Total Quality Management CONCEPTS, PRINCIPLES AND IMPLANTATION
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Transcript of Total Quality Management CONCEPTS, PRINCIPLES AND IMPLANTATION
TOTAL QUALITY MANAGEMENT: CONCEPTS, PRINCIPLES AND IMPLANTATION
BY
OLOWU DAUDU Y. MALACHY
DEPARTMENT OF BUSINESS ADMINISTRATIONFACULTY OF ADMINISTRATION
AHMADU BELLO UNIVERSITY, ZARIA
Being a Paper Presented at a Seminar Organised by the Department of Business Administration,
Faculty of Administration,Ahmadu Bello University, Zaria
10th July, 2000
INTRODUCTION
Total Quality Management (TQM) is a management approach that originated in the
1950's and has steadily become more popular since the early 1980's. Total Quality is a
description of the culture, attitude and organization of a company that strives to provide
customers with products and services that satisfy their needs. The culture requires quality
in all aspects of the company's operations, with processes being done right the first time
and defects and waste eradicated from operations. TQM is, thus a management strategy
aimed at embedding awareness of quality in all organizational processes. It is a structured
system for satisfying internal and external customers and suppliers by integrating the
business environment, continuous improvement, and breakthroughs with development,
improvement, and maintenance cycles while changing organizational culture.
TQM is as well a method by which management and employees can become involved in
the continuous improvement of the production of goods and services - a combination of
quality and management tools aimed at increasing business and reducing losses due to
wasteful practices. Indeed, giving a name to a broad set of principles, methods, and tools
as described above can be inherently misleading and limiting. Nonetheless, a word-by-
word examination of the term will provide further insight into the meaning of the TQM
concept.
Total: Suggests full commitment of everyone in the organisation and a coverage of every
aspect of all processes.
Quality: Means continuously meeting customers’ requirements. Thus quality is
ultimately defined by the customer. Organisations must become cognizant of the
three levels of quality, namely;-
(i) Must be quality - meeting requirement
(ii) Expected quality - meeting expectations.
(iii) Exciting quality - exceeding expectation
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Must be (specifications) Quality: This level of quality can excite, cause
indifference or dissatisfy because the customer expressly specifies his
requirements. For example, a customer orders for a 600v APC brand of UPS and
is supplied with a 600v Mercury brand, with the explanation that the two perform
the same function.
Expected Quality: This level of quality does not excite the customer, but if
lacking can cause deep dissatisfaction. Whilst the customer will not tell or ask for
it, he expects it. Usually the customer is indifferent to this type or level of quality
unless disappointed. Every bank customer expects the banking hall to be cool and
comfortable, not hot and humid.
Exciting Quality: This level of quality excites because it is unexpected.
Customers cannot request for it because they are not aware of its existence or
possibility. This level of quality encourages customer loyalty. However, once
experienced, an exciting quality becomes expected.
Management:Implies an active process led from the top. The usage of this term
is intended to reflect the viewpoint that, cetris paribus, “85% of the
problems are caused by the system” and that only management can
correct the system problems. Thus, quality can and must be
managed.
From the foregoing explanation of its constituent terms, Total Quality Management can
be defined as the combination of people and systems, working harmoniously together for
the ultimate benefit of the customer.
Total Army Quality (TAQ)
The concept of TQM is applicable to the military establishment as it is to the
Business Environment. Total Army Quality is the Army’s integrated strategic
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management approach for achieving performance excellence. TAQ cultivates
incremental and breakthrough improvement, innovation, continuous learning
and change, and provides avenues to recognize those who strive for excellence.
BASIC CONCEPTS OF TQM
TQM is founded on a number of basic and extremely important concepts. These
concepts or principles are built around the customer, quality and employees. They
include the following:
1. Everyone has a customer.
2. Everyone is responsible for quality.
3. Focus on preventing problems not fixing them.
4. Team work.
5. Processes fail not people.
6. Top Management must lead.
7. Middle management must support.
8. Focus on process and systems.
9. Know the cost of quality.
10. Zero defects.
Everyone has a Customer
TQM embraces more than the external customer. We all do not work in isolation;
work has no value unless it is “delivered” to someone else. So we are as much
customers as we are suppliers of any service or product. A customer is anyone to
whom you provide a product or service. A supplier is anyone who provides a
product or service to a third party.
