Understanding Total Quality Management

By Ranjit Singh Malhi, Ph.D.

In an increasingly globalized and highly competitive business world, more and more companies are seeking competitive advantage by providing higher quality products and services which meet or exceed customer requirements at minimum cost. With regard to the public sector, governmental organizations need to provide higher quality services to meet the increasing expectations of the citizenry. Most organizations that have been successful with their quality improvement efforts have adopted an integrated approach commonly referred to as Total Quality Management.

High Self EsteemWhat is Total Quality Management?

Total Quality Management (TQM) is the systematic and integrated approach of attaining customer satisfaction at minimum cost through continuous improvements in all areas of an organization’s operations, products and services. According to M. Sashkin and K. J. Kiser, TQM means that the organization’s culture is defined by and supports the constant attainment of customer satisfaction through an integrated system of tools, techniques and training. This involves the continuous improvement of organizational processes, resulting in high quality products and services.1

The main features of TQM are: 

  • Customer-oriented. TQM focuses on customer satisfaction through creation of better quality products and services at lower costs.
  • Employee involvement and empowerment. Teams focus on quality improvement projects and employees are empowered to serve customers well.
  • Organization-wide. TQM involves every department or division.
  • Continuous improvement. Quality improvement is a never-ending journey.
  • Strategic focus. Quality is viewed as a strategic, competitive weapon.
  • Process management. TQM adopts the concept of prevention through process management.
  • Change in corporate culture. TQM involves the creation of a work culture that is conducive to quality improvement.

Who is a Customer?

In the context of quality management, a customer can be defined as the recipient of one’s product, service or information. There are two types of customers: external customers and internal customers. An external customer is the ultimate receiver of the product or service. He or she is not a member of the organization that produces the product or service. A good example of an external customer is the consumer or client that purchases the product or service. An internal customer is the next person or stage in producing the final product or service. He is a member of the organization that produces the product or service. For a worker on the production line, the person after him in the line is his internal customer. For a typist, the superior officer is the internal customer.

Benefits of TQM

Research shows that the Malcolm Baldrige National quality award winners outperformed the S&P 500 by greater than 4-to-1, achieving a 248.7% return on investment, compared with 58.5% for the S&P 500.2

TQM has numerous benefits. It enables organizations to:

  • attain higher profitability and increased market share
  • improve customer satisfaction
  • improve organizational productivity
  • improve employee morale and job satisfaction
  • create a positive work culture
  • undertake systematic problem solving and decision making through project teams
  • improve teamwork
  • create a climate conducive to continuous improvement

Fifteen Maxims on Quality Improvement

  1. Top management’s visible commitment and explicit involvement. Without top management’s visible commitment and explicit involvement, quality improvement efforts will never be successful. A U.S. General Accounting Office study concluded, “Ultimately, strong visionary leaders are the most important element of a quality management approach.3 Top management holds the key to quality improvement as it determines the various systems in which people work. According to W. Edwards Deming, management is responsible for as much as 94% of a company’s quality problems.4 Joseph M. Juran puts the figure as 85% or more.5 Moreover, the actions of employees greatly depend on top management’s attitude towards quality. 

  2. Strategic Quality Planning. A Strategic Quality Plan is absolutely vital for an organization to develop competitive advantage and effectively manage organizational quality improvement efforts. It sets the organizational mission statement, specifies key quality goals, promotes collective action and determines the strategies of how the organization is going to attain its mission and quality goals. 

  3. Organizational quality awareness. Organizational quality awareness is necessary to gain employee support for quality improvement efforts and reducing potential resistance to change. All employees must fully understand the need for quality improvement, how quality relates to their jobs and how it can be measured and improved. Many quality improvement efforts have failed in the past due to neglect of organizational quality awareness programmes. Numerous organizations made the mistake of plunging directly into quality improvement efforts. 

  4. Quality through people. Quality begins and ends with the individual. Quality people do quality work. People manage processes and make the systems work; processes don’t do work, people do. In short, quality is the expression of human excellence.6 Quality improvement efforts should focus more on people rather than on techniques and machines. Management must have faith in the ability of employees to produce quality work. Employees must be given the opportunity to realize their full potential through training, participation and empowerment. 

  5. A Culture of Quality. Successful organizations have a culture that creates and sustains a work environment that is conducive to long-lasting quality improvement. Quality is deeply embedded in virtually every aspect of organizational life. Culture is important as it influences employee behaviour and action towards work, customers and one another. Satisfied employees help to create satisfied external customers. Some of the core values of a Culture of Quality are customer focus, employee autonomy, teamwork, open and honest communication, basing rewards on quality work and Doing the right things right the first time, every time. 

  6. Quality management structure. A suitable organizational structure is necessary to ensure effective and efficient management of quality improvement efforts. The quality management structure would depend upon the size of the organization and the nature of its business. However, most successful organizations have a Corporate Quality Council consisting of the top management team, a TQM Manager and Divisional Quality Councils. The major responsibilities of the Corporate Quality Council are to set an overall strategic quality improvement plan for the company, review and approve divisional quality improvement plans and cooperation and monitor quality improvement efforts. The TQM Manager assists the Corporate Quality Council in planning and implementing organization-wide quality improvement efforts. The Divisional Quality Councils set specific quality goals, formulate plans of action and implement quality improvement efforts at the divisional level. 

