What is Total Quality Management ?
Total Quality Management (TQM) is a management ideology that focuses upon quality management and is derived from other management theories such as quality circles, strategic planning, etc. Total quality management consists of three words, which are explained below :
1) Total :
The word 'total' in TQM signifies that it is the responsibility of each and every individual of the organisation to continuously regulate and maintain the quality of products and services. It is an all-inclusive mode of handling quality related issues by involving every employee and staff member of the organisation.
2) Quality :
Quality is the degree of customer satisfaction. Organisations identify the demands of their customers by accurately analyzing their needs. This is essential for ascertaining the quality of products required by the customers. Hence, the term 'total quality' signifies the involvement of every employee and staff member towards the accomplishment of set quality standards.
3) Management :
The term 'management under TQM, explains that in order to achieve total quality, continuous improvements should be emphasized or rather than quick changes. Hence, every employee and staff member of an organisation should emphasise upon continuous improvements in quality.
Hence, conjoining all, TQM provides an entire systematic view of quality management. It is a management system that emphasize upon the continuous improvements in qualitative aspects of products and services by involving all employees and workforce. It is most suitable for customer-centric organisations.
Definition of Total Quality Management
According to Professor Leopald S. Vasin, "Total Quality Management is the control of all transformation processes of an organisation to best satisfy customer's needs in the most economical manner".
Total quality management is a management system for a customer focused organisation that involves all employees in continual improvement of all aspects of the organisation.
TQM = Customer-Driven Quality Management
Total quality management is an integrative approach that focuses towards quality improvement by utilizing data, strategy, and effective communication and spreading quality principles in the work culture. TQM is a long-term process, which focuses on achieving customer satisfaction. The employees, workers and staff members of an organisation, with implemented TQM approach, participate in improving the quality of work processes, products and work culture.
Features of Total Quality Management
Total Quality Management Principles / Elements of Total Quality Management are as follows :
1) Customer Satisfaction :
In order to sustain competitive market competition and a higher rank position, a firm has to attain customer satisfaction. For achieving customer satisfaction, firms have to develop and maintain their quality of products, as desired by the customers. For this purpose, they should accurately identify the quality standards of customers and must adopt TQM practices for meeting those quality standards.
2) Leadership :
TQM entails leadership qualities that a top-level executive must possess. Such executives provide active leadership which establishes quality as the core value to be assimilated in the company's ideology.
3) Integrated Activities :
Total Quality Management consists of integrated activities that clearly define the target quality standards. These standards systematically integrated within the company's management structure.
4) Corporate Culture :
TQM establishes corporate culture within which every employee and staff member contributes towards quality improvement.
5) Strengthen · Employee Commitment :
TQM enables companies to significantly focus on employee involvement, teamwork and training. With this, employee commitments strengthened as every employee is committed to work towards quality improvement.
6) Totality :
TQM reflects totality, as it integrates and directs every member of the organisation towards the same direction, i.e., quality improvement.
7) Documentation :
Documentation is the integrated machine-people data that enables TQM within an organisation. With the help of documentation, all the essential information is circulated and distributed among all employees, which certainly helps them in identifying their roles and responsibilities towards quality improvement.
8) Improvements :
TQM focuses upon the improvements in quality activities of a firm that significantly achieves set quality standards and customer satisfaction.
Principles of Total Quality
There are 8 principles of total quality management, which have been described in details in ISO 9000:2005 (Quality management systems fundamentals and vocabulary), and in ISO 9004:2000 (Quality management systems guidelines for performance improvements), they are as following :
1) Customer Focus :
All the business organisations. for their business prospects, rely on their customers, and as such their focus should be primarily on customers' present and future requirements/expectations. Their endeavor should be to at-least meet the customers' present requirements/expectations, and if possible to go beyond that. It calls for their being customer focused. It should be realized by each and everyone in the organisation that the survival of the organisation, and as a corollary to that their survival, largely depends upon the customers level of satisfaction. Salary of the employees, and other perks enjoyed by them, everything is possible because of the satisfied customers, who are the basic source of business (and income) for the organisation. In this connection, the role of internal customers should also not be reduced. It is, therefore, necessary to take care of internal as well as the external customers, with a view to ensuring smooth generation of the business.
2) Leadership :
The leaders of a business organisation play a significant role in determining the unity of purpose and deciding the future direction of the organisation. Leadership is capable of (and it is expected also from them) creating and maintaining appropriate internal circumstances conducive to the people's involvement in accomplishing the objectives of the organisation. It should be the responsibility and commitment of the organisation's leadership, at various hierarchical levels, to ensure sustained advancement of the organisation. There should not be any disparity between the words and deeds of the management. The management need to set an example to be reproduced by other employees of the organisation.
