Management Science

Unit -5

Vision and mission statement

A mission statement defines the organization's business, its objectives, and how it will reach
these objectives. A vision statement details where the organization aspires to go. Why does your
company exist? What do you hope to accomplish in the next several years?

A company's vision and mission statements help define its character and guide its operations and
goals. A vision statement describes the company's long-term goals and aspirations, while a
mission statement describes what the company does in the present and how it will achieve its
objectives.

Vision statement Mission statement

Focus Long-term goals and aspirations Current operations and objectives

Purpose Describes the company's desired future Defines the company's business and how it
state will achieve its objectives

Example A mental picture of what the company A general statement of how the vision will
wants to accomplish, such as a be achieved, such as providing unique dairy
successful winery business products to local consumers

An organization's vision, mission, and objectives are part of a larger framework that helps guide
its strategy and communicate its purpose to stakeholders:
 Vision: The organization's aspirational future state, which can inspire employees and
stakeholders.
 Mission: The organization's reason for being and how it will achieve its vision, which can help
stakeholders understand why they should support the organization.
 Goals: Statements that describe what needs to be accomplished to achieve the vision.
 Objectives: Time-sensitive statements that specify how to achieve the goals.
 Strategies: Long-term plans for achieving the goals and objectives.
 Tactics: Short-term action plans for achieving the strategies.
An organization's vision and mission statements are typically brief and written. They can be used
internally to help guide management and employees, and externally to communicate with
customers and partners.

Management Information System

Management Information Systems (MIS) is the study of people, technology, organizations, and
the relationships among them. MIS professionals help firms realize maximum benefit from
investment in personnel, equipment, and business processes. MIS is a people-oriented field with
an emphasis on service through technology.

Management Information Systems (MIS) is a discipline that combines business and computing to
help organizations make better decisions. MIS professionals use data to create systems that
provide managers with the information they need to run their organizations.

Here's what MIS professionals do:

 Collect data: MIS professionals use technology to gather data from various sources.
 Analyze data: MIS professionals use reports to analyze business trends and future opportunities.
 Create systems: MIS professionals create information systems that meet the needs of managers,
staff, and customers.
 Manage systems: MIS professionals manage information systems to ensure they meet the needs
of the organization.
 Provide support: MIS professionals provide support to project teams.
MIS professionals are in high demand across many industries and business units.

Objectives of Management Information System (MIS)

Followings are the main objectives of a management information system,

1. Data Storage - it is important to store information or processed data for future use.
2. Data Retrieval - the data should be smoothly retrieved from storage devices whenever
needed by different users.
3. Data Propagation - data should be distributed periodically through the organizational
network to its users.
4. A system of efficient and effective planning - MIS controls functions of management to
provide quick and timely information to the management. The process is very effective to
make decisions.
 5. An MIS's goals are to incorporate the company's organizational structure and processes in
order to better control the enterprise and maximize the information system's potential for
competitive advantage.
6. Graphical reports - give an idea about the performance of different resources employed
in the organization.
7. Controlling the organization - MIS helps control the organization to provide the latest
information as well as historical data whenever required.
8. Standard and budgeted performance - Through matching actual performance with
standard and budgeted performance, MIS brings variances to management attention that
can be resolved by taking remedial action.
9. MIS provides the notification of the organization's management power to take advantage
of available opportunities.
10. MIS reports on re-production statistics which helps management people to take fruitful
decisions.

The manager's decision-making plays the main role. It lets management people make decisions
based on the information that is being processed. Only input data change, it is an acceptable
repeat to support various forms of decision-making by managers. Automation capabilities of
MIS can improve your company's performance.

Material requirements planning (MRP)

Material requirements planning (MRP) is a system for calculating the materials and components
needed to manufacture a product. It consists of three primary steps: taking inventory of the
materials and components on hand, identifying which additional ones are needed and then
scheduling their production or purchase.

Material requirements planning (MRP) is a system that helps businesses manage manufacturing
processes by planning production, scheduling, and controlling inventory. MRP systems are used
to ensure that manufacturing facilities have enough stock to meet production needs.

MRP systems help businesses:

 Balance supply and demand
MRP systems help businesses understand their inventory needs and balance supply and
demand.
 Improve productivity
MRP systems help businesses meet demands and improve overall productivity.
 Reduce costs
 MRP systems can help businesses reduce inventory costs and improve manufacturing
efficiency.
 Improve customer satisfaction
MRP systems can help businesses reduce customer lead times and improve customer
satisfaction.
 Respond to changes
MRP systems help businesses quickly adjust to changes in demand or market conditions.
MRP systems work by asking three main questions: What is needed, How much is needed, and
When is it needed by.

MRP systems can be software-based or conducted by hand. However, there are some
disadvantages to using MRP systems, including: Reliance on accurate input information,
Scheduling delays, Inefficient tracking, Expensive capital investment, and Requirement for
proper training.

The stages of Material Requirements Planning (MRP) include:

 Demand estimation
Forecast future sales and determine how much of each product is needed to meet demand
 Master production schedule
A statement of the volume and timing of the end products to be made
 Net requirements
Determine the net requirements by subtracting the available inventory from the gross
requirements
 Production scheduling
Generate accurate production schedules that consider lead times, material availability, and
production capacity
 Purchase planning
Provide a detailed list of materials and quantities needed to maintain optimal inventory levels
 Capacity planning
Ensure that manufacturers have the capacity to meet customer demand and optimize the
production process

MRP helps businesses optimize inventory levels, reduce waste, and improve efficiency.
 Customer Relationship Management (CRM)
CRM (customer relationship management) is the combination of practices, strategies and
technologies that companies use to manage and analyze customer interactions and data
throughout the customer lifecycle. The goal is to improve customer service relationships and
assist with customer retention and drive sales growth.

A customer relationship management (CRM) system is a software system that helps businesses
manage their interactions with current and potential customers. CRM systems can help
businesses:
 Improve customer relationships: CRM systems can help businesses build and grow relationships
with customers across their entire lifecycle.
 Increase sales and profits: CRM systems can help businesses close more sales deals, increase
sales, and build customer loyalty.
 Streamline processes: CRM systems can help businesses streamline processes and increase
productivity.
 Improve profitability: CRM systems can help businesses improve profitability.
 Unify data: CRM systems can unify customer and company data from many sources.
 Use AI: CRM systems can use artificial intelligence (AI) to automate tasks and provide insights
that help businesses better understand their customers.

CRM systems can include a sales cloud, service cloud, ecommerce cloud, and marketing
cloud. They can also include a customer data platform (CDP) that combines data from online,
offline, and third-party sources.

KNOWLEDGE MANAGEMENT SYSTEM

A knowledge management system is any kind of IT system that stores and retrieves knowledge
to improve understanding, collaboration, and process alignment. Knowledge management
systems can exist within organizations or teams, but they can also be used to center your
knowledge base for your users or customers.
A knowledge management system (KMS) is a tool that helps an organization store, organize, and
access its information. It can help improve collaboration, understanding, and alignment within a
company.

Here are some benefits of a KMS:

 Centralized information
A KMS consolidates information into one place, making it easier for employees to find what
they need.
 Continuous learning
A KMS supports a culture of continuous learning and knowledge retention.
 Self-service options
A KMS can provide self-service options for customers, employees, and business partners.
 AI-powered
Some KMS use artificial intelligence (AI) for automation and process guidance.
Some features of a KMS include:
 Aggregating content from internal and external sources
 Classifying content using taxonomies
 Search
 Expertise location
 Workflows for creating knowledge
 Verification of knowledge
 Views/dashboards

Supply chain management

At the most fundamental level, supply chain management (SCM) is management of the flow of
goods, data, and finances related to a product or service, from the procurement of raw materials
to the delivery of the product at its final destination.

A supply chain management (SCM) system is software that helps coordinate the flow of products
and services, from raw materials to the final customer. SCM systems can include functions from
Enterprise Resource Planning (ERP) software, which optimizes internal processes.

Supply chain management (SCM)

What it is The management of a product's flow, from raw materials to final delivery

Goals Improve efficiency, quality, productivity, and customer satisfaction

Activities Sourcing, design, production, warehousing, shipping, distribution, and more

Components Planning, information, sourcing, inventory, production, transportation, and
return of goods

Software SCM systems can include material handling and software for all parties
involved in product or service creation

Related Blockchain, 5G, quantum computing, artificial intelligence (AI), the Internet
technologies of Things (IoT), machine learning, and automation

Objectives of supply chain management

1. Improving Efficiency
One of the most crucial objectives of Supply Chain Management is efficiency. Efficiency is
synonymous with waste minimisation. Waste can manifest itself in a number of ways, including
wasted materials, wasted money, wasted person-hours, wasted delivery time, and many other
forms. Keeping waste to a minimum is a critical component of Supply Chain Management.

How can SCM contribute to waste reduction? It tries to reduce waste by managing
manufacturing, inventory, transportation, and logistics. It does this by identifying opportunities
to improve systems in order to reduce waste. If, for example, your company shares inventory
data with a supplier and keeps it updated in real-time using ERP software, the company may
replenish inventory promptly to meet buyers’ demand. The process of effectively managing these
functions can be a difficult one to master, but knowing how to do so can be extremely beneficial
to your business’ overall success.

2. Improving Quality
Supply Chain Management is not solely concerned with waste reduction. Another key objective
is to ensure that the product is of the highest possible quality. Quality Assurance can be
characterised as adherence to various customer-specified quality attributes, ranging from
performance to specific features. This includes adhering to food safety regulations,
demonstrating ethical and sustainable practices, and other similar actions. It is critical to
establish precise standards that involve supply partners from the start. Being agile in managing
change and variation to that specification in real-time is essential to allow products to continue
flowing across the supply chain. SCM has a direct impact on the quality of a company’s products
as well as its overall profitability. To achieve a competitive edge in the market while
simultaneously lowering operating expenses, quality management in the supply chain is
essential.
3. Optimizing Transportation and Logistics
The optimization of transportation and logistics is yet another vital goal of Supply Chain
Management. In an independent business environment, each company is responsible for its own
role in ordering, shipping, and transporting goods. Costs are relatively higher in this business
strategy due to poor scheduling and coordination. Supply Chain Management ensures that your
processes flow smoothly and that suppliers, manufacturers, wholesalers, and retailers are always
on the same page. SCM enables you to optimise transportation and logistics activities with any
vendors or purchasers with whom you do business. Orders are automatically entered into a
system, which notifies other facilities that additional resources are required to fulfil this request.
This makes the entire process very smooth and seamless.

4. Reducing Costs
It is the goal of Supply Chain Management to reduce a company’s operating expenses. It lowers
the cost of all types of business expenses, such as the cost of purchasing, manufacturing, and
delivering goods, by establishing an optimised supply chain. It is possible to shorten the holding
period of both raw materials and finished items by allowing a smooth flow of raw materials
between a supplier and a company and the movement of finished goods between a company and
its customers. This helps to reduce losses and keep the overall cost of doing business as low as
possible.

5. Enhancing Customer Satisfaction

One vital objective of SCM is to maximise customer satisfaction. Your supply chain is by far the
most effective means of customer service. It has a direct influence on the two most critical
components of client satisfaction: pricing and delivery. Having an efficient supply chain enables
you to outperform your competition in terms of retail pricing and profitability. Having high-
performing operations also helps you to meet or exceed your customers’ expectations for product
delivery. Providing your customers with what they want, when they want it, and at the lowest
price possible is critical to maintaining their satisfaction.

That is precisely what effective Supply Chain Management empowers you to do. By selecting
the appropriate systems, methodologies, and partners for your supply chain, you can provide the
exceptional service, transparency, and visibility that your customers demand. You maintain
complete control over the lifecycle of your products, from conception to delivery, by establishing
systems that minimise errors and maximise inventory efficiency. The more optimised your
supply chain, the better the customer experience, the happier your customers will be, and the
more likely they will make another purchase from you.

