. Partnership with suppliers;
6. Establish performance measures for the process.
These concepts outline an excellent way to run an organization. A brief paragraph on each of them
is given here. The next chapters cover these concepts in greater detail.
1. Management must participate in the quality program. A Quality council must be established
to develop a clear vision, set long terms goals, and direct the program. Quality goals are included
in the business plan. An annual quality improvement program is established and involves input
from the entire work force. Managers participate on quality improvement teams and also act as
coaches to other teams. TQM must be communicated to all people.
2. The key to an effective TQM program is its focus on the customer. An excellent place to
start is by satisfying internal customers. We must listen to the “Voice of customer” and emphasize
design quality and defect prevention. Do it right the first time and every time, for customer
satisfaction is the most important consideration.
3. TQM is an organization-wide challenge that is everyone`s responsibility. All personnel must
be trained in TQM, statistical process control (SPC), and other appropriate quality improvement
skills so they can effectively participate on project teams. People must come to work not only to
do their jobs, but also to think how to improve their jobs. People must be empowered at the lowest
possible level to perform process in an optimum manner.
4. There must be a continual striving to improve all business and production processes. Quality
improvement projects, such as on-time delivery, customer satisfaction, cycle time, and supplier
management, are good places to begin. Technical techniques such as SPC, benchmarking, quality
function deployment, ISO 9000, and designed experiments are excellent for problem solving.
5. Customers and suppliers have the same goal – to satisfy the end user. The better the
supplier`s quality, the better the supplier`s long term position, because the customer will have
better quality. Because both the customer and the supplier have limited resources, they must work
together as partners to maximize their return on investment. The focus should be on quality and
life –cycle costs rather than price. Suppliers should be few in number so that true partnering can
occur.
6. Performance measures such as uptime, percent nonconforming, absenteeism, and customer
satisfaction should be determined for each functional area. These measures should be posted for
everyone to see. Quantitative date are necessary to measure the continuous quality improvement
activity.
The purpose of TQM is to provide a quality product and/ or service to customers, which will in turn,
increase productivity and lower cost. With a higher quality product and lower price, competitive
position in the market place will be enhanced. This series of events will allow the organization to
achieve the objectives of profit and growth with greater ease. In addition, the work force will have
job security, which will create a satisfying place to work.
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As previously stated, TQM requires a culture change. Table 1-1 compares the previous state with the
TQM state for typical quality elements. This change is substantial and will not be accomplished in
a short period of time. Small organization will be able to make the transformation much faster than
large organizations.
Table 1-1 new and old cultures.
Quality element Previous state TQM
Definition Product-oriented Customer-oriented
Decisions Short-term Long-term
Emphasis Detection Prevention
Errors Operations System
Responsibility Quality control Everyone
Problem solving Mangers Teams
Procurement price Life-cycle costs, partnership
Manager`s role Plan, assign, control, and enforce Delegate, coach, facilitate and mentor
TQM framework
Figure 1-2 shows the framework for the TQM system. It begins with the knowledge provided by
gurus of quality: Shewhart, Deming, Juran, Figenbaum, Ishikawa, Grosby, Taguchi etc. As the
figure shows, they contributed to the development of principles and practices and/or the tools and
techniques. Chapters 3 through 6 provide information on principles and practices, and their titles
are given at the bottom of the figure. Chapters 7 through 13 provide information on quality
management systems, tools and techniques and their titles are given in the upper right of the
figure. Some of these tools and technique are used in the product/and or service realization
activity. Feedback from internal/external customers or interested parties provide information to
continually improve the organization`s system, product and/or services.