Although, it i difficult to bring about changes as far as the work culture and work habits are concerned, but it is not impossible. With sustainable efforts, the management of an organisation can successfully achieve its objective and the entire scenario may be changed for the betterment Most of the employees are sincere and believe in performing their job with all the seriousness. However, what is required to be done by the management is to extend necessary support in this regard An efficient leadership goes a long way in improving things dramatically in an organisation.
3) Involvement of People/Employee Involvement :
The most treasured asset an organisation may have, is nothing but its human resources. They need to be taken into confidence by the management by ensuring their full involvement in the organisational affairs. The feeling of belongingness, if inculcated properly, may go a long way in realizing their full potential for the benefit of the organisation. Appropriate and timely training imparted to an employee may bring surprising results. However, the management is required to ensure that the services of trained personnel are utilized in the areas in which they have been trained. Only then the objective of providing training's would be achieved by the organisation. Overall performance of each and every employee needs to be measured regularly. especially keeping in view the latest changes brought about in the systems and procedures. The objective evaluation of the employees' performance poses a major challenge before their supervisors, who should have adequate experience and training's in this regard. Appropriate exposure and proper updating in various fields would ensure them to be in full command.
4) Process Approach :
Various activities and resources associated therewith can be best managed as a process, may lead to the desired outcomes. The principles of process approach, if applied exactly, may lead to the following positive results :
- Defining/determining the activities in a methodical manner, which are necessary to be taken, if a particular outcome is sought by an organisation.
- Developing and putting a system in place to fix responsibility and accountability in an explicit manner, for the management of vital activities.
- Analysis and evaluation of the proficiency in respect of the vital activities.
5) System Approach to Management :
System approach to management provides identification. comprehension and management of processes. which are closely related with each other. It Facilitates efficiency and efficacy in actualization of the organisation's desired goals. Application of this approach ensures creation of a system. which proves to be instrumental in :
- Accomplishment of the organisation's cherished objectives in a hassle-free manner.
- Appreciation of the nature of mutual dependence upon each other by various processes.
- Grasping of, in a better manner, the roles and responsibilities of all the concerned, which goes a long way in successfully attaining the common objectives resulting in elimination of cross-functional obstacles.
6) Continual Improvement :
The eternal objective of an organization needs to be its sustained growth and uninterrupted advancement (continual improvement) in its overall performance. The principles of continual improvement, if appropriately applied by an organisation, are bound to develop a stable organisation-wide approach, which leads to sustained improvement in the performance of the organisation.
7) Factual Approach to Decision-Making :
The decisions taken on the strength of reliable data and their in-depth analysis are considered to be the most fruitful and effective one. The principles of 'factual approach to decision making, if appropriately applied by an organisation, ensures the following :
- Necessary data and other relevant information are trustworthy with regard to their accuracy and their flow is in a smooth manner;
- Timely availability of necessary data and relevant information to those who need them (the analysts).
- Meaningful analysis of the data is carried out through the appropriate tools/techniques by the analysts.
8) Mutually Beneficial Supplier Relationships :
An organisation's relationship with its suppliers, though purely business in nature, needs to be based on mutual trust and should be beneficial for both parties. Such an approach with regard to the relationship between the two, enables both of them to create value for each other. Application of the principles of 'mutually beneficial supplier relationship' results in the following positive developments :
- Development of a relationship, which strikes a balance between short-term gains on one hand and long-term considerations on the other.
- Specialization and resources can be shared among-st the business partners.
- Strategic suppliers may be identified and chosen.
- Opening up of transparent and vibrant communication channels.
Elements of TQM
The key elements of total quality management are as follows :
1) Organisational Ethics :
TQM involves organisational ethics which establish a business code of conduct. This code of conduct acts as the guidelines towards achieving the set quality standards by using ethical practices. These ethical codes also help employee to differentiate between right and wrong actions.
2) Integrity :
Integrity refers to the honesty, values, morals, fairness and adherence to sincerity and facts. TQM works under an integrative environment where customers are given what they want to receive.
3) Training :
Training is another element of TQM, which is an important aspect of high productivity. It is the responsibility of managers to implement TQM within their management. levels and provide proper training's to employees and subordinates. Such training's entail TQM ideologies of quality improvement and are usually provided while implementing TQM in the organisation.
4) Teamwork :
Teamwork is essential for the successful implementation of TQM within an organisation. As employees within a team feel more comfortable in giving their ideas and suggestions, teams facilitate in providing quicker and better business solutions to problems and also improve existing managerial activities.
5) Communication :
Communication is the element that binds all other elements of TQM. It also connects the elements of TOM with the organisation. There should be successful communication between organisation and all its employees, customers and suppliers, for a successful implementation of TQM. Managers are responsible for continuously sending/receiving information about TQM and I for maintaining effective communication with their subordinates.
6) Recognition :
Recognition is the final element in TQM, which should be provided to individuals and teams for solutions and achievements. Managers should accurately identify the contributions of every employee towards quality improvement in order to give employees their due recognition's. With recognition's, employees gain confidence, which fosters increased work efforts, productivity and quality.
