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The Concept & Principles of Total Quality Management

written by: ciel s cantoria • edited by: Michele McDonough • updated: 3/30/2011

The principles of Total Quality Management often receive greater attention during times of stiff competition. This was noted as we looked back at the historical circumstances surrounding the advent of TQM, to which business focus is directed toward quality based on customer requirements.

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    A Look at Total Quality Management, Then and Now

    Consumer confidence average Jan 2009 

    The concept and principles of Total Quality Management (TQM) came into the foreground back in 1988. This was the time that the U.S. government came up with the Malcolm Baldrige National Quality Award. Companies were being encouraged to adopt a business model, centered on business productivity without having to sacrifice quality.

    This was the era when the trade export-import balance between U.S. and Japan had shifted in Japan’s favor. Although a series of U.S. countermeasures were being undertaken, trade friction and rifts took place in the international market. Some U.S. courts had even made rulings that sided with charges of unfair trade practices against Japanese companies for selling Japanese products below costs in the U.S.

    However, when Motorola became the first recipient of the Malcolm Baldrige Award in 1988, the company’s success was supported by the attainment of about $2.2 billion savings in costs. American companies stopped harping against their Japanese counterparts, and finally started focusing their attention on the concept of TQM.

    W. Edwards Deming, known as the Father of Total Quality Management was one of Japan’s main guiding forces in improving industrial performance. This was in the 1950s when Deming’s teachings were initially scoffed at by American manufacturers. However, as the events in history unfolded, TQM became an all important discipline by the mid-1980s. On the other hand, the Motorola Company responded to the honor of being the first recipient of Malcolm Baldrige Award by spawning their Deming-inspired business management into a system of learning known as the Six Sigma.

    Today, the concept and principles of Total Quality Management are getting more attention than ever, in order to meet the challenges of global competition. However, the Chairman of the Malcolm Baldrige Award gives emphasis that their purpose is not just to give out awards, but to focus on business models. The objective is to encourage the adoption and use of business tools and processes to achieve goals based on the principles of TQM.

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    The Concept and Principles of Total Quality Management

    638px-Quality model (inverted) 

    The concept of TQM is about indoctrinating business productivity and customer satisfaction by harnessing information and human resource efficiency; the results of which, will lead to the creation of more jobs and the strengthening of the economy as a whole. It utilizes a systematic approach of managing processes and people, to generate outputs with zero defects in order to ensure 100% customer satisfaction

    This discipline can be achieved by adhering to the following key principles of Total Quality Management:

    1. Customer-Focused Quality Management

    A reference to quality must be based on the customers’ real requirements in a way that the product will bring about improvement in their condition, health, outlook or overall well-being.

    The Quality Model is one approach where the business processes make use of the Statistical Process Chart (SPC), Statistical Quality Control (SQC), and the Juran Trilogy of Quality Planning, Implementation and Improvement.

    This type of approach requires careful research and understanding of customer requirements and it becomes the business goal in every product launched. As such, the effectiveness of the product to successfully meet the customer’s purpose becomes an essential factor to consider. Every task or function performed during the development and manufacture of the product will be guided by customer specifications.

    Please proceed to the next page for more on the discussion of the principles of TQM.

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    The Principles of Total Quality Management: Factual Basis, Systematic and Process Approach and People InvolvementUnderstand the principles of Total Quality Management, which promotes the use of factual basis and statistical analysis for decision making. Read overviews about systematic and process approach in managing tasks and functions that can maximize costs but can produce zero defects. Find out how people involvement can seal customer satisfaction as part of the Total Quality Management discipline.
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    The Concept and Principles of Total Quality Management (continued)

    Brand Quality in 2010 by Infrequency of Trouble-Prone Models 

    2. Factual Bases for Decision Making

    In order to adhere to this principle, it is important to document the Business Process Structure using Process Flowcharts, Data Flow Diagrams and Entity Relationship Diagrams. If a new business process is involved, there are the To-Be Process Maps and the Role-and-Responsibilities Chart.

    It is quite important that these tools clearly identify the activities performed within a specific business process, by depicting the related actions, their inputs, the sequencing and the methods required as well as the time limit observed to perform a specific task.

    Total Quality Management is about leading the workforce to perform better, first and foremost of which, is by providing training programs that will drive out the fear of incompetence. TQM advocates instilling self-confidence that will empower the people to do the job right, at first attempt.

    Employee guidelines are based on the satisfaction and delight derived by the internal and external customers of the product. A reference to internal customer denotes those who will evaluate, test, resell, promote or endorse the finished goods before they become available to the external customer. The former’s satisfaction is important before the product is allowed to reach the external customer. Keep in mind that in TQM, the aim is to garner 100% customer satisfaction by supplying zero-defect deliverables.

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    3) Process Approach in Achieving Quality

    Six Sigma fundamentals are basically designed to change a corporation's framework of processes as they are utilized for generating profits. The initiatives are toward streamlining activities that are focused on continuously improving the quality of the finished products -- by eliminating errors and mistakes that lead to product defects.

