TOTAL QUALITY MANAGEMENT 5575

Approved Study Center

ALLAMA IQAL OPEN UNIVERSITY (AIOU)

ASSIGNMENT # 02
COURSE: TOTAL QUALITY MANAGEMENT (5575)
Level Executive MBA/MPA (3rd) Semester: SPRING 2010

Submitted to

MR.SALIM ADMED

Submitted By

Idreesiub7@gmail.com Muhammad Idrees

Roll # AD514761
Cell# 0300-6719422

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ACKNOWLEDGEMENT

I would like to thank first of all my teacher Mr.Salim Ahmed for his kind
briefing regarding this Assignment.

My teachers and internet were a big source in accomplishment of my

Assignment.

My class fellows also deserve an Appreciation and Gesture of

thankfulness since their guidance also helped a lot.

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5575

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IMPORTANCE OF TQM IN SERVICE ORGANIZATION

Introduction to Total Quality Management

It is important to understand the definition of the term quality before discussing the total
quality management, which is a much more broader term.

Definition of Quality

There is no single definition of the term quality. Quality means different to different
people such as:

1. Customer-Based: Fitness for use, meeting customer expectations.

2. Manufacturing-Based: Conforming to design, specifications, or requirements.

Having no defects. Quality [means] conformance to requirements. Quality is the degree
to which a specific product conforms to a design or specification.

3. Product-Based: The product has something that other similar products do not that
adds value in other words quality refers to the amounts of the unpriced attributes
contained in each unit of the priced attribute

4. Value-Based: The product is the best combination of price and features or quality
means best for certain customer conditions. These conditions are (a) the actual use and
(b) the selling price of the product.”

5. Transcendent: It is not clear what it is, but it is something good or it may also be
defined as quality is neither mind nor matter, but a third entity independent of the
two…even through Quality cannot be defined, you know what it is.”

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Definition of Total Quality Management

TQM is the enhancement to the traditional way of doing business.

It is a proven technique to guarantee survival in the world-class competition.
TQM is for the most part common sense. Analyzing three words (TQM), we have:

Total—Made up of the whole

Quality—Degree of excellence a product or service provides
Management—Act, art, or manner of handling, controlling, directing, etc.

Therefore, TQM is the art of managing the whole to achieve the excellence.

TQM is defined as both philosophy and a set of guiding principles that represents the
foundation of a continuously improving organization.

It is the application of quantitative methods and human resources to improve all the
processes within an organization and exceed customer needs now and in future.

TQM integrates fundamental management techniques, existing improvement efforts,

and technical tools under disciplined approach.

1. Introduction
The importance of a sound quality system within an organization has increased rapidly
in recent years. Many discussions on the subject focus on the concept of total quality
management (TQM) and TQM is the subject of a great many publications concerning
quality in general. However, the content of these articles and the accent they present,
differ to a considerable degree. Some emphasize for example the importance of
conformance to the requirements and demands of the customer, while others
emphasize the importance of management commitment.
Questions arising as a result of this situation are: What is the overall concept of TQM?
Is it possible to summarize it in a single definition? Is it a concept built up of a number of
basic elements?
A company which asked itself these questions and decided to look for answers

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was DAF. DAF is a manufacturer of commercial vehicles with approximately 15,000

employees and production facilities in The Netherlands, Great Britain and Belgium. It is
a company which realized sales of 53,791 vehicles in 1990. The need for an answer to
the above questions on TQM arose within the Corporate Quality Department of DAF,
the department concerned with the structuring and improvement of the company's
quality systems. Due to the increasing importance, both in literature and in practice, of
the concept of TQM, the need arose for a clearer understanding of this subject in order
to enable an assessment of its role in the formulation of long-term quality-objectives.
The description of an overall concept of TQM may initially be a theoretical one,
leading to queries as to the practical value within organizations: the place in which
quality must be realized. TQM must not be a 'story' alone. The TQM concept must be
translated into practice in such a way that it can be exploited by an organization.

DAF's requirements were presented to the Department of Technology & Qrganization,

Twente Quality Center of the School of Management Studies at the University of
Twente, The Netherlands. Research has been carried out to obtain answers to the
questions. In a series of two articles the research and its results will be presented.
The research was based on an extensive literature study concerning the basic elements
of TQM. The literature study included both basic articles on the concept of quality as
well as the latest (state-of-the-art) publications. This provided a perception of the
historical development of quality management and enabled an understanding of the
basic elements of which TQM is composed.
This, the first of two articles resulting from the research, deals with the theoretical
backgrounds, the concept of TQM and the TQM model which has been developed. The
second article describes the translation of the TQM model into a diagnostical instrument
for purposes of determining the status of TQM within (part of) an organization. The
second article also reports on the cases in which the instrument has been applied.
The results are promising, particularly with respect to the use of the instrument for the
initiation and continuation of improvement processes.
As already mentioned, this first article reports on the extensive literature study
concerning TQM and the use of its results for the development of the final TQM model.