  7. Customer-driven. Quality is defined and judged by the customers. The mission of quality organizations is centred around customer satisfaction. Organizational processes and procedures are designed to meet the requirements of both the external and internal customers. Market research must be undertaken to determine the requirements of external customers, how well is the organization meeting them and what are the areas for improvement as perceived by the customers. Customers complaints should be tracked and acted upon promptly. With regard to the internal customers, employee opinion surveys should be undertaken to determine, inter alia, their views on how the organization is run and how can quality be improved.

  8. Process Management. Long-lasting quality improvement is attained through preventive management (building quality into the work processes, particularly key processes). All work ranging from administrative to engineering is a process. A process is essentially a sequence of tasks or activities that transforms inputs into desired outputs. A. R. Tenner and I. J. DeToro define a process as “the sequential integration of people, materials, methods and machines in an environment to produce value-added outputs for customers.”7 Process management stresses conformance to customers’ requirements and reduction in cost of quality by producing output in the most effective and efficient manner. 

  9. Teamwork. Teamwork is vital as the success of quality improvement efforts is greatly dependent on close cooperation between managers and employees and among departments. Teamwork generally enhances the quality of decision-making; helps to break down departmental barriers; and creates a sense of ownership and commitment. Teamwork can be encouraged by creating cross-functional Quality Improvement Teams. 

  10. Management by Fact. TQM involves systematic and fact-based decision making. Facts or reliable data and not opinions or hearsay form the basis of making intelligent decisions or solving problems systematically. 

  11. Training. A TQM organization is a learning organization. Training is viewed as a valuable investment and not as an unnecessary expense. Companies noted for world-class quality typically devote 40-80 hours per year, per person to training.8 Training sessions must start with top management and cascade down the organization. Training should be related to actual work performed by employees. Managers should train their own work groups. Quality training should cover quality awareness, basic quality concepts and tools, process management, problem solving, and team building. 

  12. Reward and recognition systems. The reward and recognition systems must be aligned with quality improvement efforts. Recognition and rewards must be based on quality work and not on seniority or other non-merit factors. Examples of recognition and rewards are bonuses, merit certificates and pay increase. Quality success stories should be publicised. 

  13. Quality standards. Quality standards are important as they help to clarify work roles, communicate priorities and form the benchmark for assessing and rewarding employee performance. In short, what gets measured gets done. Quality standards can be set in terms of reliability, responsiveness and courtesy of frontline employees. Quality standards should be customer-oriented, specific and verifiable, realistic and challenging, and mutually established and agreed upon by management and employees. 

  14. Measurement. Measurement is a prerequisite to any quality improvement effort. Quality is defined as “meeting or exceeding customers’ requirements consistently”. These requirements have to be quantified and measured to determine the success of quality improvement efforts. Measurement provides a data base for decision-making, establishing customers’ requirements, identifying opportunities for quality improvement, and assessing performance. 

  15. Continuous improvement. Quality is a moving target. There is no one best or optimum level of quality. Companies have to continuously improve the quality of their products and services to stay ahead in an increasingly competitive business world. Technological changes often render current “quality” products as obsolete. Customer expectations often change over time. Hence, quality improvement is a never-ending journey. In this regard, the organizational work climate should promote employee creativity, and problems viewed as opportunities for improvement.

Notes

1. See M. Saskin and K. J. Kiser, Putting Total Quality Management to Work (San Francisco : Berret-Koehler, 1993), p. 39. 
2. Cited in David N. Griffiths, “Total Quality Management”, Indianapolis Business Journal, Vol. 19 Issue 21, 10 August 1998, p.     12A. 
3. Cited in Joel E. Ross, Total Quality Management: Text, Cases and Readings (London: Kogan Page, 1994), p. 34. 
4. Cited in John Bank, The Essence of Total Quality Management (London: Prentice Hall, 1992), p.73. 
5. Cited in Neil H. Snyder, James J. Dowd, Jr., and Dianne Morse Houghton, Vision, Values and Courage: Leadership for Quality     Management (New York: The Free Press, 1994), p. 36. 
6. See Ranjit Singh Malhi, Enhancing Personal Quality: Empowering Yourself to Attain Peak Performance at Work (Kuala Lumpur:      TQM Consultants Sdn. Bhd., 2008), p. 5. 
7. Arthur R. Tenner and Irving J. DeToro, Total Quality Management: The Three Steps to Continuous Improvement (Reading,      Massachusetts: Addison-Wesley, 1992), p. 98. 8. See Jay W. Speechler, Managing Quality in America’s Most Admired      Companies (San Francisco: Berret-Koehler, 1993), p. 18. 


 

Copyright 2019 TQM Consultants Sdn. Bhd.

Empowering Individuals and Organizations to Excel

Tel: +6012-3350555

E-mail : ranjit@tqm.com.my

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