    The Six Sigma Breakthrough Strategy is described as “a disciplined method of using extremely rigorous data-gathering and statistical analysis to pinpoint sources of errors and ways of eliminating them”. In so doing, management can make the right decisions by knowing what they don’t know, so they can do what they could not do before, by measuring those that have a total effect of adding or reducing value to the product. Errors, if any, are measured at a defect level of 3.4 defects per million opportunities.

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    Three white soldiers 

    4) People Involvement to Develop, Maintain and Sustain Quality.

    This principle is tied to the concept of impressing pride and ownership in the minds of employees. Job trainings are merely instructional mechanics on how to perform one’s duties but the manner of carrying them out as a day-to-day activity should be less of a robotic function.

    Behavioral aspects like attention to details, safety-consciousness, tenacity, perseverance and the like, are necessary to achieve zero defects. However, ownership attitude in performing job functions should be on a broader scale and not only in the aspect of manufacturing processes. Frontline employees and their courtesy, efficiency, competency, agility and quick-thinking ability, are examples of ownership attitude integrated with their personalities.

    Since this principle is expected to heighten customer satisfaction that spells more cost savings and more profits, employees are entitled to their share of the earnings. That is, by way of regular compensation for performing their individual function and additionally, by way of bonuses, incentives, rewards, recognition and celebrations.

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    5) Systematic Approach in Managing Processes and Problems

    Any inconsistency or variable must not be allowed to break into the system, since this will trigger a continuous succession of events that will lead to greater errors. By recognizing that the business process structure is a system of interrelated functions and activities, addressing a problem involves identifying and managing the flaws and investigating the critical points from where it all started.

    The Plan-Do-Check-Act two cycle process includes problem finding as a sub-set of the "Do" step. A simple example is maintenance, which is one way to fix problems. However, timely replacement of parts that have shown wear and tear, prevents lags, skips, snags and untimely breakdowns.

    Please proceed to the next page for more of our explanations about the principles of Total Quality Management.

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    The Principles of Total Quality Management- Measure & Control of Quality, Continuous Improvement and Quality GoalsExplanations about the principles of Total Quality Management continue on this page, and they pertain to guiding tenets in maintaining and controlling quality that allows continuous improvements in manufacturing products or in rendering services. Adopting methods in planning for quality goals should always take into consideration the customers' requirements to succeed in achieving 100% satisfaction.
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    6) Measure and Control Quality

    Although there are tools and metric systems to measure quality, the matter of determining the quality of the product is best matched by data research on customer satisfaction. Customer Satisfaction Metrics are by way of customer surveys, which can distinguish the degrees of satisfaction and its impact on sales performance. A survey result of a customer with a 6 point scale results may have an equivalent indication that this type of customer also have the likeliest potential to patronize other products being offered by the business.

    Aspects of quality measurement relate to the entire satisfaction in terms of pricing, speed and quality of delivery or service, the trust and reliance of the customer on the manufacturer’s performance and how closely the products are related to the needs of the targeted market.

    This goes hand in hand with Customer Service Management, as a related system in place where the employees are well-trained and well-placed by experiencing benefits and advantages through rewards, incentives and recognition. This also deals with supply chain management and methods of addressing customer complaints, suggestions and feedback.

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    7) Continuous Quality Improvements .

    Adhering to this principle requires constancy of purpose and commitment in providing 100% customer satisfaction. The objectives of continuous improvement are set to achieve long-term goals, and as such, require careful planning.

    There should be a method in place as well as data research and analysis if the value added to the product still meets the requirement of the customer and if the customer will in turn be willing to pay additional for the improvement.

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    8) Quality Goal Setting Based on Customer Requirements

    Setting of goals should always be aimed at meeting customer requirements, their needs, their purposes and the benefits which they consider as worth the price. They should be based on strategic quality goals by taking into consideration the technology used for manufacturing the product and its ability to meet customer specifications.

    Historical circumstances are likewise factors to consider when setting quality goals by taking into account the products’ past performance records, the processes involved and if the benchmark standards were met.

    Benchmarking should also deal with the quality improvements that have been achieved by the competitors in order to set goals that may be ambitious but have been assessed as practical to achieve. The matter of producibility is important particularly in considering the available resources of the organization.

    In achieving quality improvements, the value of the output should also be in proportion to the targeted consumers’ ability to pay the additional price.

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    Summary

    In summarizing the explanations about the concept and principles of Total Quality Management, the entire business process is geared towards a combination of achieving customer satisfaction through effective leadership plus management of processes and the human resources. Continuous improvements on the other hand are focused on the processes and methodologies to support the jobs and functional performances that produce quality consumer goods.

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    Reference Materials and Image Credit Section:

    References:

    • Total quality management (TQM)-- The Chartered Quality Institute lifted from http://www.thecqi.org/Knowledge-Hub/Resources/Factsheets/Total-quality-management/
    • Historical Encyclopedia of American Business- Japanese Trade with the United States Edited by: Wilson, Richard L. University of Tennessee, Chattanooga published by Salem Press: lifted from http://salempress.com/store/samples/american_business/american_business_japanese.htm

    Image Credits: