Total Quality Management - An Extensive Explanation

Introduction

The primary objective of any organisation is survival. Survival in the industrial context means delivering products that satisfy the required Quality, Quantity and schedule. Organisations have been widely implementing the TQM (Total Quality Management) methodology to ensure that their products meet the set quality standards.

The TQM method of management begins and ends with the customer. It is purely a customer- oriented method of management. TQM mainly focuses on ensuring employee participation in solving problems to help a steady improvement the organisation. Employee participation is however cross- functional and extends beyond the hierarchical limits.

TQM deals with concepts like product quality, process control, quality assurance and quality improvement. In other words it controls all transformation processes of an organisation, which are aimed at satisfying customers needs to the best in a cost effective way. TQM owes its success to internal or self control policy in each of the units of the work system.

Internal control help push the problem solving and decision making functions down the hierarchical levels in an organisation. As such, people who work on the product being processed can adopt corrective measures immediately if needed. This helps the organisation to respond to its customers’ needs quickly and efficiently.

However, experts have different versions of applying TQM effectively to their organisations. For some, quality management is driven by the need to ensure customer satisfaction. For others it’s the internal productivity or cost improvement programme . TQM is also viewed as methods that introduce participative management.

Japanese organisations focus on customer satisfaction to effectively apply TQM programmes. Americans, on the other hand focus on cost related issues like ‘cost of non-conference’ and on the need for employees to meet pre-established requirements for each process. These efforts are based on the wrong assumption that processes that help realise the quality standards are fully understood. However, exercising control over production process do not help organisations to expand their market share unless the products meet customer requirements.

What are Quality Improvement and Quality Assurance programmes?

Is there not a marked difference between meeting organisations pre-established standards and meeting customer expectations? Quality assurance helps to realise organisations pre-established standards, while quality improvement helps to meet customer expectations. Therefore, quality assurance and quality improvement are two different aspects of TQM and should not be equated to each other.

Quality assurance comprises all those activities, which are designed to make the production process more efficient so that the organisation meets its pre -set standards. It also guarantees the customer good quality by measuring the product against process and performance specifications.

Quality improvement aims at increasing the effectiveness and efficiency of processes to meet customer expectations. This entails better understanding of the market, innovating the products and processes, managing and distributing material and finished products and providing good customer service. For quality improvement to be successful every member of the organisation should have a clear understanding of customer requirements. To maintain this understanding there has to be a constant interaction with the customer and measurement of product against his expectations.

Quality - Before and After implementing TQM

The late 1970’s and mid 1980’s witnessed a steep fall in U.S businesses. Companies were striving hard to survive frequent recessions, deregulation, trade deficits, low productivity, downsizing and increasing consumer expectations. For instance, Ford Motor Company incurred a loss of about $3.3 billion between 1980-82. Xerox, the leading paper copier saw a slump in its market share, which dropped from 93% in 1971 to 40% in 1981.

The key to success lay in paying attention to quality to tide over all these problems. TQM was the need of the hour. Though TQM concepts originated from the works of an American statistician, the American industry did not pay heed to his suggestions. This was because the American industry was unchallenged in the global market.

The Japanese industry on the contrary was in dire strides owing to a dubious reputation for poor quality. Therefore, they started implementing the TQM concepts. Prior to implementing TQM, it is essential that the organisations first know what their customers want. The organisations have to accordingly redesign their products and production processes and improve the quality of their products.

TQM set a new trend in the Japanese industry by shifting the management’s focus from profits to quality. TQM also brought about a scientific approach for employees to control and improve their work processes. With the new scientific approach the required data is collected by scientific tools and methods based on which the decisions for improving the products and work processes are taken. TQM focuses on collective action of employees to produce high quality products satisfying customer requirements.

TQM eliminates the drawbacks of traditional model of management by objectives where the organisation’s objectives are expressed in numerical terms. In the traditional model, each manager has a certain work statement or a quota to meet on a timely basis. The managers and supervisors were compelled to focus more on completing their work quota than on the quality of work done. Consequently, the actual purpose of the work is cornered, overshadowing the concern for customers and the organisation.