Importance of Total Quality Management
Importance of total quality management is as follows :
1) Better Employee Relations :
An organisation attains better employee relations and a highly motivated workforce, with the implementation of Total Quality Management. Various key. indicators are used by successful organisations for measuring improvement in employees' job satisfaction, behavior and attitude due to their concentration towards quality improvement. Such indicators include employee satisfaction, employee attendance, employee turnover, safety and health.
2) Improved Operational Performance :
TQM improves the operational performance of the organisation, which can be measured through several operational performance indicators. These measures are used by successful companies to assess the influence of quality improvement on their operational performance. Such measures involve reliability, timeliness of delivery, order-processing time, production errors, product lead-time, inventory turnover, and quality costs.
3) Greater Customer Satisfaction :
Contrary to traditional viewpoint, which entails that right quality is achieved by meeting the technical requirements of the product, companies have now understood that quality is defined by the demands of the customers. Organisations can achieve greater customer satisfaction by offering them what they want, i.e., high quality of products. Such products can be developed through successful implementation of TQM.
4) Increased Financial Performance :
Total Quality Management “significantly increases the financial performance of the company. As higher quality of products are offered to the customers, their demands will be fulfilled, which will ultimately result in higher profits and increased financial performance. Companies assess their financial performance with the help of several measures, which include market share, sales per employee, sales per a comparable retail store, return on assets and return on sales.
5) Creates a Good Corporate Culture :
Under TQM ideology, customer is considered as the ultimate focal point of the organisation, instead of individual departments or business units. Thus, quality improvement becomes important not only for the production department, but for all business units. With this, a good corporate culture is created that focuses on customer satisfaction through quality improvement.
6) Increases Efficiency :
Along with increasing the concentration of every employee towards quality improvement, increasing the process efficiency and productivity of the firm are also among the main functions of TQM. It eliminates work hurdles and misunderstandings by effectively handling critical areas of production.
7) Organisational Development :
TQM is not solely responsible for educating and training employee about the importance of quality, rather, it also helps in eliminating and preventing their mistakes in business activities, which ultimately helps in the development of the organisation.
8) Flexibility :
TQM is not a rigid structure that concentrates on quality improvement, but it helps in developing creative and flexible methods for attaining high quality standards. It also creates departmental teams within different business units that widen the skills and expertise of employees, thereby fostering improved performance and flexibility in business operations.
9) Promotes Supplier Satisfaction :
As Total Quality Management helps in developing communication between organisation and suppliers, it also fosters satisfaction of the suppliers. This will also be useful for the organisation as supplier will provide high quality of raw materials and semi-finished products.
Limitations of Total Quality Management
The Limitations of TQM are as follows :
1) Lack of Top Management Commitment and Vision :
TQM will only be beneficial when it is successfully implemented. However, if it lacks top management's commitment, it cannot be successfully implemented. Often, the top managers fail to visualize the importance of TQM and do not choose to implement it.
2) Resistance to Change :
Resistance to change is the biggest limitation of TQM. Most of the employees and workers stand against TQM implementation in the organisation. They believe that their occupations will be at threat as they may fail to adopt new changes.
3) High Costs :
There are usually high costs associated with the implementation of a TQM programme. Also, the advantages of implementing a TQM will become visible after long period of time. This acts as a big disadvantage.
4) Reduces Morale and Affect Attitude :
For successful implementation of TQM, the mind-set, attitude and behavior of the employees and workforce needs to be changed. This often reduces the morale of employees as they resist changing their way of doing work. This also affects the attitude of employees towards work and certainly hinders their job satisfaction.
5) Company Culture and Management Style :
Implementing TQM means to change company's culture and its management style, which is not an easy task to perform. It takes years to change the culture of an organisation and implementing a new one.
6) Resisting Ideology :
As TQM aims at improving quality to achieve customer satisfaction, it does not signify the end point of the process. Customer demands will never end, making TQM a continuous process. Due to this,' employees will have to make TQM a habit, which is difficult to attain in the current practical business environment.
7) Department Based Thinking and Actions :
For successful implementation of TQM, organisations have to leave department-wise 'thinking strategy and must direct whole organisation towards quality improvement. This is often not feasible in many companies with different and customized organisational structures.
8) Poor Appreciation of TQM :
Many companies do not appreciate the concepts and principles of TQM, by considering solely on its drawbacks. This creates a negative psychology towards TQM system, which is forwarded to other companies as well.
9) Lack of Structure for TQM Activities :
Despite of training given to employees about Total Quality Management practices, it cannot be properly taught. These practices can be learned only through experiences. Moreover, training programmes of TQM are not as effective as they should be. This also restricts successful implementation of TQM within an organisation.
10) Deciding How to Start :
TQM activities are difficult to start. It is a continuous process without a starting or ending point. Most of the companies waste their time and resources in figuring out "how and where to start" total quality management.