If you fail to satisfy your external customer - he has a choice to go somewhere
else for an alternative service. If you fail to satisfy your internal customer, then it
is most likely the service provided has to be done again to meet the required
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expectation or specification, thus costing more. In either case - the company
loses!
Everyone is responsible for Quality
Everyone - everyone must make a commitment to getting things right first time.
To get everyone involved, you must provide the tools and techniques to analyse
and drive out problems. These have to be taught at all levels in all functions if
everyone is to participate. There is a need to develop the attitude and influence
the culture of the organization by learning to put people first, caring for
employees, creating goal congruence between leaders and those being led.
Prevent Problems not fix them
Fire fighting is random strategy which is inefficient in the short run and grossly
ineffective in the long run. There must be a structured approach to dealing with
problems in organizations. This involves:
- Finding root causes - dealing with core problems not the symptoms. These will
entail the use of specific tools available in the quality field to assist in identifying
root causes of problems.
- Selecting the best solution.
- Prevent reoccurrence by standardizing the solution or the new system or process
devised.
Team Work
People work in teams either naturally within the same department or across
departments and functions in recognition of the specialized role they all play. The
solution for effective work processes is through teamwork. This is based on
everyone understanding each other’s needs.
Processes Fail Not People
Everything we do is a process, which is the transformation of a set of inputs into
the desired outputs. Processes should be managed through a strategy of
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prevention, rather than detection. In reality nobody goes to work to make
mistakes unless the system makes it possible. Indeed, majority of mistakes occur
at work because the process has failed. The objectivity of TQM in this area is to
design robust processes that make it difficult to fail. TQM ensures that
management adopts a strategic overview of quality and focus on prevention, not
detection of problems. Using flow charts for example, areas of possible failure
can be highlighted and possibility of failure reviewed.
Top Management Must Lead the Process
TQM must start at the top where serious commitment to quality must be
demonstrated. Indeed, TQM now challenges management’s traditional role to
plan organize and control and now demands that management should now
empower, coach, develop and encourage organization wide participation in
running the business. This demands commitment and leadership from
management at all levels. Management must realize that with the advent of the
knowledge worker, he is no longer the only solution provider.
Middle Management Must Support
Middle management also has a key role to play in communicating the message.
Traditionally, middle management’s role is that of supervisor, maintenance of
quality, setting priorities and developing staff. In TQM focused organization, all
these remain, in addition to the responsibility for the continuous improvement of
every aspect of processes under his control.
Focus on Improving Processes and Systems
People work in chains of activities that collectively form business processes.
TQM focused organizations seek to improve the process of delivering a service or
product than individual or departmental performance or competence. TQM
philosophy encourages a supportive and encouraging organization culture where
people will innovate and improve these processes. Unfortunately, few
organizations have a process by which employees are encouraged or enabled to
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improve their work-giving rise to the frequent system failures that is prevalent in
most organisations. System failure is said to occur when the link in the chain
breaks i.e. the flow of work is disturbed.
We have all learnt to live with and accept failures. Systems failures have become
standard because we view each step or function of our activities and not the total
process. Sub-optimal performance at functional or unit level is viewed as
acceptable, the accumulation of such breakdowns at every step ends up in global
failure.
Know the Cost of Quality
The cost of quality is a misnomer. Cost of quality is what it costs an organization to
avoid, review and measure all those activities devoted to consciously improving quality.
Prevention: Costs to ensure that things get done right time first time. The whole
philosophy of TQM hinges on prevention.
Appraisal: Cost of inspecting, testing another checking of products or services.
Internal failure costs: Cost of putting things right before delivery to customer.
External failure costs: Cost of putting things right after delivery i.e. warranty costs.
Exceeding requirements: Cost of providing a service or product, which a customer does
not need.
Lost opportunities: Cost of an uncompetitive product or service.
Focus should be on prevention, which drives out failure costs. Focusing therefore
on processes instead of inspection should reduce costs associated with inspection
as product or service levels improve.