TQM brings in a complete transformation in the role of the workers and managers. TQM emphasises more on the quality of output rather than on quantity of output. As such, the managers and workers are not bound to achieve their work quotas. Instead they apply their expertise in work processes to foresee and eliminate the problems that come their way to produce quality products satisfying the customers’ requirements.

Adopting TQM concepts helped the Japanese industry to increase the demand for its products throughout the world. More striking - TQM showed results much earlier than what was predicted by market experts.

TQM successes:

Culture shift in U.S businesses:

Within four years of implementing TQM concepts, the Japanese industry gained a major share in most of the markets. This led to a quality movement in U.S, wherein there was a major shift in business cultures and operations.

The traditional business culture in U.S was characterised by a concept of individual participation and responsibility. People were considered to be the source and solution to all business problems. Each individual was held accountable for products quality. Therefore, companies believed that giving the right kind of training to employees will help to increase companies’ chances of survival.

However, in the new quality control culture, effectiveness of systems in the company is considered essential for the survival of the company. The 85/15 Rule in quality management states that about 85% of organisational problems are due to system failures. In other words the rule suggests that employees are responsible to only a few organisational problems. The systems are considered to be accountable for the product’s quality. This marks the change between the two business cultures in U.S.

Another difference between both the business cultures is that the traditional culture follows management-by-objectives (MBO) method for controlling the business operations. The quality culture on the other hand shifts the focus from internal results to customer expectations and quality of output.

However, just installing a quality assurance system cannot ensure employee commitment to quality, so crucial for TQMs success. This is because when the desired quality is achieved workers feel that they understand the process completely. They make no efforts to improve their effectiveness to match the changing customers’ expectations and market demands.

Therefore, it is essential to get the top management and workers to commit themselves for implementing Employee Involvement (EI) systems. This commitment might call for a change in attitudes and management of changes in the company.

Organisational structure:

Processes and Systems: An organisation is a combination of systems that are designed to meet customer expectations. Examples of systems are compensation in HR processes and accounting in finance processes. These systems have interlinked processes and tasks. Tasks are a series of related steps. A group of related tasks to produce an outcome is called a process. A series of related processes form a system.

Customers and suppliers: In any organisation there are both internal and external customers and suppliers. Suppliers are people who provide input to the steps in a process while people who use products or services are called customers. Employees in one phase of work process act as customers to those employees who produce the goods used by them. For instance, sales employees are customers of marketing research employees. That is each employee is a customer of the preceding employee. External suppliers are people who sell materials and services, which employees use in their work processes. An external customer is one who purchases a product or service from the organisation.

Quality: The quality movement is entirely customer oriented. Customers are the people who can tell what they want and how they want it. The quality of output from a process depends on the quality of input to the process. It is therefore necessary to improve quality levels in each step, process and system to affect the overall quality of the product. This entails collaborative efforts between internal and external suppliers and proper communication between internal and external customers.
Benchmarking: Benchmarking is a process of comparing processes or systems of a given business with those of the other companies. Benchmarking helps managers and employees to rate their functional performance by comparing their performance with that of other leading companies. This gives better scope for managers and employees to improve their performance efficiency.

Team spirit: Team- work is essential for the success of any quality movement. Employees at all levels have to participate in decision making to affect the overall outcome of the organisation. A common means to promote employee participation is to group them into teams. Team responsibilities range from problem solving to scheduling work, assigning jobs and hiring members. Thus in a participative work culture quality is considered everybody’s responsibility.

What do customers want?

TQM being a customer oriented management programme, its main goal is to satisfy the customers. However, it is difficult to know what the customer expects and to measure the expectations. Customers’ appreciation of the product’s quality is based on his subjective comparison. Therefore, measurement of attitudes and systems becomes critical.

