“Total Quality Management (TQM) is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services. The goal is customer satisfaction.”(Omachonu, Ross, Swift; 3.) TQM has become the basic practice in businesses though-out the world.
“Implementation of TQM in these organizations has been driven by the desire to increase profits in the highly competitive business world. Total Quality Management techniques are designed to improve performance,”(Raibon, Payne; 963.) and inevitably resulting in increased profits.
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During the early 1980s companies started to adopt the process of TQM. The customers were not satisfied with the quality of the products. Many believed that Total Quality Management was a solution to the company’s problems. Most companies adopted the rules but didn’t apply them; they had lost sight of the larger concerns, for customer value and satisfaction. “As a result, many TQM programs begun in the 1980s failed to cause a backlash against TQM.” (Kotler, Armstong; 681.) But the principles stayed the same, and the companies knew that these functions were needed for success.
To fully utilize TQM the brainpower of each and every employee must be used. “It is the systematic elimination of waste and rework created by imperfect processes’… ‘It is an understanding that all an organization’s efforts are part of a system, and that you cannot change one part of the system without affecting the other part.” (Schultz, Vollum; ix.) In implementing a Total Quality Management system there are many different beliefs, The Fourteen Point way formulated by Dr. Deming is just one of many but it is believed that these fundamental points should not be ignored.
1.) “Create constancy of purpose toward the improvement of product and service,
with the aim to become competitive, stay in business, and provide jobs.
2.) Adopt the philosophy. We are in a new economic age. Western management must awaken to the challenge, learn its responsibilities, and take on leadership for change.
3.) Cease dependence on inspection to achieve quality. Eliminate the need for mass inspection by building quality into the product in the first place.
4.) End the practice of awarding business on the basis of price tag alone. Instead, minimize total cost. Move toward a single supplier for any one item, on a long term relationship of loyalty and trust.
5.) Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
6.) Institute training on the job.
7.) Institute leadership. The aim of leadership should be to help people and machines and gadgets do a better job. Leadership of management is in need of overhaul, as well as leadership of production workers.
8.) Drive out fear, so that everyone may work effectively for the organization.
9.) Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems in producing and using the product or service.
10) Eliminate slogans, exhortations, and targets for the workforce asking zero defects and new levels of productivity.
11) a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
12) a. Remove barriers that rob hourly workers of their right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
b. Remove barriers that rob people in management and engineering of their right to pride of workmanship. This means, among other things, abolishment of the annual or merit rating and of management by objective, management by the numbers.
13) Institute a vigorous program of education and self-improvement.
14) Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.”(Persico; 163-164.)
Through Total Quality Management is a continually evolving idea, the principal goal is to deliver value to the customers. Every activity within an organization should contribute in the end to the strategic objective of satisfying customers.
In any company a change costs money. “Because any action means change and change means additional/money or resources, a cost/benefit analysis needs to be performed.
The cost-benefit analysis should take into account both tangible and intangible benefits. A cost/benefit analysis ensures that the preventative action to be improved does not cost more than just leaving the problem alone.” (Swift, Ross, Omachonu; 317.)
A benchmark needs to be set by identifying the cost and risks connected with each processing requirement. “The risk of what would happen if nothing is done versus the risk of change must be considered.” (Woodall, Rebuck, Voehl; 210.) Therefore a cost analysis and continuous improvements are consistent with TQM philosophy. These techniques help managers to maintain a higher quality product or service to their customers at a cheaper cost.
Total Quality Management principles remain a requirement for success. “Organizations are made up of a complex system of customers and suppliers, with every individual executive, manager, and worker functioning as both a supplier and a customer.” (Finnigan, Schmidt; 5.)
Although many firms don’t use the TQM label any more, for most top companies customer-driven quality has become a way of doing business. “They apply the notion of Return on Quality (ROC) and they make certain that the quality they offer is the quality that customers want.” (Kotler, Armstong; 681.) This quality then results in what every company wants, improved sales and higher profits.
Finnigan, J. and Schmidt, W.: 1993, ‘TQM Manager: A practical guide for managing in a Total Quality Organization.’
Weaver, Charles.: 1991, ‘TQM: A Step-by-Step guide to implementation.’
Swift, J.; Ross, J.; Omachonu, V.: 1998, ‘Principles of Total Quality 2nd Edition.’
Cortada, J.: 1993, ‘TQM for Sales and Marketing Management.’
Albright, Hill, Ingram.: 2001, ‘Managerial Accounting: Information for Decisions 2nd Edition.’
Persico, J.: 1992, ‘The TQM Transformation: A Model For Organizational Change.’
Woodall, Rebuck, Voehl.: 1997, ‘Total Quality in: Information Systems and Technology.’
Kotler, Armstorng.: 2001, ‘Principles of Marketing 9th Edition.’
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