6. Improving Distribution
Businesses benefit from Supply Chain Management because it streamlines the distribution
process. In order to facilitate the speedier movement of goods, it is necessary to achieve proper
coordination between various transportation channels and warehouses. Supply Chain
Management enables businesses to reduce overhead costs while also delivering items more
quickly. As a result, the entire distribution system is improved, allowing for the delivery of
products at the appropriate time and location.

Hence, it is wise to invest in effective technology that allows you to manage inventory quickly,
generate thorough reports, automate delivery, provide real-time tracking, and perform other
distribution functions seamlessly.

7. Maintaining Better Coordination

Supply Chain Management strives to improve coordination between the business’s various
stakeholders. A channel is established, allowing employees, customers, and suppliers to
communicate with the company efficiently. Managers can quickly direct their staff, and
employees can communicate with their supervisors via the established channel in the event of an
emergency. Additionally, customers can obtain necessary information via self-portals established
as part of the customer support system. It facilitates information sharing between all stakeholders
and contributes to building an organisation with exceptional coordination.

Conclusion
Supply Chain Management is a blend of art and science that focuses on how your business
acquires the raw materials necessary to build a product or service, manufactures that product or
service, and delivers it to customers. SCM’s primary goal is to keep a firm afloat and ultimately
to drive it to success. Other objectives of SCM include improving efficiency and quality,
minimising costs, optimising delivery and distribution and providing the best possible experience
to your customers. Supply Chain Management is, indeed, the backbone of any business.

Business process reengineering

Business process reengineering (BPR) is a management practice in which the related tasks
required to obtain a specific business outcome are radically redesigned to improve efficiency,
effectiveness and performance. By critically examining and redesigning business processes, BPR
can also improve other business aspects, such as cost, output, service, speed and quality. BPR
helps organizations to fundamentally rethink how they do their work.

BPR can be effectively implemented in organizations of all sizes and across various industries.

BPR aims to analyze workflows within and between business functions to optimize the end-to-
end business process. It also seeks to eliminate tasks that don't improve performance or provide
the customer with value.

BPR is implemented by analyzing and restructuring current processes in an organization, such as

its workflow for example, with the goal of identifying gaps and redesigning the process to
 streamline and improve it. The use of IT to automate and integrate steps in the process is central
to BPR initiatives.

The steps for business process reengineering (BPR) include:

 Identify the reason for change: Understand why the process needs to be changed
 Map your current business model: Visualize how your business currently creates value and
generates profits
 Design a future state: Develop hypothetical models for improved processes
 Establish a BPR team: Assign project managers and define roles and responsibilities
 Set key performance indicators: Establish metrics to analyze performance
 Test the new process: Implement the new process on a small scale to identify issues and gauge
effectiveness
 Roll out the new process: Use change management to implement the new process across the
organization
 Monitor progress: Closely monitor the process to ensure success

Principles of business process reengineering (BPR) include:

 Link parallel activities: Use technology to link parallel activities throughout the workflow,
instead of just integrating their results.
 Organize work around outcomes: Define roles and responsibilities based on the results
employees are responsible for, rather than the tasks they perform.
 Share resources: Share resources between different departments to create a centralized and
productive operation.
 Understand customer needs: Analyze customer feedback and conduct interviews to understand
customer expectations and preferences.
 Competitive advantage: Focus on core competencies to gain a competitive advantage.
 Simplify processes: Eliminate non-value activities and simplify processes.
 Combine data collection and processing: Combine data collection and processing units to reduce
errors.
 Design result-oriented workflows: Design workflows that are result-oriented, rather than
process-oriented.
 Prioritize processes: Prioritize organizational processes based on how urgent they are to
redesign.
Benefits of business process reengineering

Frequently updating business operations ensures the company stays up-to-date on procedures and
technology. Here are some benefits of business process reengineering:

 Reduced operational costs: You can lower the company's operational costs by
eliminating unnecessary fees that may be part of outdated processes.
 Enhanced quality of products or services: Changing the company's workflow allows
employees to focus more energy on output, leading to higher quality.
 Increased speed of business operations: By streamlining operations, you eliminate
aspects that slow the process down.
 Improved customer service: Speeding up the operations process can lessen customer
wait time.
 Boosted profits: Business process reengineering allows you to reorganize the company
so that efficiency and output remain priorities, which can lead to higher profits.
 Clarified purpose: Business process reengineering allows you to re-familiarize yourself
with your employer's mission and evaluate any changes that occurred over time.

