FM CBMEC 1 –

Operations Management
(TQM)
 Chapter 1:

Introduction to
Total Quality
Management
Objectives:
At the end of the chapter, the students should be able to:
 State a brief introduction of TQM
 Define Quality.
 Identify primary elements core concepts, and benefits of TQM.
 Distinguish between traditional management and TQM.
 Compare and contrast reengineering and TQM.
Introduction

 In this day and age, companies must compete on the global market
for customers who expect nothing less than perfection. A modern
management concept such as Total Quality Management (TQM)
helps improve the quality of products and services to achieve
maximum customer satisfaction.
 The concept of TQM is most applicable to companies and
organizations that are heavily department-focused. In such
organizations, the left hand often doesn't know what the right
hand is doing, as the saying goes, and inter-department struggles
negatively affect how customers’ needs and wants are met.  
 With TQM, everyone in the company or organization is responsible
for quality assurance and problem prevention. This management
concept was originally applied solely to manufacturing, but it has
since been successfully implemented by a number of businesses
across many industries.
What is Quality?
 In order to understand “Total quality management”, first
we have to understand what does Quality actually mean?
 Quality is generally referred to a parameter which decides
the inferiority or superiority of a product or service.
 It is a measure of goodness to understand how a product
meets its specifications.
 Usually, when the expression "quality" is used, we think in
the terms of an excellent product or service that meets
or even exceeds our expectations.
 These expectations are based on the price and the
intended use of the goods or services.
 In simple words, when a product or service exceeds our
expectations we consider it to be of good quality.
Approaches to Quality
Definition
1. The Transcendent Approach
According to the transcendent view, quality is
synonymous with “innate excellence.” It is both
absolute and universally recognizable, a mark of
uncompromising standards and high achievement.
Nevertheless, proponents of this view claim that
quality cannot be defined precisely; rather, it is a
simple, unanalyzable property that we learn to
recognize only through experience.
2. The Product-based Approach
Product-based definitions are quite different; they view
quality as a precise and measurable variable.
According to this view, differences in quality reflect
differences in the quantity of some ingredient or attribute
possessed by a product.

3. The User-based Approach

User-based definitions start from the opposite premise that
quality “lies in the eyes of the beholder.”
Individual consumers are assumed to have different
wants or needs, and those goods that best satisfy their
preferences are those that they regard as having the highest
quality.
4. The Manufacturing-based Approach
manufacturing-based definitions focus on the supply side of
the equation, and are primarily concerned with engineering and
manufacturing practice.
Virtually all manufacturing-based definitions identify
quality as “conformance to requirements.” Once a design or a
specification has been established, any deviation implies a
reduction in quality. Excellence is equated with meeting
specifications,
5. The Value-based Approach
Value-based definitions take this idea one step further.
They actually define quality in terms of costs and prices.
According to this view, a quality product is one that provides
performance at an acceptable price or conformance at an
acceptable cost.
Quality Types
1. Quality of Design
Quality of design is all about set conditions that the
product or service must minimally have to satisfy the
requirements of the customer.
Thus, the product or service must be designed in such
a way so as to meet at least minimally the needs of the
consumer.
The design must be simple and also less expensive so
as to meet the customers' product or service expectations.
2. Quality of Conformance
Quality of conformance is basically meeting the standards
defined in the design phase after the product is manufactured
or while the service is delivered.
This phase is also concerned about quality is control
starting from raw material to the finished product.
Three broad aspects are covered in this definition, viz.
defect detection, defect root cause analysis, and defect
prevention.
3. Quality of Performance
Quality of performance is how well the product
functions or service performs when put to use. It
measures the degree to which the product or Service
satisfies the customer from the perspective of both quality
of design and the quality of conformance. Meeting
customer expectation is the focus when we talk about
quality of performance.
Quality Level
1. Organizational Level
The organizational level quality requirements revolve
around its customers quality requirements. A customer is
anyone who receives one or more of the organization’s products
or services who could be an internal or external one. The
following issues may help define quality at this level:
 Products or services that meet the customer expectation.
 Products or services that do not meet customer expectation.
 Products or services that are needed by the customers but
they do not received.
 Products or services that are not needed by the customers
but they do not received.
The resolution to these issues will include productivity and cost
requirements and those that are traditionally linked to quality.
Timeliness, accessibility, and value for money are quality
features for a customer.
2. Process Level
At the process level, units of the organization are categorized into
functions or department like marketing, operations, finance, and
human resource and so on. Most processes are cross – functional so
managers can optimize the activities of his department and sub –
optimize the activities of the entire organization. The following issues
may help define quality at this level:
 Products or services that are most important to external customers.
 Processes that produce those Products or services.
 The key inputs to the process.
 Processes that have the most major effect on the organization’s
customer drive
 performance standards

