Total Quality Management
Total Quality Management(TQM) is an organisational process that actively involves every function and every employee in satisfying customers needs, both internal and external. TQM works by continuously improving all aspect of work through structured control, improvement and planning activities that are carried out in concern with guiding ideology that focuses on Quality and Customer Satisfaction as the top priorities.
There has been many arguments that TQM succeeds only by incorporating a concern about quality for the customers throughout the organisation. The truth of this statement and those facts that disagree with this statement will be look into and discuss in more detail to achieve the success of TQM.
TQM recognises that the Customer is at the center of every activity. The customer may be external or internal. The key is to determine the gap between what the customer needs and what the system delivers. Once the gap is recognised, it would be systematically reduced and results in never-ending improvement in customer satisfaction at every level.
TQM depends on and creates a culture in an organisation which involves everybody in quality improvement. Everyone in the company can affect quality but must first realise this factor and have the techniques and tools which are appropriate for improving quality. Thus TQM includes the marketing and dissemination of quality and methods not only within the organisation and customers but also to suppliers and other partners.
The general view to achieve success in TQM could be summarised as below:
Quality as strength
Quality in all processes
The importance of management
The involvement, commitment and responsibility of everybody
Continuous improvement
Zero defects
Focus on prevention rather than inspection
Meeting the needs of target customers
Recovery
Benchmarking
A prerequisite for successful quality improvement is first, to understand how quality is perceived and valued by customers.
4 'Q'
Design Quality Technical Quality
Production Quality
Delivery Quality Functional Quality
Relational Quality
Image
Experiences
Expectation
Customer Perceived Quality
=
Customer Satisfaction
Figure 1: Gronroos - Gummesson Quality Model (1987)
Gronroos and Gummesson has combined their 'Customer Perceived Quality' model and the 4 "Q" model to stress the importance of customer. The intergrated model focuses solely for the organisation to achieve customer satisfaction through improving the quality for the customers.
Morup (1992) notes that "quality is the most important and effective factor a company can use in the battle for customers." To be competitive, we must satisfy the customers. In order to be more competitive, we must delight the customers. Quality is here defined as the measure of customer delightment.
Kaizen provides the philosophy and driving force for designing the quality. If quality is made the global driving force, then customers will obtain the best value possible and use the product. The concern about quality will optimise the value for customers.
The TQM perspective involves not only quality in relations with external customers but also quality in the internal service chains and in relation to suppliers and other partners.
This "Quality Chain" involves everyone in the process and applied throughout the organisation.
Customer orientation and quality are not just a matter of ensuring that the contents of the product or services satisfies the customer needs. The manner in which the service is delivered and the customers' relations with the company must also meet the customer's expectation.
Sales
Customer Satisfaction
Quality Improvement
As the above graph indicates the sales increases directly with an increase in customer satisfaction. Customers are satisfied with improvement in quality. The more quality improves, the faster sales will increase because customer satisfaction carries its own acceleration. When the quality reputation grows, marketing can emphasize increasing customer satisfaction as a major element in advertising and the other promotions.
As Deming wrote in his book "Out of the Crisis," it will not suffice to have customers that are merely satisfied. An unhappy customer will switch. Unfortunately a satisfied customer may also switch, on the theory that he could not lose much and might gain. Profit in business comes from repeat customers, customers that can boast about your product and service, and that bring friends with them. He further stated that we should stay ahead of the customers. This could be achieved through constant quality improvement and innovations.
Why Do Companies Lose Customers:
Death of Customer 1%
Customer Moving Residence 3%
Lower Price Elsewhere 5%
Unsatisfactory Handling of Complaints 14%
Suppliers' Lack of Interest 68%
As shown in the above graph above TQM's success includes the incorporation on quality of the after sales service and follow up. The quality needed in maintaining a customer will be less as compare to gaining a new customer. TQM success would therefore not only focus on gaining new customers but maintaining the current customers, through improvement in quality for customers.
Eventhough the main concern about TQM is highly focused on the customers, the focus on internal process cannot be left out. TQM's success may not lie only on the quality for the customer but the quality of the organisation as a whole. The core concept is discussed below:
Right First Time / Zero Defects
TQM stress of the importance of zero defects and achieving the right target the first and everytime. Variances in product are not acceptable and methods such as the Statistical Process Control (SPC) is use to achieve the objective. Zero defects is the result of an emphasis on prevention and diligent use of measurement, process control and the data driven elimination of waste and error. As Crosby said, "The purpose of quality management is to set up a system and a management discipline that prevents defects from happening in the company's performance cycle."
Cost of Quality
This is the cost incurred in achieving a quality product or services. These may be prevention cost, appraisal cost, internal failure cost, external failure cost, the cost of exceeding customer's requirement and the cost of lost opportunities.
Competitive Benchmarking
Comparing with competitors is another reflex of TQM. This is a continuous management process that helps firms access their competition and themselves and to use that knowledge in designing a practical plan to achieve market superiority. When done correctly, benchmarking produces the hard facts needed to plan and execute effective business strategies.
Involvement of Everyone
In TQM everyone is involved in the process of making the company a successful business. Everyone in the company is responsible for producing quality goods and services and reducing the cost of quality.
Synergy in Team Work
In Japan, there is no status difference as they believe in synergy. Therefore they consider themselves as partners depending on each other for effective management and success.
Ownership and the Elements of Self-Management
Total quality programmes are founded on the principal that people want to own the problems, the process, the solution and ultimately the success associated with the quality improvement. Psychologically, the ownership advocated by TQM ties in the development in organisational design away from traditional models of imposing management control over employees' behaviour.
Recognition and Rewards
TQM system considers the rewards and recognition to be critical to a company's programme, particularly when greater involvement of staff is required. Positive reinforcement through recognition and rewards is essential to maintain achievement and continuous improvement through participative problem-solving projects.
The Quality Delivery Process
TQM is not just the awareness of quality for the customers. It demands the implementation of a new system.
Finally, the main objective of TQM may put the customer at the center of every activity and consider the process as customer driven, but all other factors which do not involve the customers have to be taken into consideration for the successful implementation of TQM.