The Business Financial

Total Quality Management

The term Total Quality Management or TQM is defined as a mutual type of doing business that focuses on relying on the skills and abilities of the labors as well as the management in order to bring a continuous improvement in the quality and productivity of the organization by working in the form of teams. However, this concept of quality has not emerged overnight. Total quality management has its roots back to the era of 1970s and 80s when the US companies were struggling for their survival in an adverse atmosphere of recession, decline in business, deregulations, increasing competition, growing trade deficit, low productivity and a more aware and educated customer demanding more quality products. The giants of the American economy such as Ford motors and Xerox has suffered from huge losses in this period because of the unfavorable market conditions and increasing competition from the foreign competitors. This was the time when the true concept of TQM begins to emerge and companies started realizing the importance of quality. 

The most prominent figure in the development of the concepts of Total Quality Management is of Dr. W. Edwards Deming, an American statistician who is known as the father or TQM. The majority of the core concepts of TQM were brought forward through the work of Dr. Deming. He was more appraised by the Japanese than his countrymen and was invited several times by the Japanese to guide them in developing effective quality management tools. He guided the Japanese in recuperating their industries after the World War II. He also helped the American industries during the World War II by teaching them the use of different statistical methods to improve the quality of the product. Later he used this experience in forming new ideas for the development of tools for quality management. (Bank, John)

As mentioned earlier, the Japanese gave due consideration to the concepts and ideas of Deming while the American firms did not gave much attention to his works. The reason was that the American businesses at those times were considered to be the most successful and the American management practices were considered to be the most effective. Moreover, the American market was not much crowded from the foreign competitors at that time. On the other hand, the Japanese businesses lack the skills and talents to produce high quality products that may be comparable to their American counterparts. This was the reason that the industrial leaders of Japan invited Deming to teach them his methods for improving quality. The first thing that Deming focused on, while taking the initiative to improve quality, was to identify the wants and needs of the customer. He then recommended them to study and bring improvements in their production processes. He stressed on the need to bring continuous improvement until the quality of the product is unmatched. He further urged them to shift the focus of their business from profits to quality. He argued that this approach will automatically increase the profits of the firm not only in the short term but also in the long term. He stressed on the need to train the employees within the organization so that they can effectively monitor and control the production processes and bring continuous improvements to it using different scientific approaches. His argument in this regard was that when the employees of a company will collectively focus on improving their work processes, they will easily not only meet the expectations of the customer but in most of the instances they will exceed customer’s expectations. While controlling the production processes of the firm using the total quality tools, different scientific tools and approaches are used to make important decisions related to quality. By using these approaches the quality of products or services is improved by improving the process of design and production.

Deming criticized the use of the management by objectives approach as he saw numerous defects in the MBO model. He argued that the practice of defining specific performance standards or quotas is going to negatively affect the productivity of the employees. According to him when a firm adopts the MBO model it measures and evaluate the performance of the employees with respect to the numerical goals defined by the management. This results in the form of a protective behavior among the workers, managers and supervisors as they tend to defend themselves from getting failed to meet the goals. This approach cost s a lot to a firm in the long term. It not only affects the quality of work but also threatens the long term growth of the company. As employees are worried to meet the quotas to prove their performance, they lose the sight of the broad objectives of the organization. When the management keeps the change in focus, the roles and responsibilities of the workers and the managers are transformed.

Although it is the worker who will produce quality products, Deming has stressed on workers pride and satisfaction rather than on establishment of quantifiable goals. His overall approach is to focus on the improvement of the process rather than the worker. He stresses that if you want to make things happen for you then you need to have a strategy and a plan, which is truly shared whole-heartedly, supported by everybody who has a part to play in its achievement. They need to take into account all of the external forces which might have an effect on the success of your plans.

Deming’s universal fourteen points for management are as follows:

1. The purpose should be consistent encompassing a plan.

2. The organization has to adopt a new philosophy of quality i.e. keeping in mind the customers needs and focused on the customer preferences. The strategy will not work unless the quality drive is developed.

3. Do not depend on mass inspection.

4. The practice of choosing the supplier on the basis of price should be eliminated.

5. Problems should be continuously identified to improve the system.

6. Modern methods of training should be adopted at the job.

7. Organization should focus on quality rather than on quantity.

8.  Drive out fear from your workers. He advocates the elimination of fear in the workplace so those employees can work effectively toward the aim of the organization. The elimination of fear is necessary to create an environment of trust and cooperation, essential ingredients to initiating and sustaining a total quality effort, pursuing continuous improvement, encouraging innovation, and achieving customer delight. Fear is an element that cannot be eliminated, rather managed. This is always associated to a negative perspective. Therefore managers need to drive out fear from their employees so that they can utilize their full potential at the work place.

9. Barriers to communication should be eliminated between departments

10. Stop the habit of requesting for improved productivity without providing the methods to achieve it.

       supply on time

      get it right first time

      supply what the customer ordered

11. Eliminate those work standards that prescribe numerical quotas.

12. Remove barriers to pride of workmanship. Knowledge of psychology is incomplete without knowledge of variation.

A manager needs to understand that all people are different. There is very remote possibility of ranking people. The manager needs to understand that the performance of a worker is governed largely by the system that he works in. A psychologist that possesses even a crude understanding of variation could no longer participate in refinement of a plan for ranking people.

