Principles of Total Quality Management (TQM)

by Patrick Reynolds 22. July 2013 01:06

Total Quality Management (TQM) is a management approach focusing on the improvement of quality and performance in all functions, departments, and processes across the company to provide quality services which exceed customer expectations. TQM expands the scope of quality of every department from top management to lower level employees. It enables management to adopt a strategic approach to quality and put more effort on prevention rather than on inspection. Through TQM, all employees are trained in a professional manner and encouraged to make decisions on their own to improve the overall quality and attain higher standards. This is key to achieving the TQM results desired, because without your employees on board and feeling empowered, you might as well be swimming upstream. Through TQM, companies increase customer satisfaction, reduce costs, and foster team work. Companies can also gain higher returns on sales and investment. The ability to provide quality services allow for higher prices to be charged. Total quality means better access to global markets, greater customer loyalty, wider recognition as a quality brand, etc. TQM is broadly based on the following principles: 1. Customer Centric Approach Consumers are the ultimate judge to determine whether products or services are of superior quality or not. No matter how many resources are pooled in training employees, upgrading machines and computers, incorporating quality design process and standards, bringing new technology, etc.; at the end of the day, it is the customers who have the final say in judging your company. Companies must remember to implement TQM across all fronts keeping in mind the customers. 2. Employee Involvement Ensuring total employee involvement in achieving goals and business objectives will lead to employee empowerment and active participation from the employees in decision making and addressing quality related problems. Employee

empowerment and involvement can be increased by making the workspace more open and devoid of fear. 3. Continual Improvement A major component of TQM is continual improvement. Continual improvement will lead to improved and higher quality processes. Continual improvement will ensure companies will find new ways and techniques in producing better quality products, production, be more competitive, as well as exceed customer expectations. 4. Strategic Approach to Improvement Businesses must adopt a strategic approach towards quality improvement to achieve their goals, vision, and mission. A strategic plan is very necessary to ensure quality becomes the core aspect of all business processes. 5. Integrated System Businesses comprise of various departments with different functionality purposes. These functionalities are interconnected with various horizontal processes TQM focuses on. Everyone in the company should have a thorough understanding of the quality policies, standards, objectives, and important processes. It is very important to promote a quality work culture as it helps to achieve excellence and surpass customer expectations. An integrated system ensures continual improvement and helps companies achieve a competitive edge. 6. Decision Making Data from the performance measurement of processes indicates the current health of the company. For efficient TQM, companies must collect and analyze data to improve quality, decision making accuracy, and forecasts. The decision making must be statistically and situational based in order to avoid any room for emotional based decisions. 7. Communications Communication plays a crucial role in TQM as it helps to motivate employees and improve their morale during routine daily operations. Employees need to be involved as much as possible in the day to day operations and decision making process to really give them a sense of empowerment. This creates the environment of success and unity and helps drive the results the TQM process can achieve. It requires immense efforts, time, courage, and patience to successfully implement TQM. Businesses successfully implementing TQM can witness improved quality across all major processes and departments, higher customer retention, higher revenue due to improved sales, and global brand recognition.

14+ Principles of Total Quality Management (TQM)

Copyright1994 by Joseph Auciello,

TQM: "Doing the Right Thing, Right the First Time, All the Time; Always striving for Improvement & always satisfying the Customer." [DOD 1989]

1. ADD VALUE TO THE PROCESS: Every action by every employee should add value to the process or product in every way all the time. Enhance your work by your actions. <br

</br 2. DELIVER QUALITY ON TIME ALL THE TIME. Develop a pattern of delivering perfect products & services on time. Rate your sources by their ability to do this. <br

</br 3. BASE BUSINESS RELATIONSHIPS ON MUTUAL TRUST and confidence: Providers and Suppliers build trust and confidence through quality and deliverability. Customers build it by quick payment and clear lines of communication. Reliability, Forthrightness, and Honesty are the Basis of forming Business Relations. <br

</br 4. TRAIN INDIVIDUALS AND TEAMS TO SOLVE PROBLEMS:Teach Problem -Solving Tools / Techniques & Teaming as the means to solve quality, safety, productivity, and deliverability problems.