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Quality management systems,
Shewhart, Deming, Juran,
Deming prize, The
Figenbaum,
Malcolm Baldridge
Ishikawa,National
Grosby, Taguchi
award, Benchmarking, information technology, Quality function deployment, Q
Tools and Techniques (chapters 7-13)
Gurus (Chapter 2)
Principles and practices (chapters 3-6) Product or service realization Customer
People and relation ships: Approach:
Leadership Continuous process improvement
Customer satisfaction Employee involvement SupplierMeasure:
partnership
Performance measures
Figure 1-2. TQM Framework
Gain in productivity with improved quality
Improvement in quality can lead directly to increased productivity and other benefits. Table 1-2
illustrates this concept.
Item Before improvement 10% After improvement 5 %
nonconforming nonconforming
Relative total cost for 20 units 1.00 1.00
Conforming units 18 19
Relative cost for (2x1)/20= 0.01 (1x1)/20= 0.05
nonconforming units
Productivity increase (100)(1/18)=5,6%
Profit increase (100)(1/18)=5,6%
As seen in the table, the improved quality results in a 5,6 % improvement in productivity and profit.
Many quality improvement projects are achieved with the same work force, same overhead, and
no investment in new equipment
TQM does not occur overnight; there are no quick remedies. It takes a long time to build the
appropriate emphasis and techniques into the culture. Overemphasis on short term results and
profit must be set aside so long-term planning and constancy of purpose will prevail.
Defining Quality
In today`s global competitive marketplace the demands of customers are for ever increasing as they
require improved quality of product or services. The companies that do not manage this change
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will fail.
Quality is what the customer says it is. Many people say they know what is meant by quality, they
typically claim “I know it when I see it” (by feel, taste, instinct or smell).
When the expression “quality” is used, we usually think in terms of excellent product or service that
fulfils or exceeds our expectations. The expectations are based on the intended use and the selling
price. When a product surpasses our expectations we consider that Quality. Thus, it is somewhat
of an intangible based on perception. Quality can be qualified as follow.
Q=P/E
Where,
Q=quality
P=performance
E=expectations
If Q is greater than 1,0 then the customer has a good feeling about the product or service. Of course,
the determination of P and E will most likely be based on perception with the organization
determining performance and the customer determining expectations.
A more definitive definition of quality is given in ISO 9000:2000. It is defined as the degree to
which a set of inherent characteristics fulfills requirements.
Also, quality defines as:
Understanding and then satisfying customer requirement in order to improve our business results.
Quality has nine different dimensions. Table 1-3 shows these nine dimensions of quality with
their meaning and explanations in terms …
Dimension Meaning
Performance Primary product characteristics (such as the brightness of the picture)
Features Secondary characteristics, added features
Conformance Meeting specifications or industry standards
Reliability Consistency of performance over time
Durability Useful life (includes repair)
Service Resolution of problems and complaints (ease of repair)
Response Human-to-human interface
Aesthetics Sensory characteristics
Reputation Past performance and other intangibles
These dimensions are somewhat independent, therefore a product can be excellent in one dimension
and average or poor in other. Very few, if any, products excel in all nine dimensions. Therefore
quality products can be determined by using a few of the dimensions of quality. Marketing has the
responsibility of identifying the relative importance of each dimension of quality. These
dimensions are then translated into the requirements for the development of a new product or the
improvement of an existing one.
Historical review
The history of quality control is undoubtedly as industry itself.
In 1924, W. A. Shewhart of bell telephone laboratories developed a statistical chart for the control of
product variables. This chart is considering to be the beginning of statistical quality control. Later
in the same decade, H.F. Dodge and H.G. Romig, both of bell telephone laboratories, developed
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the area of acceptance sampling as a substitute for 100% inspection. Recognition of the value of
statistical quality control became apparent by 1942. Unfortunately, U.S. Managers failed to
recognize its value.
In 1946, the American society for quality control (ASQ) was formed. This organization, through its
publications, conferences, and training sessions, has promoted the use of quality for all types of
production and service.