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For this purpose. Section 2 places TQM in a historical perspective and provides a view
of the development of quality management from three different perspectives.
Subsequently, in Section 3, the TQM model comprising eight basic elements is
presented. Section 4 describes the operationalization of these generalized basic
elements of TQM towards more concrete concepts, methods and techniques. In Section
5, the concepts, methods and techniques are allocated to specific application areas
within an organization. Section 6 provides the closing of this initial article with a number
of conclusions.
2. Quality management in a historical perspective
The development of a systematic approach to quality management can be defined in
four stages:
(1) quality inspection (QI);
(2) quality assurance (QA);
(3) total quality control (TQC);
(4) total quality management (TQM).
In literature (e.g. Feigenbaum, 1983; Foster & Whittle, 1989) a number of characteristics
can be perceived for each phase, as shown in Table 1. In order to distinguish more
specific characteristics per phase, it was decided to analyse the various phases from
three perspectives (Bossink, 1991).
2.1. Utilization and technical perspective
This perspective centres on the degree to which an organization concentrates on
conformance to the specifications and requirements of the customer (utilization) and the
degree to which the relevant capabilities and limitations concerning the production of
goods and services are taken into account (technical).

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2.2. Cultural and structural perspective

The cultural and structural perspective considers which standards affecting quality
management are established within the organizational culture and how the
organizational form of the quality system is realized within the structure of the
organization.
2.3. Maintenance, improvement and innovation perspective
The third perspective questions the degree and manner in which an organization pays
attention to the maintenance, improvement and innovation of products, processes and
the organization.
Analysis of the four phases from these three perspectives shows that the centre of
attention concerning quality management changes over time. During the QI and QA
phases, the emphasis is on the first perspective and on the technical aspect in
particular.
Quality is considered to the entity to be attained by technical means.
In the TQC phase, attention is centred on the cultural and structural perspective.
The idea that the required quality has to be attained collectively and that everyone
should work according to the relevant specifications and requirements plays an

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important role in this phase. The subject of attention in the realization of quality is the
organization as a whole.
In the TQM phase, the centre of attention shifts towards the maintenance, improvement
and innovation perspective. In this phase, relatively considerable attention is paid
to the maintenance, improvement and innovation of the products produced by the
organization and to the processes and organization by means of which this is realized.
The fact that the centre of attention shifts does not mean, however, that the other
perspectives are ignored in any phase. Table 2 lists the characteristics which can be
distinguished for the various phases on the basis of the three perspectives. The
perspective Subject to the most attention per phase is indicated by double lines.

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3. The TQM model: basic elements

The development of quality management and its analysis from the viewpoint of the three
perspectives, leads to the definition of a number of basic elements of TQM. TQM
appears
to be a concept which is difficult to summarize in a short way. Although the starting point
of quality management is simple: the delivery of a product which satisfies the needs of
the customer, the concept of TQM with which an organization can achieve this result is
somewhat more complicated.
The eight basic elements of TQM which can be distinguished are:
(a) Totality. Quality management is concerned with an organization as a whole. It is
everyone's responsibility that products finally leaving the organization, comply to the
customer's specifications and requirements. The personnel in both the primary and
secondary processes as well as the decision makers and the executors of these
decisions all have their responsibilities in the realization of quality. It is thus vital that all
activities in the organization are mutually harmonized and coordinated in order to

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achieve the desired product. In this aspect, it is important that the organization is looked
upon as an open system which operates on an exchange basis with its environment.
The organization must be aware of this exchange and must take account of its
consequences on the quality system.
Examples are for instance environmental regulations which lead to limitations in the way
an organization functions or consumer organizations promoting the customer interests.
(b) Line-staff relationship. Although quality is realized by the organization as a whole,
the actual responsibility for the quality of a product lies within the line organization.
The quality department has an advisory and supporting role in the realization and
improvement of quality.
(c) Technological perspective. During the development process, an organization
takes into account its existing possibilities and limitations in manufacturing goods and
services.
Possibilities and limitations arise due to both decisions made within the organization
and external factors. A decision to mass-production precludes the opportunity of speedy
implementation of product changes and limits an organization's ability to respond to
changing market requirements. An external factor such as environmental regulations
may bring limitations, for example in the requirements for separation of waste materials;
at the same time, however, a quick reaction to such regulations may offer an
opportunity to gain a lead on the competition. An organization must employ all available
creativity in order to create new opportunities, minimize limitations or turn them into
opportunities.
(d) Cultural implantation. It has to be a habit of everyone in the organization to
continuously consider improvement of the products and the processes of the
organization.
This habit is anchored within the organization's culture. Personnel are aware that they
must make an effort towards improvement each and every day. The final goal, the
perfect situation, does not exist: it can always be done better. Improvements are related
to the working environment of each employee as well as to the groups within which they
function.