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</br 5. EMPOWER EMPLOYEES TO BE RESPONSIBLE for Quality, Safety, Productivity and Deliverability. Empowering means giving workers responsibility for their actions affecting their work. Share governance. <br

</br 6. DEED 'OWNERSHIP' OF PROCESS TO EMPLOYEES who have proven their capability. Reward and reinforce empowerment with Incentives, Job Security and Equity Sharing. Make employees owners of the process, not attendants. <br

</br 7. IMPLEMENT THE NEW TECHNOLOGY: Use modern information resources, INTERNET, databases, telecommunications, applications software, and project scheduling as tools to improve productivity. Use Statistical Process Control (SPC) to eliminate errors and defects and continually improve the system. <br

</br 8. COLLECT, MEASURE AND EVALUATE DATA before Making Decisions. "It never hurts to turn the light on." (J. DeSimone). Make Decisions based on evidence. "If you can't measure it, you can't evaluate it." <br

</br 9. APPLY THE '80/20' PRINCIPLE: Use this Problem-Solving Tool to put problems into 'Trivial Many' and 'Vital Few' Categories. Record the causes and frequencies of problems on a Tally Sheet. Develop this into a Pareto Chart which plots the frequencies (most- to least-important) of the problems. 20% of the causes create at least 80% of the problems. Importance of resolving vital problems first. <br

</br 10. DEVELOP 'WIN-WIN' SCENARIOS: Create solutions that will benefit all parties. Cooperation that develops synergism is the best solution. <br

</br 11. DEVELOP A MASTER PLAN: Good Design Precedes Good Craftsmanship. A well-designed plan tracks and benchmarks an action through to its completion. "Quality begins at the Design Level." (Marty Madigan) <br

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12. PLAN FOR ALL CONTINGENCIES: Prepare for all solutions by developing alternatives. If necessary, flowchart plans dealing with all possible alternatives. Apply 'If-Then-Else' type of logic to problems. <br

</br 13. MAKE ZERO DEFECTS AND ACCIDENTS YOUR GOAL: Use the tools of TQM, SPC, and Problem-Solving to achieve these goals by detecting and eliminating the causes. <br

</br 14. QUALIFY YOUR SOURCES AND SUPPLIERS: Use Quality and Deliverability as the basis for selecting the source of your materials and services. <br

</br 15. DELIVERABILITY: The Right Product at the Right Place at the Right Time. In world-class Just-in-Time (JIT) delivery systems, source parts are used without delay and inspection in the process. <br

</br 16. MEET THE NEEDS OF YOUR CUSTOMERS: Customers are anyone affected by your work: co-workers, team members, management, & especially the end-users. They are the rationale for your work. The justification for your work is to deliver products or services that meet or exceed their requirements. <br

</br 17. IMPROVE CONTINUOUSLY AND ALWAYS: Institute continuous improvement & life-long education, principles based on the 14 Points by W. Edwards Deming. Optimize your curve. They constitute an ever expanding continuum. Add to this list. <br

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TQM which calls for employees to share governance of the process, and the new mandates for technical and problem-solving training for employees is the foundation of a new culture that will dramatically improve the way we work and live. The quality of life of all Americans will be improved by the positive changes made in the workplace.

What Is Total Quality Management Total quality management is a management system for a customer focused organization that involves all employee in continual improvement of all aspects of the organization. TQM uses strategy, data, and effective communication to integrate the quality principles into the culture and activities of the organization.

Principles Of TQM

1- Be Customer focused: Whatever you do for quality improvement, remember that ONLY customers determine the level of quality. Whatever you do to foster quality improvement, training employees, integrating quality into processes management, ONLY customers determine whether your efforts were worthwhile.

2-Insure Total Employee Involvement: You must remove fear from work place, then empower employee... you provide the proper environment.

3- Process Centered: Fundamental part of TQM is to focus on process thinking.

4- Integrated system: All employee must know the business mission and vision. An integrated business system may be modeled by MBNQA or ISO 9000

5- Strategic and systematic approach: Strategic plan must integrate quality as core component.

6- Continual Improvement: Using analytical, quality tools, and creative thinking to become more efficient and effective.

7- Fact Based Decision Making: Decision making must be ONLY on data, not personal or situational thinking.

8- Communication: Communication strategy, method and timeliness must be well defined.

TQM Implementation Approaches You can't implement just one effective solution for planning and implementing TQM concepts in all situations. Below we list generic models for implementing total quality management theory: 1- Train top management on TQM principles.

2- Assess the current: Culture, customer satisfaction, and quality management system.