Defining quality at the process level starts with determining the

end – customer requirements for the process.
3. Performer/Job/Task Design Process
 Individuals are one of the vital components of the human
performance system.
 They serve as a reflection of the process and the system
being used by the organization.
 Each individual under the human performance system accepts
inputs, generate outputs, and then adjust his performance
from the feedback obtained.
 Developing standards to measure each individual key output
is a necessity to define individual quality.
 The standards created from organization and process levels
should be the basis for these standards to be developed.
 Productivity and cost are the requirements for a customer
driven quality. With these requirements the areas to be
measured to qualify individual standard would include
accuracy, completeness, innovativeness, reliability,
timeliness, volume, rate, cost, and flexibility.
Quality Paradigms
1. Custom – Craft Paradigm.
The custom-craft paradigm focuses on the product
specification relative to customer demands.
In this case the craftsperson and customer
communicate directly so the product is customized to
exactly what the customer wants.

2. Mass Production and Sorting Paradigm

The focus in the mass production and sorting
paradigm is on productivity. Customers are often
contacted through mass advertising sales promotion.
3. Statistical Quality Control Paradigm
The statistical quality control paradigm is similar to the
mass production and sorting paradigm with the difference that
more attention is given to production processes.
Statistical process control and lot-by-lot sampling
inspection are used. The result is far less scrap and rework
than in the mass production and sorting paradigm. Product
performance and timeliness are similar to that obtained with
the mass production and sorting paradigm.
4. Total Quality Management Paradigm
The total quality management (TQM) paradigm involves
customers and suppliers in addition to mass production and
statistical methods.  TQM paradigm recognizes the
importance of customer focuses on continuous quality
improvement in day-to-day processes, aiming at higher product
performance, lower cost, and faster delivery.

5. Techno – Craft Paradigm

The techno-craft paradigm is the socio-technical
counterpart to the custom-craft paradigm.
The techno-craft paradigm is a new frontier in quality that
seeks to emulate the custom-craft paradigm in performance,
but reduce the cost and the delivery time.
The techno-craft paradigm is possible through the
proper integration of people, machines and automation.
Cost of Quality
1. Prevention Cost
The costs associated with preventing the potential for
quality problems. These can consist of training costs,
quality improvement program costs, design costs,
preventive maintenance costs, data collection and analysis
costs, etc.
2. Appraisal Cost
The costs associated with determining the quality of
the systems or products. These can consist of inspection
equipment costs, testing costs, laboratory costs, inspector
costs, costs associated with evaluating the performance of
the systems and products, etc.
3. Internal Failure Cost
The costs incurred as a result of a product failure before
it is delivered to the customer. These can consist of rework
costs, scrap cost, downtime, etc.

4. External Failure Cost

The costs incurred when a product fails after it has been
delivered to the customer. These can consist of rework costs,
warranty costs, liability claims, penalties, etc.
Defining Total Quality
Management

 Total Quality Management is defined as a customer-

oriented process and aims for continuous improvement
of business operations.
 It ensures that all allied works (particularly work of
employees) are toward the common goals of improving
product quality or service quality, as well as enhancing
the production process or process of rendering of
services.
 Total quality management (TQM) is the continual
process of detecting and reducing or eliminating errors
in manufacturing, streamlining 
supply chain management, improving the customer
experience, and ensuring that employees are up to
speed with training.
 Total quality management aims to hold all parties
involved in the production process accountable for the
overall quality of the final product or service.
 TQM is a continuous process of improvement for
individual, groups as well as the entire organization,
whereby managers attempt to change the organization’s
way of working by developing people’s knowledge about
what to do, how to do, doing it with the right methods
and measuring the improvement of the process and the
current level of achievement.
The Primary Elements of TQM