13. Give constant training and education to your workers. The overall objective should be to develop managerial and leadership skills and to develop managers and Supervisors and team leaders as a team and to contribute to the organization’s improvement activities. It will develop

• Cross-functional co-operation
• A shared set of management values
• Improved managerial skills

This will lead to improved business performance and improved staff motivation and retention.

14. Make the top hierarchy responsible for the implantation of these preceding thirteen points. (Oakland, John)

But the question is as to how we are going to achieve our goals? The answer to this question is:

• Understanding the consumers needs and listening to their  feedback
• Understanding the process, improving it and measuring its performance.
• It should be embedded in the corporate culture.
• Take into account the development of our competitor.

Involving the staff at all levels of management and listening to their problems and suggestions. Improvement is achieved by and through people; it is a team process. Therefore people need to be trained in understanding processes, measuring and charting process information, problem solving techniques, how to prevent errors and how to monitor the effectiveness of solutions implemented.

Deming assured the Japanese that by adopting the methods described by him, they will be able to increase the worldwide demand of their products within few years. His predictions proved to be true and soon the Japanese industries gained huge shares of some of the major world markets.

The Implementation of Total Quality Management.

When TQM is implemented a five-phase approach is used with the main emphasis on addressing core issues and describing costs and rewards of implementing change.  This five step approach include the following (1) Preparation; (2) Planning; (3) Assessment; (4) Implementation; (5) Diversification.

1) Preparation

This step involves the definition of the company’s mission statement, goals, objectives, and formation of policies that are in line with the main strategic plan. Planning serves as a foundation for initiating the process of change within the organization.  In addition to this, measurements are also involved in which the information is exchanged that will be necessary to support the preparation, planning and the implementation phase.  Preparation also includes the decision making within the company. It is clear to each and every participant that the actions performed by him/her and their role are equally important to the actions and roles of other employees.  It is very important to realize the fact, for all employees involved in the process, that quality is the guiding force and that it is their duty to ensure that it is implemented in every stage of the process. (Jablonski, Joseph)

2) Planning:

The second step involved in the process is planning. Accurate and efficient planning is a primary obligation for effective quality management in all organizations. However, it should be continuously reviewed in order to ensure the effectiveness of quality, so that the objective of zero errors or defects is achieved. The required resources should be made available so that a variety of assignments can be carried out. It should be kept in mind that it is necessary in quality planning that the existing programs and strategies be reviewed within the functional areas of the organization and the results thus generated be compared with the with the results of the preliminary analysis to appraise the strengths and the weaknesses in quality throughout the business.

Moreover, when there is a new product or service to be introduced or any new process is to be defined, written quality plans should be prepared in order to define the specific responsibilities and authorities for different work groups so that they can perform their roles during the different stages of the project. In addition to this specific procedures, methods and instructions should be applied throughout the project and suitable inspection, testing, checking or audit programs should be conducted at various defined stages.

        The quality plan should also emphasize on providing action in order to avoid the loss of profits. If the management finds at any stage that the quality management system is not achieving this objective, then they should find out what is wrong with the plan.

 3) Control:

The most important step in the TQM implementation process is control. It is usually assumed that the role of inspection or testing functions is to find out the good products from the bad one however it should actually focus on performing as an active device to prevent from errors or defects. When it comes to human control more care is required because it is repeatedly found that every element of product or service is examined in an effort to prevent the errors or defects from reaching or being observed by the customer.

In the control system of an organization, the measurement of inputs, outputs, and processes themselves is a critical component of Total Quality Management.

Numbers and measurements are necessary for the processes to be known.  If inputs and the outputs can be measured and expressed in numbers, then something is known about the process, and control is possible. If the company really wants to bring further improvements in the quality of its products or services, decisions regarding the actual measurement process and the people who will carry out the measurement must be made with great care. Moreover, the measurements to be used for quality improvement must be accepted by the people involved with the process being measured. (B. Brocka & S. Brocka)

 4) Implementation:

The final stage of the process is implementation. Implementation is the point where the company starts receiving feedback on its efforts by seeing results from planning, control of resources and its training of the relevant people. (B. Brocka, S. Brocka)

Examples of successful implementation of TQM:

• Florida Power & Light (FPL) reduced customer complaints by 60% and improved reliability of electric services to customers by 40% in 1983. In 1987, the firm was rated by 156 utility CEO’s as the best managed utility in the nation.
• In its remittance banking or lock-box business, First Chicago’s accuracy rate is nearly three times the industry average.
• Xerox has started to regain its market share in copiers from the Japanese.
• Ford now has one of the most popular cars purchased by Americans, the Taurus (Judith Ann: Total Quality Management)

References

1) Jablonski, Joseph: Implementing TQM: Pfeiffer, 1992.

2) Bank, John: The Essence of Total Quality Management: Prentice Hall Int., 1992.

3) Oakland, John: Total Quality Management: Nichols Publishing Co, 1989.

4) B. Brocka and S. Brocka: Quality Management: Implementing The Best Ideas Of the Masters: Irwin, Inc., 1992.

5) Total Quality Management: An Overview: By Judith Ann Schlenker: from the World Wide Web: http://www.hrzone.com/topics/tqm.html#early_success#early_success