3- Top management determines the core values and principles and communicates them.

4- Develop a TQM master plan based on steps 1,2,3.

5- Identify and prioritize customer needs and determine products or service to meet those needs.

6- Determine the critical processes that produces those products or services.

7- Create process improvement teams.

8- Managers supports the efforts by planning, training, and providing resources to the team.

9- Management integrates changes for improvement in daily process management. After improvements standardization takes place.

10- Evaluate progress against plan and adjust as needed.

11- Provide constant employee awareness and feedback. Establish an employee reward/ recognition process.

Strategies to develop TQM 1-TQM elements approach: Take key business process and use TQM Tools to foster improvement. Use quality circles, statistical process control, taguchi method, and quality function deployment.

2 - The guru approach: Use the guides of one of the leading quality thinker.

3- Organization model approach: The organization use benchmarking or MBNQA as model for excellence.

4- Japanese total quality approach: Companies pursue the deming prize use deming principles

The Balanced Scorecard The Balanced Scorecard (BSC) helps companies determine specific measurements to balance their financial perspective. BCS enables organizations to clarify their vision and strategy and then translate them into action. The BSC approach originates from a multi company study conducted

during 1990. Researchers believed traditional financial accounting measures were not sufficient to improving businesses. These accounting systems needed to be changed. Representatives from a dozen different organizations (manufacturing, service, heavy industry, and high tech) met bimonthly. They developed a new performance measurement / accounting model. They believed this model would help organizations create future economic value.

Through various iterations and implementation experiences in a variety of organizations, the model evolved to its current format as a strategic management tool. The current BSC accounting requires much more than relying on past performance financial measurements. The company needs a wider measurement system to navigate through the competitive, technological, and capability-driven future

How it works Essentially, BSC complements financial measures of past performance with additional measures of future performance drivers. In total, there are four perspectives reflected in the BSC: 1) Financial

2) Customer 3) Internal business processes 4) Learning and growth The Balanced Scorecard helps YOUR organization accomplish the following: 1-Clarify and translate business strategy. A team of senior executive managers translates business unit strategies into specific strategic objectives. In formulating these objectives, the team clarifies the organizational vision and gains consensus. This teambased step in the BSC creates a shared model for the entire organization. 2- Communicate and link strategic objectives with the measures. Management communicates the strategic objectives and measures hroughout the company. Communication includes newsletters, bulletin boards, videos, presentations, e-mail, meetings, etc.This tells all employees that strategic objectives must be met for the organizational strategy to succeed. After understanding the high-level objectives for their business units, employees develop local actions to align their units to the stategic objectives. 3- Plan, set targets, and align strategic initiatives. Senior executives set ambitious targets for the scorecard measures (e.g., ones that would dramatically increase the stock price if the company is public, ones that double the return on investment capital, ones that double the growth rate). Next, managers identify stretch targets for their customer, internal business processes, and learning and growth objectives. Customer satisfaction measures and benchmarking can be used to develop the objectives. Managers then identify all the required initiatives to achieve the strategic breakthrough objectives. 4- Enhance strategic feedback and learning. This step provides for organizational learning. Monthly and quarterly management reviews examine financial targets as well as the other balanced scorecard measures. Monitoring allows adjustments to support business units, or, if necessary, fundamental changes in the strategy

The four area of the Balanced Score Card : 1- Financial perspective: Financial measures summarize the readily measurable economic consequences of actions already taken. They answer the question: Is the organization s strategy, deployment, and implementation contributing to bottom-line improvement? Examples of financial indicators include: Economic value added (EVA). Generation of cash flow. Operating income. Rapid sales growth. Return on capital employed. Return on net assets (RONA).

2-Customer perspective: Through the customer perspective, business unit managers identify their competing customer and market segments. They then select performance measures for these targeted segments. Examples of core customer measures are: Customer satisfaction. Customer retention. New customer acquisition.

