TOTAL QUALITY MANAGEMENT:Determinants of Quality, Responsibility for Quality

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Production and Operations Management MGT613

Lesson 25

TOTAL QUALITY MANAGEMENT

Total Quality Management is a philosophy that involves each and every individual in an organization in

a continual effort to improve quality and achieve customer satisfaction.

The TQM Approach

TQM is not called philosophy for nothing. It is that common viewpoint as well as attitude shared by the

whole organization that helps the organization achieves its prime objective of increase in revenue as

well as a continuous relationship with the customer, by providing a quality based service which fulfills

the customer's needs and requirements.

If we apply the TQM approach we can identify the role played by various departments and interfaces of

the organization. These roles at the functional and departmental levels if not in line with the

organizational strategy would not allow the organization to pursue TQM.

Sr. #

TQM Approach

Department

Find out what the customer wants

Marketing

Design a product or service that meets or exceeds

Design Dept

customer wants

Design processes that facilitates doing the job right

Operations Dept

the first time

Monitor and Audit (Keeping track of) results

Senior/GM Managers

Extend these concepts to suppliers

SCM

Logistics/Warehouse

/Materials

TQM CRITICISMS

TQM Philosophy is often criticized for reasons which show weak implementation or poor management

perspective. The common criticism against TQM is:

1. TQM program not linked to overall Organizational Strategy : This is the weakness of top

management not a weakness in the TQM philosophy.

2. Quality based decisions not attached to revenue or marketing strategies: Quality concept should

be included in the functional side and not treated as separate and distinct from the functional

departments.

3. Incomplete planning with no clear cut road map for TQM implementation: A weak implantation

strategy that does not identify the milestones, goals and step by step objectives.

4. Rigid and impractical TQM goals: An absence of managerial skill, TQM goals should be

achievable and tangible.

5. Non training of employees about TQM philosophy. Employees if not trained wont be able to

make best use of TQM philosophy.

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Production and Operations Management MGT613

Elements of TQM

TQM is a philosophy so its elements consist of the various strategies, tactics which includes the

following:

Continual improvement

Competitive benchmarking

Employee empowerment

Team approach

Decisions based on facts

Knowledge of tools

Supplier quality

Champion

Quality at the source

Suppliers

Of the elements described above, we should also focus our attention on the idea of continuous

improvement as well as Quality at the Source.

Continuous Improvement: Philosophy that seeks to make never-ending improvements to the process of

converting inputs into outputs. The Japanese manufacturer as well as service providers have longed used

this concept. Kaizen is the Japanese word for continuous improvement.

Quality at the Source: The philosophy of making each worker responsible for the quality of his or her

work.

Determinants of Quality

The various Determinants associated with the quality concept in general and TQM philosophy in

particular is:

1. Quality of design: Intension of designers to include or exclude features in a product or service

2. Quality of conformance: The degree to which goods or services conform to the intent of the

designers

3. Quality of Ease of Use: Ease of use and instructions to use increase the chances but do not

guarantee that a product will be used for intended purpose and function properly and safely.

4. Quality of Service after Delivery: The degree to which goods or services can be recalled and

repaired, adjustment, replacement or buyback or reevaluation of service all come under this

category.

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Production and Operations Management MGT613

The Consequences of Poor Quality

The common consequences of Poor Quality are:

1. Loss of business: Loss in sales, revenues and customer base.

2. Liability: A poor quality product or service comes with the danger of the organization being

taken to court by an unhappy or affected customer.

3. Productivity: Loss in productivity as more time is spend in rectifying the errors or short coming

then producing more.

4. Costs: Increase in costs as a poor quality product is repaired or replaced or made new.

Responsibility for Quality

Quality Control Department cannot be held responsible for Quality alone. Quality is the responsibility

of each and every individual working for the organization. If we look into any organization be it a

manufacturing or service provider we can see the following departments working diligently for

achievement of Quality.

1. Top management

2. Design Department

3. Procurement Department

4. Production/operations Department

5. Quality assurance Department

6. Packaging and shipping Department

7. Marketing and sales Department

8. Customer service Department

Costs of Total Quality Management

There is a difference in opinion amongst experts when they analyze costs with respect to TQM. Few

experts feel that failure costs should be taken up as internal and external separately and others feel they

should be taken as one single entity of failure cost.

1. Failure Costs - costs incurred by defective parts/products or faulty services. Experts are of the

opinion that on average an organization loses 20 to 30% of its revenue because of poor quality

or costs associated with the failure of the product or service. Failure costs are of two types

internal and external:

a. Internal Failure Costs are the Costs incurred to fix problems that are detected before the

product/service is delivered to the customer.

b. External Failure Costs are all costs incurred to fix problems that are detected after the

product/service is delivered to the customer.

Of the two, Internal Failure Costs are less painful and can help an organization to register increase in

revenue and not compromising its product or service in the eye of its customers as well as its

competitors.

2. Appraisal Costs are the Costs of activities designed to ensure quality or uncover defects

3. Prevention Costs include all TQM training, TQM planning, customer assessment, process

control, and quality improvement costs to prevent defects from occurring

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Production and Operations Management MGT613

Quality and Ethics

Quality is closely associated with Ethics. A good service would always be able to fulfill customer needs

if it is able to follow Ethics in its true spirit. A service or product that has been poorly designed carries

liability. On the other hand if the organization has followed ethics to manufacture a product or service, it

would be able to provide a quality product or service to its customer.

TQM is an important concept and is followed by various departments of the organization. Accounting

department measures the costs associated with a poor quality based service or product, Finance

department measures the cash flows associated with various departments, Human Resources employees

workforce which is able to turn out quality based work, Management Information Systems design TQM

based systems to ensure increased productivity, similarly marketing department uses TQM techniques to

increase its market share and customer base. And last but not the least Operations department which

designs and implements TQM strategies.

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