Operations

Total quality management

Total quality management (TQM) is an integrated set of principles and tools for helping organisations to become more efficient in everything they do

Total quality management (TQM) is a set of principles and tools that help organizations become more efficient in everything they do. It is based on the idea that investing in front-line employees' problem-solving skills will result in a return on investment – specifically, higher-quality and lower-cost products. TQM was developed in the manufacturing industry, but it can be applied to many different aspects of business.

When to use it

● To improve the quality and productivity of your company's operations.
● To provide your employees with more skills and responsibility.

Origins

The Western Electric Company's Hawthorne Works began using statistical quality control in its operations in the 1920s. Real progress was not made until 1950, when the American government dispatched quality expert W. Edwards Deming to Japan. He advised the Japanese Union of Scientists and Engineers (JUSE) on reconstruction and quality issues. Deming explained the causes of quality variations in terms of both statistical control methods and the'soft' aspects of involving workers in helping to make improvements. Because of his success, other quality experts, such as Joseph Juran and Philip Crosby, spent a lot of time in Japan in the 1950s.

Toyota was the most visible advocate of quality manufacturing practices. It became the undisputed leader in automobile production by combining these techniques with its 'just-in-time' production process. Toyota comprehensively implemented quality management principles in the early 1960s. The concept of 'Kaizen,' in which employees were expected to make continuous incremental improvements in how the manufacturing process was conducted, and 'quality circles,' which were regular meetings of employees in which quality problems were discussed and solutions suggested, were two important elements of this model.

Toyota's and other Japanese companies' success, such as Matsushita and Honda, helped to spread the word about TQM, resulting in the establishment of various quality awards (such as the Baldridge Award) and the introduction of International Standards Organization (ISO) certification in the 1990s. Organizations used ISO certification, particularly ISO 9000, to demonstrate that they met important quality standards.

TQM is one of many acronyms used to describe quality-focused management systems. CQI (continuous quality improvement), SQC (statistical quality control), QFD (quality function deployment), QIDW (quality in daily work), and TQC are some other acronyms (total quality control).

What it is

Total quality management is a systematic management approach that necessitates employees' commitment to continuous improvement. While it began as a method of improving manufacturing processes, it is now used in a variety of business settings. It functions as both a management 'philosophy' and a set of specific tools and techniques. Its fundamental principles are as follows:

● Customer-focused: The customer determines the level of quality for which he or she is willing to pay.
● Total employee involvement: Employees contribute to the achievement of common goals. Their commitment can only be obtained after the fear of the workplace has been removed, so that they feel secure enough to challenge and improve the system.
● Process-centered: All work is composed of processes, which are a series of steps that take inputs and transform them into outputs that are delivered to customers. If you want to improve performance, you should concentrate on the process.

● Integrated system: TQM focuses on the horizontal processes that connect these functions, despite the fact that a firm may have many different functional specialties. Understanding these processes and how they interact is critical to the TQM methodology.
● Continuous improvement: Employees are expected to take responsibility for identifying and resolving inefficiencies. This is a continuous process, not something that occurs only in response to problems or crises.
● Fact-based decision making: Corrections are made based on hard data rather than gut instinct. TQM requires a company to constantly collect and analyze data in order to improve decision-making accuracy.
● Communication: Effective communication is critical to maintaining morale and motivating employees at all levels.

How to use it

To a large extent, the principles outlined above appear to be common sense. Indeed, the 'quality' revolution has been so successful that its principles are now discussed in most large corporations. The real challenge with TQM is implementation, because while many firms talk about these principles, only a minority of firms actually follow them in a disciplined manner. For example, despite the fact that Toyota's quality-based management approach has been widely studied for nearly 50 years, most Western automobile companies have only recently 'caught up' with Toyota in terms of production quality and efficiency.

There is no single model for implementing a TQM system because each firm is unique in terms of culture, management practices, and business processes. However, the basic approach looks something like this.

First, senior executives must learn about and commit to TQM as a way of working. They decide which parts of the organization will be prioritized (for example, the manufacturing operation) and define the core principles to be followed. On this basis, a "master plan" is established.

A project team is then formed within the focal area to map the critical processes by which the firm meets the needs of its customers. Each process is then monitored, and team members collaborate with front-line employees to identify ways to improve them. This usually necessitates a lot of detailed work, and training is frequently required to help people working in these processes understand the techniques used.

Progress is evaluated on an ongoing basis, and it is common for quite a bit of work to be done to ensure full buy-in to the change process – for example, by using a reward/recognition system.

Top practical tip

Despite its widespread use, many businesses have struggled to implement TQM effectively, and some have even failed. There are two main reasons for the difficulties. To begin, TQM is based on the belief that front-line employees are sufficiently responsible and intelligent to be given responsibility for making improvements. This belief contradicts Western management's traditional command-and-control philosophy, necessitating a behavioral shift among senior executives that not all are prepared for.

Second, TQM is a highly integrated and systematic management approach. It necessitates the careful collection of data, analysis, and diagnosis, which results in a plan for corrective action that must be diligently followed. This structured approach does not work for everyone, and it is made even more difficult by the fact that the business world is changing quickly and executive attention is fleeting.

Top pitfall

The most important aspect of TQM is that it is intended to improve efficiency, which means cutting costs and improving quality in response to an existing set of customer needs. TQM is far less useful as a means of increasing effectiveness, which is concerned with understanding and responding quickly to changing customer needs. TQM is thus most applicable in relatively stable industries, such as the automobile industry in the 1980s and 1990s, where the winning firms were those that implemented their existing strategy as efficiently as possible. It is much less common in volatile industries such as telecommunications or pharmaceuticals, where success is based on innovation and agility.

Some attempts have been made to apply TQM principles to the innovation process, but this is a risky proposition that should be avoided. This is because TQM is all about removing'slack' from the system, whereas innovation necessitates some slack time for people to experiment with new ideas without anyone looking over their shoulders.