 Customer profitability. Market and account share for the targeted segments. 3- Internal business process perspective: The internal business process perspective answers the question: What are the critical internal business processes in which the organization must excel? Internal business process measurements enable the business unit to: -Deliver value propositions that attracts and retain customers in the target market segments. -Satisfy shareholder expectations of superior financial returns. The Balanced Scorecard approach usually identifies entirely new processes at which the company must excel to meet customer and financial objectives. The Balanced Scorecard approach also attempts to incorporate innovation 4- Learning and growth perspective: The learning and growth perspective identifies the infrastructure the organization must build to create long-term growth and improvement. The three principal sources of organizational growth and learning are people, systems, and organizational procedures. The company identifies gaps between existing capabilities of people, systems, and procedures and the actions required to achieve breakthrough performance. To close gaps, the organization must invest in re-skilling employees, improving information technology and other support systems, and aligning organizational procedures and routines. The value of using the Balanced Scorecard The combining financial and nonfinancial measures is not unique to the Balanced Scorecard method. But in traditional applications, organizations use financial and nonfinancial measures primarily for tactical feedback and control of short-term operations. The Balanced Scorecard provides more than a tactical or operational measurement system.

Innovative organizations use BSC as a strategic management system to manage strategy for long-term benefits. All together, the Balanced Scorecard translates organizational vision and strategy into objectives and measures across a balanced set of perspectives. In addition to financial measures, the Balanced Scorecard helps an organization measure... -How business units create value for current and future customers. -How internal capabilities must be enhanced. -What investments must be made in people, systems, and procedures to improve future performance.

Basic Principles of Total Quality Management (TQM)

by Ron Kurtus (28 May 2001) The basic principles for the Total Quality Management (TQM) philosophy of doing business are to satisfy the customer, satisfy the supplier, and continuously improve the business processes. Questions you may have include: How do you satisfy the customer? Why should you satisfy the supplier? What is continuous improvement?

This lesson will answer those questions.

Satisfy the customer

The first and major TQM principle is to satisfy the customer--the person who pays for the product or service. Customers want to get their money's worth from a product or service they purchase.

Users
If the user of the product is different than the purchaser, then both the user and customer must be satisfied, although the person who pays gets priority.

Company philosophy
A company that seeks to satisfy the customer by providing them value for what they buy and the quality they expect will get more repeat business, referral business, and reduced complaints and service expenses. Some top companies not only provide quality products, but they also give extra service to make their customers feel important and valued.

Internal customers
Within a company, a worker provides a product or service to his or her supervisors. If the person has any influence on the wages the worker receives, that person can be thought of as an internal customer. A worker should have the mind-set of satisfying internal customers in order to keep his or her job and to get a raise or promotion.

Chain of customers
Often in a company, there is a chain of customers, -each improving a product and passing it along until it is finally sold to the external customer. Each worker must not only seek to satisfy the immediate internal customer, but he or she must look up the chain to try to satisfy the ultimate customer.

Satisfy the supplier

A second TQM principle is to satisfy the supplier, which is the person or organization from whom you are purchasing goods or services.

External suppliers
A company must look to satisfy their external suppliers by providing them with clear instructions and requirements and then paying them fairly and on time. It is only in the company's best interest that its suppliers provide it with quality goods or services, if the company hopes to provide quality goods or services to its external customers.

Internal suppliers
A supervisor must try to keep his or her workers happy and productive by providing good task instructions, the tools they need to do their job and good working conditions. The supervisor must also reward the workers with praise and good pay.

Get better work

The reason to do this is to get more productivity out of the workers, as well as to keep the good workers. An effective supervisor with a good team of workers will certainly satisfy his or her internal customers. Empower workers One area of satisfying the internal suppler is by empowering the workers. This means to allow them to make decisions on things that they can control. This not only takes the burden off the supervisor, but it also motivates these internal suppliers to do better work.

Continuous improvement
The third principle of TQM is continuous improvement. You can never be satisfied with the method used, because there always can be improvements. Certainly, the competition is improving, so it is very necessary to strive to keep ahead of the game.

Working smarter, not harder

Some companies have tried to improve by making employees work harder. This may be counter-productive, especially if the process itself is flawed. For example, trying to increase worker output on a defective machine may result in more defective parts. Examining the source of problems and delays and then improving them is what is needed. Often the process has bottlenecks that are the real cause of the problem. These must be removed.

Worker suggestions
Workers are often a source of continuous improvements. They can provide suggestions on how to improve a process and eliminate waste or unnecessary work.

Quality methods
There are also many quality methods, such as just-in-time production, variability reduction, and poka-yoke that can improve processes and reduce waste.

Summary
The principles of Total Quality Management are to seek to satisfy the external customer with quality goods and services, as well as your company internal customers; to satisfy your external and internal suppliers; and to continuously improve processes by working smarter and using special quality methods.