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(e) Management commitment. Quality management forms a part of the task of every
manager within an organization. Management functions as supporting and stimulating
factor in the quality improvement process. Managers are aware of their responsibilities
concerning quality management and know what this means in relation to the
performance of their (daily) tasks. Top management is responsible for the formulation of
a quality policy which is integrated within the organization's overall policy. This quality
policy must be implemented by management itself by translating the quality objectives
and long-term quality plans into concrete short-term action plans. Middle management
plays an important role here. In addition to a positive approach to quality, management
must demonstrate this by word and deed and must possess an excellent ability to
accept change, considering the fast changes in their surroundings.
(f) Upstream emphasis. The realization of quality in upstream processes such as
market research and research and development receives considerable attention. The
underlying idea is that the quality of a product can never exceed that of its design.
Accurate and thorough market research, results in a good understanding of the
customer's requirements and demands. An organization thus knows what is wanted
and, by means of a good R & D programme, can translate these customer requirements
into a product satisfying them.This translation (of the sometimes rather abstract
customer requirements), into product specifications and design, demands a great deal
of attention. The final objective must be to bring a product onto the market that is fully
developed (without teething troubles) and satisfies the desires and requirements of the
customer.
(g) Market-in approach. The market-in approach (orientation to the customers'
requirements) is applied throughout the organization. All activities performed on behalf
of the organization are centered around the demands and requirements of the external
customer.

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1 = Market research, 2 = specification, 3 = development, 4 = manufacturing preparation,

5 = manufacturing, 6 = distribution and service, s.a. = supporting activities, c.r.a. =
conceptual/regulatory activities, t.m.a. = topmanagement activities.
In addition to these, the demands and requirements of the internal customers have to
be considered. The concept of internal supplier-customer relationships must be strongly
developed. A supplier can only satisfy customers' requirements if these are made
known to him. This implies that the customer must inform the supplier of his demands
and requirements and the supplier must confirm the degree to which they can be met.
Good communication between personnel within the organization as well as between the
organization and its environment is thus essential.

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(h) Integration. Maintenance, improvement and innovation of the product produced by

the organization as well as the processes and organization involved, are treated
integrally.
The underlying idea is that the characteristics of the product, process and organization
leading to customer satisfaction are achieved not only by maintenance and
improvement but also by innovation. Competitive strength in the current market is
sustained by maintenance and improvement of existing products. If innovation is
neglected, an organization runs the risk of losing its competitive strength in future
markets. Consider, for example, the producer of the perfect record player who now
sees his market stagnating due to the introduction of the CD-player.

4. Making the TQM model operational

Next question is how the eight basic elements can be made operational for practical
use within an organization. In the research, this has been done by means of concepts,
methods and techniques. Determining the presence or absence of concepts, methods
and techniques supporting the quality management of an organization, provides a
means of determining the degree and way of implementation of the TQM concept.

The selection of these three categories is taken from Zink (1990). In the conducted
research the terms are defined as follows:
1. Concept: general basic idea derived from one or more basic elements of TQM.
An example is the Zero-Defects concept (Crosby, 1987).
2. Method: a fixed, well-considered way of working in order to attain an objective
resulting from TQM. Examples of methods for achieving quality objectives are quality
circles, quality manuals and policy deployment.
3. Technique: a compilation of operations or actions of a recipe-like nature which can
be applied relatively quickly and which provides an understanding of a situation or
problem area such that the solution of a problem can be seen or is obtainable.
Examples of techniques to be used are: Pareto-analysis, FTA and FMEA.
In total, 63 concepts, methods and techniques supporting quality management were
examined. The question was then posed within which parts of the organization these