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Zero Defects
Zero defects is a standard of performance which insists on doing the job right first
time. It then follows that if it can be done right first time, it can be done right all
the time.
IMPLEMENTATION PRINCIPLES AND PROCESSES
Many companies have difficulties in implementing TQM. Surveys by consulting firms
have found that only 20-36% of companies that have undertaken TQM have achieved
either significant or even tangible improvements in quality, productivity, competitiveness
or financial return. As a result many people are skeptical about TQM. However, when
one looks at successful companies one finds a much higher percentage of successful
TQM implementation.
A preliminary step in TQM implementation is to assess the organization's current reality.
Relevant preconditions have to do with the organization's history, its current needs,
precipitating events leading to TQM, and the existing employee quality of working life. If
the current reality does not include important preconditions, TQM implementation should
be delayed until the organization is in a state in which TQM is likely to succeed.
If an organization has a track record of effective responsiveness to the environment, and
if it has been able to successfully change the way it operates when needed, TQM will be
easier to implement. If an organization has been historically reactive and has no skill at
improving its operating systems, there will be both employee skepticism and a lack of
skilled change agents. If this condition prevails, a comprehensive program of
management and leadership development may be instituted. A management audit is a
good assessment tool to identify current levels of organizational functioning and areas in
need of change. An organization should be basically healthy before beginning TQM. If it
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has significant problems such as a very unstable funding base, weak administrative
systems, lack of managerial skill, or poor employee morale, TQM would not be
appropriate.5
However, a certain level of stress is probably desirable to initiate TQM. People need to
feel a need for a change. Experts address this phenomenon by prescribing the use of
building blocks which are present in effective organizational change. These forces
include departures from tradition, a crisis or galvanizing event, strategic decisions,
individual "prime movers," and action vehicles. Departures from tradition are activities,
usually at lower levels of the organization, which occur when entrepreneurs move outside
the normal ways of operating to solve a problem. A crisis, if it is not too disabling, can
also help create a sense of urgency which can mobilize people to act. In the case of TQM,
this may be a funding cut or threat, or demands from consumers or other stakeholders for
improved quality of service. After a crisis, a leader may intervene strategically by
articulating a new vision of the future to help the organization deal with it. A plan to
implement TQM may be such a strategic decision. Such a leader may then become a
prime mover, who takes charge in championing the new idea and showing others how it
will help them get where they want to go. Finally, action vehicles are needed and
mechanisms or structures to enable the change to occur and become institutionalized. In
this respect, the principles discuss above provide the needed platform for actualizing
TQM.
Deming's 14 points
W Edwards Deming was an American statistician who was credited with the rise of Japan
as a manufacturing nation, and with the invention of Total Quality Management (TQM).
Deming went to Japan just after the War to help set up a census of the Japanese
population. While he was there, he taught 'statistical process control' to Japanese
engineers - a set of techniques which allowed them to manufacture high-quality goods
without expensive machinery. In 1960 he was awarded a medal by the Japanese Emperor
for his services to that country's industry.
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Deming returned to the US and spent some years in obscurity before the publication of
his book "Out of the crisis" in 1982. In this book, Deming set out 14 points which, if
applied to US manufacturing industry, would he believed, save the US from industrial
doom at the hands of the Japanese.
Although Deming does not use the term Total Quality Management in his book, it is
credited with launching the movement. Most of the central ideas of TQM are contained in
"Out of the crisis".
The 14 points seem at first sight to be a rag-bag of radical ideas, but the key to
understanding a number of them lies in Deming's thoughts about variation. Variation was
seen by Deming as the disease that threatened US manufacturing. The more variation - in
the length of parts supposed to be uniform, in delivery times, in prices, in work practices
- the more waste, he reasoned.
From this premise, he set out his 14 points for management, which we have paraphrased
here:
A core concept in implementing TQM is Deming’s 14 points, a set of management
practices to help companies increase their quality and productivity:
1. Create constancy of purpose for improving products and services. Replace short-
term reaction with long-term planning.
2. Adopt the new philosophy. The implication is that management should actually
adopt his philosophy, rather than merely expect the workforce to do so.
3. Cease dependence on inspection to achieve quality. If variation is reduced, there
is no need to inspect manufactured items for defects, because there won't be any.