In 1950, W. Edwards Deming, who learned statistical quality control from Shewhart, gave a series
of lectures on statistical methods to Japanese engineers and on quality responsibility to the CEOs
(Chief Executive Officer) of the largest organizations in Japan. Joseph M. Juran made his first trip
to Japan in 1954 and further emphasized management`s responsibility to achieve quality. Using
these concepts the Japanese set the quality standards for the rest of the world to follow.
In 1960, the first quality control circles were formed for the purpose of quality improvement. Simple
statistical techniques were learned and applied by Japanese workers.
By the late 1970s and early 1980, U.S. managers were making frequent trips to Japanese miracle.
These trips were really not necessary – they could have the writings of Deming and Juran.
Nevertheless, a quality renaissance began to occur in U.S. products and services, and by the
middle of 1980 the concepts of TQM were being publicized.
In the late 1980s the automotive industry began to emphasize statistical process control (SPC).
Supplier and their suppliers were required to use these techniques. Other industries and the
department of defense also implemented SPC. The Malcolm Baldrige National Quality award was
established and became the means to measure TQM. Genechi Taguchi introduced his concepts of
parameter and tolerance design and brought about a resurgence of design of experiments (DOE) as
a valuable quality improvement tool.
Emphasis on Quality continued in the auto industry in the 1990s when the Saturn automobile ranked
first in customer satisfaction (1996). In addition, ISO 9000 became the worldwide model for a
quality management system. ISO 14000 was approved as the worldwide model for environmental
management systems.
The new millennium brought about increased emphasis on worldwide quality and the internet.
Benefits of TQM
According to a survey of manufacturing firms in Georgia, the benefit of TQM are improved quality,
employee participation, teamwork, working relationships, customer satisfaction, employee
satisfaction, productivity, communication, profitability, and market share.
TQM is a good investment as shown by a ten-year study by Hendricks and Singhai. They showed
that there is a strong link between TQM and financial performance. The researchers selected a
group of 600 publicity traded organizations that had won awards from effectively implementing
TQM. They then selected a control group similar in size and industry to the award winners:
Table 1-4
Description control Award
Growth in operating income 43% 91%
Increase in sales 32% 69%
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Increase in total Assets 37% 79%
Recent studies have shown that only about 30% of manufacturing organizations have successfully
implemented TQM.
Cause and effect diagram (Ishikawa 1943)
A cause and effect (C&E) diagram that is used to analyze the different causes of a particular effect
or problem (as shown in figure 1-3).
Obstacles
Implementation of TQM is described in the next chapters. This section gives information concerning
the obstacles associated with implementation.
Many organizations, especially small ones with a niche, are comfortable with their current state.
They are satisfied with the amount of work being performed, the profit realized and the perception
that the customers are satisfied. Organization with this culture will see little need for TQM until
they begin to loss market share.
Once an organization embarks on TQM, there will be obstacles to its successful implementation.
The first eight most common were determined by Robert J. Masters after an extensive literature:
1. Lack of management commitment. Management must consistently apply the principles of
TQM;
2. Inability to change organizational culture. Changing an organization`s culture is difficult an
will require as much as five years.
3. Improper planning. customer satisfaction should be the goal rather than financial or sales
goals;
4. Lack of continuous training and education. Training and education is an ongoing process for
everyone in the organization.
5. Incompatible organizational structure and isolated individuals and departments. Differences
between departments and individuals can create implementation problems. The use of
multifunctional team will help to break down long-standing barriers;
6. Infective measurement techniques and lack of access to date and results. Key characteristics
of the organization should be measured so that effective decision can be made. Access to data and
quick retrieval is necessary for effective process.
7. Paying inadequate attention to internal and external customers, Organizations need to
understand the changing needs and expectations of their customers. Effective feedback
mechanisms that provide data for decision making are necessary for this understanding.
8. Inadequate use of empowerment and teamwork. Individuals should be empowered to make
decisions that affect the efficiency of their process or the satisfaction of their customers.
9. Failure to continually improve. It is tempting to sit back and rest on your laurels.
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