What is Total Quality Management?
Total Quality Management (TQM) is a management concept that emphasizes providing unparalleled customer satisfaction, value creation, and adhering to heightened customer expectations through the constant delivery of high-quality goods & services and enduring long-term success & growth.
TQM Management is an inclusive concept that requires support from all departments across the organization to develop a Quality Assurance Plan, meticulously analyze and transform processes, minimize human errors, and create an open, trusting, and creative environment.
Fundamental Principles of Total Quality Management
1. Customer Satisfaction
The ultimate objective of Total Quality Management is to fulfill customer expectations, provide a seamless experience, and convert them into repeat buyers. It can only be accomplished by building quality products, reducing defects, focusing on customer safety, and providing ongoing support.
2. Employee Training
Merely emphasizing the concept of TQM Management is not enough. The business needs to train its employees and foster them with the required knowledge & skills to build a high-performing workspace and increase customer satisfaction. It may also conduct seminars with industry experts to stay up-to-date on the latest happenings.
3. Promote Coordination
Changes in one department of the company often have ripple effects on other departments. Adopting Total Quality Management (TQM) requires a strong collaboration between different departments and teams. It involves changing company policies to promote open communication between members of different teams to achieve shared business objectives.
4. Process Standardization
Total Quality Management (TQM) involves bringing uniformity in processes across different departments. It can be achieved by standardizing the processes and automating various tasks. Bringing standardization across various processes allows you to serve customers and deliver high-quality products.
5. Enhancing Partnership
Apart from continuous improvement in the product line, the company builds a relationship based on trust and confidence with external stakeholders such as vendors, customers, and shareholders. Adopting a transparent medium of communication helps achieve product quality goals, and achieve mutual benefits and long-term profits.
Total Quality Management Examples
1. Apple
Apple is considered a best-in-class manufacturer of iPhones and Mac books. One of the things that sets it apart from other manufacturers is its strong emphasis on design excellence, elevated quality standards, and top-notch customer support. Each Apple product goes through a series of rigorous tests to ensure it meets quality assurance and control.
2. Amazon
The e-commerce giant offers over 500 Million products, and it is known for its customer-focused business model and seamless order processing. It uses powerful data analytics to track customer interaction and enhance customer experience.
3. Starbucks
Starbucks is among other total quality management examples. It is a global key player known for its superior quality of products that go through rigorous quality tests. It provides timely training to its employees to ensure an elevated customer experience.
TQM Management Methodologies
1. Lean Manufacturing
Lean Manufacturing focuses on adding value to the customers. It does so by building products that are of superior quality, safe for human use, and durable. Lean Manufacturing eliminates all those features that customers are not willing to pay for. Besides, it places more emphasis on innovation, optimizing processes, and trouble resolution.
2. Six Sigma
Six Sigma is one of the most widely adopted TQM Management methodologies that help make data-driven decisions. It provides a structured approach to identifying and eliminating various faults. It has gained increasing popularity after its adoption by Toyota and General Electric. Since then, it has been widely used by industries of all types including manufacturing, finance, healthcare, and services, among others.
3. Performance Benchmarking
As the name suggests, the Benchmarking methodology in Project Management measures the quality and performance of the company’s products by comparing them with other industry standards. It takes different dimensions into account including cost, time, and quality. This helps set benchmarks and identify the areas of improvement.
4. Statistical Process Control
Statistical Process Control is a methodology of Total Quality Management that uses predefined acceptable quality limit to measure the process standards in real-time. Whenever the data overrides any of the predefined quality limits, it indicates a breach of the crucial quality parameters.
5. Business Process Re-engineering
Business Process Re-engineering considers the five important factors, viz. speed, quality, cost, output, and service. It places a key emphasis on lowering business costs and eliminating manual work at a significant level.
Benefits of Total Quality Management
1. Improved Customer Service
Quality Management keeps the customer at the center of all business activities. It thrives to provide value to the customers, rather than merely saving manufacturing costs and increasing profit margins. When the business invests money in customer excellence, it helps it achieve long-term success and expand the marketplace.
2. Reduces Production Bottlenecks
Another benefit of TQM Management is that it helps identify the areas of improvement and take corrective measures to fix them. Implementing an organization-wide TQM process reduces waste, and helps allocate resources for maximum productivity.
3. Strong Brand Image
A positive brand image significantly contributes to sales, profits, and success. Total Quality Management helps companies maintain consistency in the quality of products and services which helps build trust and create a loyal customer base.
4. Lower Defects
With Total Quality Management, businesses benefit from lower product defects, reduced overhead costs, and standardized production processes. Lower defects contribute to higher customer satisfaction, increased revenue, and increased market share.