4. End the practice of awarding business on price alone; instead, minimize total cost
by working with a single supplier.
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5. Improve constantly and forever every process for planning, production and
service. Constantly strive to reduce variation.
6. Institute training on the job. If people are inadequately trained, they will not all
work the same way, and this will introduce variation.
7. Adopt and institute leadership. Deming makes a distinction between leadership
and mere supervision. The latter is quota- and target-based.
8. Drive out fear. Deming sees management by fear as counter- productive in the
long term, because it prevents workers from acting in the organisation's best
interests.
9. Break down barriers between staff areas. Another idea central to TQM is the
concept of the 'internal customer', that each department serves not the
management, but the other departments that use its outputs.
10. Eliminate slogans, exhortations and targets for the workforce. Another central
TQM idea is that it's not people who make most mistakes - it's the process they
are working within. Harassing the workforce without improving the processes
they use is counter-productive.
11. Eliminate numerical quotas for the workforce and numerical goals for
management. Deming saw production targets as encouraging the delivery of poor-
quality goods.
12. Remove barriers that rob people of pride of workmanship, and eliminate the
annual rating or merit system. Many of the other problems outlined reduce worker
satisfaction.
13. Institute a vigorous program of education and self-improvement for everyone.
14. Put everybody in the company to work towards accomplishing the transformation.
ESSENTIAL TQM TECHNIQUES
Having discussed its essential principles and concepts, we can now outline and discuss
the techniques, systems and procedures used to ensure a successful implementation of the
TQM doctrine. Among these systems, the following are especially important:
* establishing and monitoring the Cost of Quality
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* establishing and monitoring Total Quality Standards
* establishing and motivating Quality Groups
* benchmarking
Establishing And Monitoring The Cost Of Quality Making any product or providing
any service involves two basic costs:
i) The Mandatory Cost of Doing Business (MCDB); and
ii) The Cost of Quality.
MCDB includes all the costs that would actually be incurred in providing defect free
products or services and of running the business. These include the cost of inputs (raw
materials), equipment, labour, office spaces, transportation, management processes, etc.
As we have already seen, the Cost of Quality (COQ) is one of the most central concepts
of Total Quality Management. MCDB and COQ make up the Cost of Doing Business
(CDB). By reducing COQ, we reduce CDB and move nearer MCDB. If we understand
and properly manage the relationship between the elements of COQ, we will be able to
ensure TQM in the various parts of the Organisation.
Establishing and Monitoring Total Quality Standard and TQM Level.
In order to produce a quality product or service that meets and even exceeds the stated
needs and expectations of the customer, we need in the first instance to have in a place a
way of ascertaining what level of product/service quality we are seeking to meet and even
exceed.
TQS provide therefore the measurements against which the quality level of a
product/service provided by a supplier to, a customer could be determined. TQS, contain
the needs and expectations reduced to measures and indices - in short, the quality
specifications of the customer which the supplier must attempt to meet and even exceed
at all times.
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The end result of the quality specifications will usually be a product or service provided
by the supplier to the customer. To assure the quality of that end result - product or
service, TQS also need to be established and applied to all the activities and processes,
including procedures, systems used by the supplier to produce the product or service
desired by customer.
One procedure developed for doing this is called Supplier and Customer (SC) Analysis.
Another procedure introduced by Mike Robson is called In-Department Evaluation of
Activities (IDEA). Through the use of either procedure, an Organisation is able to
establish a system, which enables it to establish:
i ) The current level of customer satisfaction and hence the overall level of TQM
existing in the entire organisation;
ii) The range of opportunities existing for quality improvement in all parts of the
organization;
iii) Total Quality Standards for every activity, process and hence the results (product
and services) that flow from such activities for the entire Organisation.
The Establishment of Quality Groups
The establishment, training and subsequent activities of quality groups constitute
an important component of any process aimed at achieving Excellence through
TQM.-. We are of course, familiar with the Quality Circles for which Japanese
companies are famous. However, quality circles are one of the many types of
quality groups that TQM organisations use. For your Total Quality Management
programme, the following groups will be essential:
* Quality Circles;
* Quality Improvement Teams; and
* Quality Task Forces.
