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Introduction to Business MGT 211

Lesson 38

TOTAL QUALITY MANAGEMENT (continued)

Definition --- As defined by ISO:

"TQM is a management approach for an organization, centered on quality, based on the

participation of all its members and aiming at long-term success through customer satisfaction,

and benefits to all members of the organization and to society."

In Japanese, TQM comprises four process steps, namely:

1. Kaizen Focuses on Continuous Process Improvement, to make processes visible,

repeatable and measurable.

2. . Atarimae Hinshitsu  Focuses on intangible effects on processes and ways to

optimize and reduce their effects.

3. Kansei  Examining the way the user applies the product leads to improvement in the

product itself.

4. Miryokuteki Hinshitsu Broadens management concern beyond the immediate

product.

TQM requires that the company maintain this quality standard in all aspects of its business.

This requires ensuring that things are done right the first time and that defects and waste are

eliminated from operations.

Origins --- Although W. Edwards Deming is largely credited with igniting the quality revolution

in Japan starting in 1946 and trying to bring it to the United States in the 1980s,

Armand V. Feigenbaum was developing a similar set of principles at General Electric in the

United States at around the same time. "Total Quality Control" was the key concept of

Feigenbaum's 1951 book,

Quality Control: Principles, Practice, and Administration, a book that was subsequently

released in 1961 under the title, Total Quality Control (ISBN 0-07-020353-9). Joseph Juran,

Philip B. Crosby, and Kaoru Ishikawa also contributed to the body of knowledge now known as

TQM.

The American Society for Quality says that the term Total Quality Management was first used

by the U.S. Naval Air Systems Command "to describe its Japanese-style management

approach to quality improvement."

This is consistent with the story that the United States Department of the Navy Personnel

Research and Development Center began researching the use of statistical process control

(SPC); the work of Juran, Crosby, and Ishikawa; and the philosophy of Deming to make

performance improvements in 1984. This approach was first tested at the North Island Naval

Aviation Depot. In his paper, "The Making of TQM: History and Margins of the Hi (gh)-Story"

from 1994, Xu claims that "Total Quality Control" is translated incorrectly from Japanese since

there is no difference between the words "control" and "management" in Japanese.

William Golimski refers to Koji Kobayashi, former CEO of NEC, being the first to use TQM,

which he did during a speech when he got the Deming prize in 1974.

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TQM in manufacturing --- Quality assurance through statistical methods is a key component

in a manufacturing organization, where TQM generally starts by sampling a random selection

of the product. The sample can then be tested for things that matter most to the end users.

The causes of any failures are isolated, secondary measures of the production process are

designed, and then the causes of the failure are corrected. The statistical distributions of

important measurements are tracked. When parts' measures drift into a defined "error band",

the process is fixed. The error band is usually a tighter distribution than the "failure band", so

that the production process is fixed before failing parts can be produced. It is important to

record not just the measurement ranges, but what failures caused them to be chosen. In that

way, cheaper fixes can be substituted later (say, when the product is redesigned) with no loss

of quality. After TQM has been in use, it's very common for parts to be redesigned so that

critical measurements either cease to exist, or become much wider.

It took people a while to develop tests to find emergent problems. One popular test is a "life

test" in which the sample product is operated until a part fails. Another popular test is called

"shake and bake", in which the product is mounted on a vibrator in an environmental oven,

and operated at progressively more extreme vibration and temperatures until something fails.

The failure is then isolated and engineers design an improvement.

A commonly-discovered failure is for the product to disintegrate. If fasteners fail, the

improvements might be to use measured-tension nut drivers to ensure that screws don't come

off, or improved adhesives to ensure that parts remain glued. If a gearbox wears out first, a

typical engineering design improvement might be to substitute a brushless stepper motor for a

DC motor with a gearbox. The improvement is that a stepper motor has no brushes or gears to

wear out, so it lasts ten or more times as long. The stepper motor is more expensive than a

DC motor, but cheaper than a DC motor combined with a gearbox. The electronics are

radically different, but equally expensive. One disadvantage might be that a stepper motor can

hum or whine, and usually needs noise-isolating mounts.

Often, a "TQMed" product is cheaper to produce because of efficiency/performance

improvements and because there's no need to repair dead-on-arrival products, which

represents an immensely more desirable product.

TQM and contingency-based research --- TQM has not been independent of its

environment. In the context of management accounting systems (MCSs), Sim and Killough

(1998)s how that incentive pay enhanced the positive effects of TQM on customer and quality

performance. Ittner and Larcker (1995) demonstrated that product focused TQM was linked to

timely problem solving information and flexible revisions to reward systems. Chendall (2003)

summarizes the findings from contingency-based research concerning management control

systems and TQM by noting that "TQM is associated with broadly based MCSs including

timely, flexible, externally focused information; close interactions between advanced

technologies and strategy; and non-financial performance measurement." (p.143)

TQM, just another --- Management fad ?

Abrahamson (1996) argued that fashionable management discourse such as Quality Circles

tends to follow a lifecycle in the form of a bell curve. Ponzi and Koenig (2002) showed that the

same can be said about TQM, which peaked between 1992 and 1996, while rapidly losing

popularity in terms of citations after these years. Dubois (2002) argued that the use of the term

TQM in management discourse created a positive utility regardless of what managers meant

by it (which showed a large variation), while in the late 1990s the usage of the term TQM in

implementation of reforms lost the positive utility attached to the mere fact of using the term

and sometimes associations with TQM became even negative. Nevertheless, management

concepts such as TQM leave their traces, as their core ideas can be very valuable. For

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Introduction to Business MGT 211

example, Dubois (2002) showed that the core ideas behind the two management fads

reengineering and TQM, without explicit usage of their names, can even work in a synergistic

way.

Tools for Total Quality Management

Competitive product analysis -- Process by which a company analyzes a competitor's

products to identify desirable improvements.

Value-Added Analysis -- process of evaluating all work activities, materials flows, and

paperwork to determine the value they add for customers.

Statistical Process Control -- methods for gathering data to analyze variations in production

activities to see when adjustments are needed.

Process Variationvariation in products arising from changes in

production inputs.

ii.

Control Chartprocess of checking production periodically by plotting

the results, to determine when a process is beginning to depart from

normal operating conditions.

Quality/Cost Studies -- studies identifying a firm's current costs as well as the areas with the

largest cost-savings potential.

Internal Failures--reducible costs incurred during production and

before bad products leave a plant.

ii.

External Failures--reducible costs incurred after defective products

have left a plant.

Quality Improvement Teams -- TQM tool in which groups of employees work together to

improve quality by meeting regularly to define, analyze, and solve common production

problems to improve both work methods and the products they make.

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