5. Promotes Cultural Values
Cultural values play an important role in any organization’s success. TQM promotes and nurtures cultural values in employees across all departments whether production, sales, customer support to finance. As a result, your customers feel valued and appreciated.
Drawbacks of Total Quality Management
1. Support from Administration
Implementing Total Quality Management throughout the organization requires support and cooperation from the administration at all levels. Without support from the administration, there is a risk of partial implementation and failure. The company may not achieve the intended results.
2. Added Costs
Another major drawback of TQM Management is the added costs. There are several costs associated with it such as training of employees, certifications from the certification authorities, infrastructure costs, and consultation costs, among others. Thus, small companies may find it difficult to implement it.
3. Longer Implementation Time
TQM Management cannot be implemented overnight. It requires a considerable amount of time for planning, deployment, and training. Without a lack of sufficient time, the company may waste its time, resources, and money achieving nothing.
4. Resource Scarcity
Many small companies have limited resources — assets, time, manpower, and skills. Such companies may find it difficult to allocate sufficient resources. Excessively allocating their resources for TQM can cause resource scarcity and they may find it difficult to run their day-to-day activities such as manufacturing, supply chain, human resource management, and so on.
5. Employee Resistance
Like any other major change or restructuring, the implementation of Total Quality Management (TQM) can lead to employee resistance to change. The management will need to take a series of steps to persuade employees to clear confusion, reduce waste of time, and achieve the intended results.
Role of ERP Software in TQM Management
Enterprise Resource Planning (ERP) is a business planning and management software that collects and analyzes data from all aspects of the organization and provides powerful data & process standardization capabilities to achieve intended results.
Sage X3 ERP Software plays a crucial role in the TQM Management:
1. Consistency in Quality
ERP provides automated quality control tools to monitor the product quality at every level starting from procurement of raw materials. This allows consistency throughout the manufacturing process and only high-quality products reach the final consumer.
2. Quality Control Parameters
Quality Parameters are quantifiable properties that make it easier to evaluate and compare the quality of the product, identify deficiencies, and investigate product defects. Whenever a product quality control parameter is breached, the system will trigger an alert and notify the production team.
3. Defects Management System
Achieving Total Quality Management may not be possible without a proper defects management system. ERP brings traceability into the manufacturing process. When a customer reports a defect with the product, your company can track the source of the defect and take targeted measures to fix it.
4. Lot Tracking
ERP comes with powerful Lot tracking functionality that classifies your products based on similar characteristics such as ingredients used, plant location, manufacturing date, and expiration date. With many tracking systems in place, the company can recall goods in an emergency.
5. Regulatory Compliance
ERP reduces the risk of non-compliance by aligning your product manufacturing process with the policies and frameworks framed by government regulatory bodies. In this way, you can reduce fines, penalties, and legal proceedings.
10 Steps for Adopting TQM Management
The steps for implementing TQM Management are as follows:
- Gather feedback from your customers and employees to assess product deficiencies
- Conduct regular meetings with the Product Team to assess your product technicalities
- Identify and make a list of your company’s core values and vision
- Gauge your competitor’s strategies for dealing with any quality issues
- Allocate sufficient resources (both assets & employees) for total quality management
- If required, hire an external consultation firm to discuss any quality issues
- Build a roadmap for the implementation of TQM Management
- Perform the actual implementation
- Gather feedback from employees and customers about any product quality issues
- Apply for international certifications, if required
FAQs
1. What is the Definition of Total Quality Management?
Total Quality Management meaning a structured approach that focuses on transforming the internal processes at various organizational levels through the creation of a solid Quality Assurance Plan, strict adherence to it, and continuous improvement in the products and services.
2. What is a TQM Diagram?
TQM Diagram is a flowchart that depicts various organization-wide processes to enable decision-makers to develop quality products and services and make improvements to the existing workflow. It helps the organization achieve quality excellence, encourage equality and discipline, and adhere to strict quality standards to maintain consistency.
3. What Role Do Employees Play in Total Quality Management?
Total Quality Management is a management approach that is not limited to a specific department or team. Instead, its success depends on the active role and participation of every employee to achieve quality improvement. For example, employees will have to make changes to their work processes, identify and reduce inefficiencies, and adhere to the quality assurance plan.
4. Can TQM Principles be Applied to Any Industry?
TQM principles can be applied to any industry, such as manufacturing, chemical, automotive, agriculture, food & beverage, and services. The ultimate goal of TQM is to develop creative solutions to improve the final output quality and customer satisfaction.
5. What Role Does ERP Software Play in TQM Management?
Enterprise Resource Planning (ERP) software collects and analyzes data from all aspects of the production process. ERP implementation provides automated quality control tools to monitor product quality through various quality parameters at every level starting from procurement of raw materials, and achieve the intended quality improvement objectives.