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concepts, methods and techniques might be found/implemented. This question will be

answered in the following section.
5. Application areas of the TQM model
Based on the quality management model of Vorstman (1990), the 63 concepts,
methods and techniques were allocated among four categories of application areas:
1. Primary activities: the operational activities which have a direct contribution to
the realization of the product. These are, in sequence: market research, specification,
development, manufacturing preparation, manufacturing and distribution and service.
2. Supporting activities: the activities which are required in order to be able to perform
the primary activities. Examples of these are: book-keeping, personnel management
and manufacturing control.
3. Conceptuallregulatory activities: conceptual activities are those related to the
creation and execution of the business plan in which the objectives to be realized are
formulated and the choices are made concerning, for instance, product/market
combinations and allocation of resources. Regulatory activities are those which ensure
that the results realized by the primary and supporting activities conform to the
prognosis of results in the business plan.
4. Top-management activities: these are the activities required to manage the
organization as a whole: a task of top management, who have an overview of the whole
organization. The most important management activities are: the formulation of policy,
the creation of a management structure, the allocation of resources and the monitoring
of the ongoing processes in the organization.
The purpose of this control-model is to enable the optimal execution and harmonization
of the various activities within processes, in the most efFective and efficient way, in
order to ensure that the final product is such as desired by the customer.
Table 3 shows in which part(s) of an organization, the various concepts, methods and
techniques can be found/implemented. It is outside the scope of this article to address
further details of the various concepts, methods and techniques listed in Table 3 (some
are also treated under different names in the literature). Furthermore, neither the
relative importance nor the relationship between the concepts, methods and techniques
is indicated.

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The purpose of Table 3 is to illustrate that the presence/absence of these concepts.

methods and techniques in (a particular part of) an organization indicates that the
concept of TQM is (or is not) in use. The table also provides an overview of the many
and different areas of application of TQM.
The majority of the 63 concepts, methods and techniques considered here are not
universally applicable. They are frequently specific to one or two application areas
(Table3: the appHcational potential of a concept, method or technique is indicated by an
asterisk).
6. Conclusions
TQM appears to be a concept which is difficult to summarize in a short definition. A
description by means of eight basic elements appears to be a workable solution.
An organization wishing to formulate quality objectives can adopt these generalized
basic elements as a starting point. By taking the specific and less-specific
characteristics of the organization into account, concrete quality objectives can be
derived from the basic elements such that the TQM concept can be adopted by an
organization in a suitable way.
The operationalization of TQM by means of concepts, methods and techniques as
well as their allocation to different parts of an organization, offers the opportunity of
working towards a diagnostical instrument with which the status of TQM within (a part
of) an organization can be assessed and evaluated and on the basis of which quality
improvement activities can be initiated and continued.
The development of this instrument and its use in two cases will be described in the
second article.
Bibliography
BOSSINK, B.A.G. (1991) Afstudeerscriptie: Zeg 'ns Aaa....' (Enschede, Universiteit
Twente).
CROSBY, P . B . (1984) Quality Without Tears (New York, McGraw-Hill).
FEIGENBAUM, A.V. (1983) Total Quality Control, 3rd edition (New York, McGraw-Hill).
FOSTER, M . & WHITTLE, S. (1989) The quality management maze. Total Quality
Management Magazine, 1(3).
IMAI, M . (1986) Kaizen, 1st edition (New York, Random House Business Division).

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JURAN, J.M. (1962) Managerial Breakthrough (New York, McGraw-Hill).

VoRSTMAN, H.R. (1990) Produktmarktbeleid en kwaliteit, eerste druk (Alphen aan de
Rijn, Samsom).
ZiNK, K.J. & SCHILDKNECHT, R. (1990) State-of-the-art of total quality management in
the Federal Republic of
Germany, in: B.G. DALE & A.R.T. WILLIAMS (Eds) Education, Training and Research
in Total Quality
Management (Bedford, IFS Publications).
ZucCHELLi, F. (1989) Total quality and quality function deployment, in: EFQM,
European Quality Management
Forum (Bedford, IFS Publications).

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TQM and Six Sigma –the Role and Impact on Service Organization

1. Introduction
Quality is not only a strategic weapon for competing in the current marketplace,
but it also means pleasing consumers, not just protecting them from annoyances.
Therefore, a company’s specific advantage is to identify and then compete on
one or more of the dimensions of quality.
Many organizations have come to realize that achieving zero-defect goods and
services can lead not only to customer satisfaction but also to improved internal
efficiency and reduced costs. The Six Sigma quality and management
programme has been a key basis for the success of multinational companies
such as Motorola. According to recent figures, fewer than 10 percent of
companies are adopting a Six Sigma program to the point where it is going to
make any sort of significant difference to the bottom line in any meaningful period
of time.