Six Sigma

Six Sigma is a set of methodologies and tools used to improve business processes by reducing
defects and errors, minimizing variation, and increasing quality and efficiency. The goal of Six
Sigma is to achieve a level of quality that is nearly perfect, with only 3.4 defects per million
opportunities.

The Six Sigma method uses a step-by-step approach called DMAIC, which stands for Define,
Measure, Analyze, Improve, and Control.

Step Description

Define Define the problem and set goals for improvement

Measure Translate knowledge about processes into numbers through measurement

Analyze Analyze the data gathered in the Measure Phase and develop hypotheses about the
problem or opportunity
 Improve Improve the process

Control Ensure that the refined processes are maintained into the future

Six Sigma is a business strategy that aims to improve quality and reduce variation in business
processes. It focuses on the customer, understanding and improving work processes, eliminating
defects, and reducing waste.

To work as a professional in the field of Six Sigma, you need to complete the Six Sigma
certifications, such as Six Sigma Yellow Belt, Six Sigma Green Belt, Six Sigma Black Belt, or
Masters Six Sigma Black Belt.
The objectives of Six Sigma are to:
 Improve quality
Achieve a level of quality that is nearly perfect, with only 3.4 defects per million
opportunities.
 Increase efficiency
Reduce defects and increase efficiency through targeted projects.
 Reduce waste
Eliminate any activity in the process that does not contribute to customer value.
 Improve customer satisfaction
Ensure consistency and quality to achieve higher levels of customer satisfaction.
 Maximize customer benefits
Understand the needs of customers and establish quality standards according to their demands.

Six Sigma uses a structured approach called DMAIC (Define, Measure, Analyze, Improve,
Control) to achieve these objectives.

Business process outsourcing (BPO)

Business process outsourcing (BPO) is the delegation of one or more IT-intensive business
processes to an external provider that, in turn, owns, administrates and manages the selected
processes based on defined and measurable performance metrics.
 Business process outsourcing (BPO) is the practice of hiring a third-party service provider to
manage a business function or process. BPO can help companies save costs, improve
productivity, and focus on core business activities.

Here are some benefits of BPO:

 Cost savings
BPO can help reduce labor and operational costs.
 Access to advanced technologies
BPO providers can use technologies like AI, automation, and machine learning to help
businesses get faster and more advanced reporting.
 Improved productivity
BPO can help businesses improve productivity by freeing up time for core business activities.
 Greater flexibility
BPO can help businesses scale their operations up or down as needed without the challenges of
hiring and training additional staff.
Some common BPO services include: Customer service, Accounting, Payroll, and Human
resources management.
BPO services are used in many industries, including healthcare, asset management, energy,
pharmaceuticals, and ecommerce.

What Is Performance Management?

Performance management is a tool that helps managers monitor and evaluate employees' work.
The goal of performance management is to create an environment where people can perform to
the best of their abilities and in alignment with the organization's overall goals. Performance
management is widely used in both the private and public sectors .

How Performance Management Works

A formal performance-management program helps managers and employees see eye-to-eye

about expectations, goals, and career progress, including how an individual's work aligns with
the company's overall vision.

It helps direct the funds allocated as a part of the company's performance budget. Generally
speaking, performance management views individuals in the context of the broader workplace
system. In theory, companies seek the absolute performance standard, even though that is
considered to be unattainable.
Performance-management programs use traditional tools such as setting and measuring goals,
objectives, and milestones. They also aim to define what effective individual performance looks
like and develop processes to measure it. However, instead of using the traditional paradigm of
year-end reviews, performance management turns every interaction with an employee into an
occasion to learn.