Quality is necessary parameter which helps organizations

outshine their competitors and survive the fierce competition.
The achievement of TQM depends on the following eight
elements which are further classified into following four groups.
Foundation
The entire process of TQM is built on a strong foundation of
ethics, integrity, and trust. TQM involves every single employee
irrespective of his designation and level in the hierarchy.
1. Ethics - is a combination of written and unwritten codes of
principles that govern decisions and actions within a company.
It is an understanding of the difference of good and bad
decision making and behavior at the business world. It boils
down to following the code of conduct of organization and
adheres to rules and regulations.
2. Integrity – is the consistency of action, values, methods,
measures, principles, expectations, and outcomes at
workplace. There is a need to respect organizations policies.
Avoid spreading unnecessary rumors about fellow workers.
TQM does not work in an environment where employees
criticize and backstab each other.
3. Trust – is one of the most important factors necessary
for implementation of TQM because it builds a cooperative
environment.
It is a relationship based on reliance. Employees need
to trust each other to ensure participation of everybody
and allows empowerment that encourages pride of
ownership and commitment. Trust improves relationships
among employees and eventually helps in better decision
making which further helps in implementing TQM
successfully.
Building Bricks
Bricks are placed on a strong foundation to reach the roof
of recognition. The foundation needs to be strong enough to
hold the bricks and support the roof. Leadership, Teamwork,
and Training are the building bricks of TQM.
1. Leadership – provides a direction to the entire process of
TQM. It is about raising the aspiration of followers and
enthusing people with a desire to reach the goals.
Leadership in TQM requires the manager to provide an
inspiring vision, make strategic decision, and instill values
that guide subordinates. TQM needs to have a supervisor
who acts as a strong source of inspiration for other members
and can assist them in decision making. A leader himself
needs to believe in the entire process of TQM for other to
believe in the same.
2. Teamwork – is a crucial element of TQM. Rather than
working individually, employees need to work in teams.
When individuals work in unison, they are in a position to
brainstorm ideas and come up with various solutions
which would improve existing processes and systems.
Team members ought to help each other to find a
solution and put into place.
3. Training – employees need to be trained on TQM to
become highly productive. Managers need to make their
fellow workers aware of the benefits of TQM and how
would it make a difference in their product quality and
eventually yield profits for their organization. Employees
need to be trained on interpersonal skills, the ability to
work as a team member, technical know-how, decision-
making skills, and problem-solving skills and so on.
Training enables employees to implement TQM
effectively within their departments and also make them
indispensable resources.
Building Mortar
 Building mortar binds all the elements together.
Communication binds everything together, starting from
foundation and going up to the roof.
 Communication is the vital link between all the TQM elements
and must be prevalent in an organization in order for TQM to
work the way it should.
 The channels of communication need to be credible and easily
interpreted for all members of the organization.
 Communication binds employees and extracts the best out of
them.
 Information needs to be passed on from the sender to the
recipient in its desired form.
 Small misunderstandings in the beginning lead to major
problems later on.
 Employees need to interact with each other to come up with
problems existing in the system and find solutions as well.
Three types of communication take place between employees.
1. Downward communication – this is the dominant form of
communication in an organization. Presentations and discussions
are two examples of this form of communication. Flow of
information takes place from the management to the
employees. The supervisors are able to make the employees
clearly understand TQM using this type of communication.
2. Upward Communication – flow of information takes place from
the lower-level employees to the top level management. The
lower-level employees are able to offer suggestions on the
effects of TQM to the upper level management using this type of
communication. Supervisors should listen effectively and
incorporate the insights and constructive criticisms offered by
the employees in correcting the situations that arise through
the use of TQM. This creates a level of trust between
supervisors and employees. This is also similar to empowering
communication, where supervisors listen to others.
3. Sideways/Lateral Communication – Communication also takes
place between various departments. This type of
communication is important because it breaks down barriers
between departments. It also allows a more professional dealing
with customers and suppliers.
Roof
 It includes recognition which brings greater internal
customer satisfaction which in turn leads to external
customer satisfaction in the organization. There can be
huge change in self-esteem, productivity, and quality when
the contributors are recognized.
 Recognition is the final element of TQM. Recognition is the
most important factor which acts as catalyst and drives
employees to work hard as a team and deliver their lever
best.
 Every individual is hungry for appreciation and recognition.
Employees who come up with improvement ideas and
perform exceptionally well must be appreciated in front of
all.
Core Concepts of TQM
Each of the following core concepts of TQM can be used to drive
the process of continuous improvement and to develop a
framework for quality improvements over many years.
1. Customer Satisfaction
Is a marketing term that measures how products or services supplied
by a company meet or surpass a customer’s expectation. It is
important because it provides marketers and business owners with a
metric that they can use to manage and improve their businesses.
TQM is centered on the requirements of the customer. In order to
meet customer requirements, it is imperative to listen to them and
do what is agreed upon.
2. Internal Customer Satisfaction
Customers are not only external, but there are also internal
customers. Internal customers have a relationship with, and
within, your company, either through employment or as
partners who deliver your product or service to the end user or
the external customer. Less obvious but certainly still
significant, stakeholders and shareholders are also internal
customers. All of these may or may not purchase your
product or service.
3. All work is Process
Another possible focal point of improvement is that of
business processes. A process is a combination of methods,
materials, manpower, and machines that work collectively to
produce a product or service.