Customer’s wants are broadly classified into three classes:

Achieving customer satisfaction in the service sector

It is not just enough to produce a good quality product to fully satisfy a customer. A customer also derives great deal of satisfaction from the services that comes along with the product. Customers’ satisfaction in the service sector depends on product quality and the quality of the service process.

A service process may be defined as the wholeness of the transactions between the service provider and the customer. This results in the selection, delivery and consumption of the product. Customer satisfaction in the service sector is based on the following criteria. The subjective comparison between the customers’ expectations and their experience with the services, their evaluation of the services and service outcome, and delivery of regular services and effective handling of problems…………….

An organisation must monitor, evaluate and control its employees behaviour to meet customers’ expectations for services. For instance, in the restaurant business the way customers are treated by waiters might determine the restaurants success or failure. Therefore, an organisation has to develop certain standards and provide facilities like training and equipment like telephones and computer terminals to employees to provide better services to customers. Neglecting the needs of employees for resources and supplies diminishes the quality of input to them, which would ultimately reduce the quality of employee output.

With all resources and supplies provided, employees constantly try to improve their output to effectively meet customers’ expectations. However to achieve this employees must approach customers and gather relevant information. This information must be interpreted and translated into product and service specifications.

Strategy to implement Employee Involvement (EI):

TQMs success depends on employee participation for improved quality product and customer satisfaction. Organisations need to have a strategy to be successful in implementing employee involvement. According to the GAO (General Accounting Office) study a strategy should include the following features.

Readiness assessment: Organisations should have means to identify:

This information would help in decision making to choose between various practices that suit the organisation. Interviews, focus groups, observation and examining the records are methods to collect the required information. Organisations can also use the services of outside experts to carry out employee attitude surveys, performance analysis and statistical analysis for readiness assessment.

Communication: The goals set by management for achieving EI must be communicated. Employee participation can be improved by giving rewards and publishing accomplishments in employee newsletters.

Training: Managers and employees are trained to acquire the necessary skills like group leadership, providing feedback and problem solving for successful implementation of EI.

Strategy evaluation: This includes evaluating and monitoring employee participation in planning, problem solving and decision making.

A follow up for decision makers:

Not all quality programmes, which use EI succeed. In 1987 GAO surveyed 962 private organisations. An analysis of the data from the survey shows that, organisations that used readymade or pre-packaged EI programmes failed in their initiative. The decision makers in each organisation should therefore, consider their own organisation’s history, culture and resources before designing a quality programme. While adopting the right quality programs decision makers must:

However, to meet customers’ demands the organisation has to develop a culture, which facilitates changes. Employees resist changes as they threaten their authority and their traditional work culture. Organisations must therefore start from the traditional model by holding the managers responsible for improving employee participation. Such a transitional approach to develop participative attitude in managers would help to successfully take the organisation toward total quality management.

Getting started with organisation readiness assessment:

The foremost step in the decision making process is assessing the existing attitudes, cultures and practices in an organisation. Detailed studies must be carried out to identify the critical needs of the organisation and monitor organisation’s current performance and improvement. Such monitoring helps to identify and reduce gaps between the current performance and that desired by management, employees and customers.

The data collected from the study can also be used to assess the training needs of employees. If the organisation fails to identify current employee skills, knowledge and management style it may end up giving unnecessary training to employees. There is also a possibility that the critical training needs of employees are neglected. This may render a quality improvement programme ineffective.

Management is also another important resource of an organisation. It is therefore essential to assess management capabilities carefully before formulating long- term strategies. For instance, the GAO survey in 1987 revealed that the top and middle management support was a significant factor in the success of many EI programmes.

Appropriate methods and instruments:

Survey methods and instruments must be used depending on the way the decision makers would use and communicate the information from readiness assessment and other surveys. The objectives of the survey are to be made clear for the communication to be effective. The management should clearly express what they want the information for and what they intend to do with it. This would enable the researcher to develop appropriate instruments for gathering the information.