Managers can use performance management tools to adjust workflow, recommend new courses
of action, and make other decisions that will help employees achieve their objectives. In turn,
this helps the company reach its goals and perform optimally.

Focusing on continuous accountability creates a healthier, more transparent work environment,

and emphasis on regular meetings can improve overall communications. Because performance
management establishes concrete rules, everyone has a clearer understanding of the
expectations.

When expectations are clear, the workplace is less stressful. Employees are not trying to
impress a manager by doing some random task, and managers aren't worried about how to tell
employees that they are not performing well. If the system is working, they probably know it
already.

Common Steps in Performance Management

Although off-the-shelf performance-management software packages exist, templates are

generally customized for a specific organization's needs. Typically, effective performance-
management programs include certain universal elements, such as:

 Aligning employees' activities with the company's mission and goals. Each employee
should understand how their job contributes to the company's overall goals. Supervisors
and employees together should define a job's duties.
 Developing specific job-performance outcomes. Through performance management,
employees should understand: What goods or services does my job produce? What
procedures does my job entail? What effect should my work have on the company? How
should I interact with clients, colleagues, and supervisors?
 Creating measurable performance-based expectations. Employees should have the
opportunity to give input into how success is measured. The expectations can include
results, which are the goods and services an employee produces; actions, which are the
processes an employee uses to make a product or perform a service; and behaviors,
which are the demeanor and values an employee demonstrates at work.
 Defining job-development plans. Employees should have a say in what types of new
things they learn and how they can use that knowledge to the company's benefit.
  Meeting regularly. Instead of waiting for an annual performance appraisal, managers
and employees should engage actively year-round to evaluate progress.

Performance management can help with:

 Employee engagement
Regular feedback and clear expectations can increase employee commitment and involvement.
 Productivity
When employees understand how their work contributes to the company's goals, they can be
more productive.
 Professional development
Performance management can help employees identify growth and development opportunities.
 Trust
Ongoing communication can help build trust and understanding between employees and
management.
 Organizational success
Performance management can help align individual performance with the company's
objectives.
 Retention
A culture that values contributions and fosters growth can help retain top performers.
 Compensation and promotions
Performance management can help inform decisions about pay raises and promotions.

Enterprise resource planning

ERP systems track business resources—cash, raw materials, production capacity—and the status
of business commitments: orders, purchase orders, and payroll. The applications that make up
the system share data across various departments (manufacturing, purchasing, sales, accounting,
etc.) that provide the data.

Enterprise resource planning (ERP) is a type of business management software that integrates all
of a company's essential functions into a single system. ERP systems help companies manage
their day-to-day operations, including:
 Finance: Accounting tools like accounts receivable and payable, general ledger, expense
management, and reporting
  Supply chain: Managing inventory and purchasing
 Human resources: Managing HR data
 Sales and marketing: Managing sales and marketing data
 Project management: Managing project data

Here are some benefits of ERP systems:

 Streamlined processes
ERP systems integrate various functions into a single system, which can streamline processes
and information across the organization.
 Improved efficiency
ERP systems can help organizations operate more efficiently by reducing errors and waste.
 Real-time insights
ERP systems can provide dashboards and AI-driven insights that give an overview of a
company's finances in real time.
 Regulatory compliance
ERP systems can help companies meet regulatory compliance requirements.
 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.

Total quality management (TQM) is a management philosophy that aims to improve the quality
of a product or service through continuous improvement and customer satisfaction. TQM
involves all members of an organization, from low-level workers to executives, in the effort to
improve quality.

Here are some key aspects of TQM:

 Continuous improvement: TQM is based on the idea that organizations can achieve long-term
success by continually improving their processes and products. This is known as Kaizen.
 Customer focus: TQM prioritizes customer needs and aims to exceed customer expectations.
 Employee involvement: TQM involves all employees in the quality improvement process, which
can help to increase morale and motivation.
 Supply chain management: TQM can help to simplify supply chain management.
 Error detection and reduction: TQM can help to detect, reduce, or eliminate errors in the
manufacturing process.
 Training: TQM can help to ensure that employees are up to speed with training.