4. Measurement
In order to improve, one must first measure one’s
present performance. This will help one focus both on
satisfying internal customers and meeting the requirement of
external customers.
5. Synergy in teamwork – the idea in synergy in teamwork,
where the whole is greater that sum of the parts, is the key
concept in TQM. Here, it is used to promote collaboration,
consensus, creative conflict, and team winning. One of the
strength of using teams for TQM is that they can merge the
mutually restricted individual qualities needed for running
business today. Teamwork can provide opportunities for
people to work together to reach quality improvement.
6.People make Quality – most of the quality problems
within an organization are not usually within the control of
an individual employee. The system often comes in the way
of employees who are trying to do a good job. In such a
situation, motivation by itself cannot work. Therefore
managers are required to ensure that all necessary is
prepared to let people to produce quality. This creates an
environment where people are eager to take responsibility
for the quality of their own work.
7. Continuous Improvement Cycle
The continuous cycle of instituting customer requirements,
meeting and measuring them, measuring success and
continuing the improvement can be used both externally
and internally to stimulate quality improvements. The
continuous improvement cycle used over and over again
will lead to a fresh “chemistry” within the organization so
that the culture starts to change to one of continuous
improvement.
8. Prevention
At the heart of TQM is the conviction that it is possible to
achieve defect-free work most of the time.
This is termed “right first time, every time” or zero
defects. The “right first time, every time” or zero defects
policy is the result of an emphasis on prevention, and the
diligent use of measurement, process controls, and the
data-driven elimination of waste and error.
It serves as goal for continuous improvement.
Prevention is the goal of all quality assurance. Through
planned and systematic action quality assurance
prevents quality problems.
Benefits of TQM
There are many benefits of TQM. Essentially, TQM refers
to the total quality in fulfilling the needs of customers, the
quality of the products and the quality of life.
1. Creates a good corporate culture – TQM is an approach
where the customer is the center point of the business
rather than the department.
Therefore, quality is transformed from an issue of the
production department to a strategic business entity to meet
global challenges.
The TQM philosophy revolves around developing a
culture that supports total commitment to customer
satisfaction through continuous improvement.
2. Better reviews from customers – another benefit of TQM is
that customers and clients are highly satisfied with the
performance.
Given the quality assurance testing procedures, the products
of the company will constantly meet the requirements and
needs of clients and customers.
Therefore, the customers stay with the company longer,
deepen their relationship with the company, and demonstrate
less price sensitivity while recommending the company’s
products or service to others.
3. Better performance from employees – through TQM
there is often more attention placed on meeting the needs
of the employees or internal customers.
The training given to the employees as part of the program
can boost employee’s morale at the workplace resulting in
employees working harder to achieve the goals of TQM.
Thank you!