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Quality Circles
These are groups formed voluntarily by between 5-7 employees who work in the same
section or unit. They meet periodically, usually once a week for about 1 hour during
office hours. The purpose is working on a problem affecting the productivity and
performance of the entire unit or section using appropriate problem solving techniques
and analysis of the selected problem and which following the investigation, prepare
reports with recommendations for action and make presentation to management for its
consideration and action.
The reports and the recommendations are considered by management and when accepted,
implemented, usually with the full participation of or feedback to circle members. QC's
are ongoing: they disband only when circle members are no longer interested in
membership of the circle.
Quality Improvement Teams
These are similar -to quality circles the only difference between QlTs and- QCs is that the
membership drawn from different functional areas whereas the, membership of QCs is
drawn from the same work group or work unit. Membership of QITS is voluntary.
Quality Task Forces
Quality Task Force are formed by the management of the organization to examine,
analyse and make, recommendations which are perceived by the management to be
adversely affecting the performance and productivity in the organization. The members
of the QTF as well as its terms of reference are chosen by management.
QTF's are problem specific which will be disbanded as soon as they have accomplished
the examination and analysis of the assigned problem. Quality task Forces can be used
by top management or by the manager of a particular section, unit or department. In the
former case, membership of the QTF will be cross functional. In the latter case, it will be
sectional or departmental restricted only to one functional area.
Benchmarking
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To become the best you must learn from the best. Companies have been scrutinizing
competitors ever since there were competitors. When they weren’t comparing price,
product features, they look at product quality. Total quality management demands a
broader view of competitive comparisons. They are still being made on product and
service quality, but they have been extended to include customer satisfaction, and other
customer data, internal operations, business procession and support services. Much of
this information is gathered by Benchmarking.
Benchmarking is the process of understanding your performance, comparing it against
the performance of best-in-class companies (renowned industry leaders) learning how
they perform better, and using that information to improve in other words adapting their
successful strategies.
Benchmarking has been called the “power and tool of quality.” It is the difference
between teaching yourself how to play football and taking lessons from Pele. One leads
to inefficient mechanics and frustration, the other to frequent netting and hope for
improvement.
Benchmarking can be divided into two parts: practices and metrics. Benchmarking
should first be approved on the basis of investigating best industry practices. The metrics
that quantify the effect of incorporating the practices in an operation can be analysed and
synthesized later. Generally, metrics chosen should be true indicators of the process
performance and may include customer satisfaction, unit cost, cycle time, and appropriate
asset measurement.
The bottom-line benefit of Benchmarking is competitiveness. Benchmarking helps to
develop a picture of how the operation should look after the changes has been made or
attain superior competitive performance. This is a powerful way to marshal the energies
of the operation to enable it to become competitive and then outdistance the competition.
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CONCLUSION
Having discussed the concepts and basic issues relating to TQM, it is important to
emphasize that the commitment to quality cannot be real nor taken seriously by
employees and indeed, by other managers where a single manager allows the integrity of
operations to be compromised.
The integrity of operations is compromised when a manager engages in double standards.
It is compromised when, in the words of the Quality Manager, “a manager puts pressure
on the system to let him or her get away with things that are definitely wrong”. The
integrity of operations is compromised when a manager fails to see himself as the
standard by which the quality of operations is judged. It is composed when, as a
management, we build into the environment of work conditions that indicate contempt
for lower level employees.
For these reasons, assuring the integrity of operations requires, indeed demands, courage
on the part of top management to take ‘hard’ decisions where necessary. This courage is
required to change current management attitudes and practices as well as processes,
structures and procedures that have provided support whether hidden or open for these
attitudes and practices in the past.
TQM encourages participation amongst shop floor workers and managers. There is no
single theoretical formalization of total quality, but Deming, Juran and Ishikawa provide
the core assumptions, as a "...discipline and philosophy of management which
institutionalizes planned and continuous... improvement ... and assumes that quality is the
outcome of all activities that take place within an organization; that all functions and all
employees have to participate in the improvement process; that organizations need both
quality systems and a quality culture.".
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Ishikawa, K, (1985); What is Total Quality Control? The Japanese way. Englewood
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