How Does Total Quality Management (TQM) Work?

 Total Quality Management involves continuous improvement, leveraging data and
metrics to make informed decisions, fostering a culture of teamwork and innovation, and
aligning strategies with customer needs. Among the primary TQM principles is
customer satisfaction – in other words, meeting and exceeding customer needs.
 Quality is integral in every aspect of operations, with the goal of striving for excellence
in products, services, and internal processes while adapting to evolving market demands.
Satisfied customers is the outcome of such a quality-integrated system.
 Related to TQM is the concept of Kaizen, a Japanese term for “continuous
improvement.” This concept emphasizes incremental changes made by every employee.
It’s ideal for organizations looking to instill a culture of constant, small-scale
improvements. Kaizen encourages employee engagement, fosters creativity, and
is effective in workplaces where innovation and adaptability are paramount.

The Key Players in Total Quality Management: Customers, Suppliers, and

Employees

In Total Quality Management (TQM), customers, suppliers, and employees play pivotal roles
as key stakeholders contributing to quality assurance and quality control in an organization.

 Customer focus is central; customer satisfaction steers the direction of quality

standards. Understanding the feedback they provide on-demand products, preferences,
and experiences is fundamental to delivering products or services that surpass
expectations.
 Suppliers represent another critical element. They provide the raw materials and inputs
necessary for a production process or insight into the planning phase of the overall
manufacturing processes, directly impacting the quality of the final output. Collaborating
closely with suppliers ensures consistency and reliability in the inputs, thus influencing
the quality of the end product or service.
 Employees must be on the same page as top management to properly apply total quality
management tools. Examples include the integration of each production process as a
holistic view of the overall manufacturing processes. The widely agreed-upon approach
to TQM helps build integrated systems that foster customer satisfaction.
 Empowering and engaging employees at all levels fosters a culture where everyone
contributes ideas, innovation, and efforts toward achieving superior quality, ultimately
benefiting the customers and the organization as a whole.
  TQM processes are used to improve processes, instill an organizational commitment to
quality assurance and quality control, and dedication to continuous improvement that
materially drives customer satisfaction.

Principles of Total Quality Management (TQM)

Total Quality Management (TQM) encompasses a set of fundamental guidelines aimed at

fostering a culture of quality excellence within an organization. The American Society of
Quality (ASQ) outlines seven principles within their strategic and systematic approach (ISO
9000).

Customer Focus

Understanding, meeting, and exceeding customer expectations is at the core of TQM. With
proper training, TQM focuses on an enduring organizational culture to anticipate and respond to
customer input and feedback (i.e., customer satisfaction) as the key concept to remain
competitive.

Leadership Commitment

Active management participation to demonstrate their dedication and involvement in

championing quality management initiatives throughout the entire organization. To achieve
success, the core values of delivering quality are inherent in TQM strategies.

Employee Involvement

Encourage and empower employees at all levels to contribute ideas and efforts in a continuous
effort to achieve quality improvement. Total employee involvement integrates quality
throughout the production cycle. Quality-related issues and other immediate process issues are
addressed promptly.

Process-Oriented Approach

Emphasizing systematic and structured methods for achieving quality goals. The systematic
approach to process improvements is customer-focused, with quality planning to improve service
quality throughout the customer journey.

Continuous Improvement

The core component of TQM is the commitment to delivering quality and the continuous effort
to improve the quality of products and services. TQM strives to achieve excellence and total
quality control as part of the strategic plan of optimizing and improving processes.
Evidence-based Decision Making

Tools must collect and apply accurate data and rigorous analysis to drive informed
decisions. Basic tools and organizational performance data used by TQM practices can span
cross-functional teams.

Supplier Relationships

Supply chain management is a critical component of modern quality control. Companies

collaborate closely with suppliers to ensure joint quality planning, from basic raw materials and
inputs, as part of an integrated system of business processes and production processes.

These principles collectively aim to cultivate a culture where quality is everyone’s responsibility,
striving for excellence and continuous advancement in all aspects of the organization to meet or
exceed customer expectations.