2. The TQM philosophy

Over the past decade, companies experienced dramatic changes in business
environment characterized by such phenomenon as increasing consumer
consciousness of quality, rapid technology transfer, globalization and low cost
competition. After more than a year of continuous decline on international trade, the
global economy begins to recover but this news can block the development and also
can block policies adopted in order not to fall into a new crisis (Anagnoste, S. & Agoston
S. 2009). In response to these challenges,
many companies have joined the quality movement and implemented various quality
improvement initiatives as a means to enhanced competitiveness. The complexities of
modern business require approaches that are more sophisticated.
TQM is a revolutionary management philosophy that requires radical and pervasive
change within the firm. The strength of TQM lies in successfully combining the scientific
/system-oriented school of management with that of the human behaviour/social system

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school of management. It relies on systems, but unlike the scientific school of

management, it does not assume that people will fit into system.
Therefore, in designing structures and systems, human emotions and needs are taken
into account. The human behaviour/social system school of management unlike the
scientific school is based on the premise that employees are essentially honorable;
therefore, correction is replaced by cooperation. Employees are allowed to take initiative
and participate in the decision-making processes directly relevant to them and as such
deviation from tightly defined rules does not result in sanction provided that there is no
transgression against the organisational values. The organisation is viewed as a system
of cultural interrelationships rather than a series of tasks, procedures and rules.Because
quality means both producing products to specifications and
meeting customer’s expectations, the needs of customers becomes a key input to TQM.
A review of the literature also shows that, according to some authors, TQM is rather
than a mere set of factors, a network of interdependent components, a management
system consisting of critical factors, techniques and tools. Figure 1 show the benefits
obtained by service organizations after the implementation on TQM.

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The TQM approach is characterized by an orientation towards quality which helps to

prevent problems and to produce continuous improvement of the existing situation. This
attention should permeate all levels of the company right from the top management
down and all company functions (Forza, C. & Filippini, R. 1998, p. 2).
Many organizations have difficulties with measuring TQM progress,which is one of the
reasons for the failure of attempts to introduce TQM (Boyce, 1992 cited in Arumugam,
V. et al., 2009, p. 49). There is support for conducting a cultural assessment before
implementing TQM or similar initiatives in order to identify possible barriers and to
assist in designing the implementation programme (Davies et al., 2007 cited in
Arumugam, V. et al., 2009, p. 49).
TQM can be studied from three different approaches: contributions from quality leaders,
formal evaluation models and empirical research. Taking the initial research as a basis,
the critical factors of TQM found in the literature vary from one author to another,

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although there is a common core, formed by the following requirements: customer

focus, leadership, quality planning, management based on facts, continuous
improvement, human resource management (involvement of all members, training, work
teams and communication systems), learning, process management, cooperation with
suppliers and organizational awareness and concern for the social and environmental
context (Tari,J.J. 2005, p.183).
A company’s success in the long term depends on how effectively it satisfies its
customers’ needs on a constant basis. Therefore, TQM’s success is determined by how
willing the organization is to change and whether it uses customer satisfaction as a
measure in assessing the success of its decisions and actions (Madu and Kuei, 1993
cited in Sila,I. 2007, p. 87).
3. The Six Sigma methodology
Six Sigma is a process-focused and data driven methodology aimed at near elimination
of defects in all processes (i.e. manufacturing, service and transactional) which are
critical to customers. As a powerful business strategy, Six Sigma has been around for
almost 20 years and has grown exponentially in financial services sector during the past
seven years or so in the USA and probably four years in the UK. The financial service
companies which have made significant impact to the bottom-line include Citigroup,
Bank of America, American Express, J.P. Morgan Chase, Zurich Financial Services,
HSBC, Credit Suisse,Royal Bank of Scotland, Barclays Bank to name but a few here.
Although six sigma was developed in the late 1980’s in Motorola, it has taken several
years for service-oriented companies (such as financial services) to embark on six
sigma initiative (Antony, J., 2007).
Six Sigma is a statistical measure whereby it measures variation in process around its
mean. It considers any data point that is beyond customer specified limit, as defect. The
measure is quite proven and one could always assume that there will be 3.4 defects per
million opportunities to have a process at Six Sigma levels.
Six Sigma has evolved into an organizational approach to operational excellence by
recognizing that it:
1. Fundamentally changes an organization’s culture.
2. Has proven successful in all industries despite varying processes and functions.

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3. Is built on principles such as customer focus, proactive management (versus fire-

fighting), and measurement of variation; all essential to achieving world-class
operational capability.
Six Sigma enterprises are intensely customer-focused and reliable and consistent in the
delivery of their products and services.
Six Sigma drive for defect reduction, process improvement and customer satisfaction
are based on the “statistical thinking” paradigm, a philosophy of action and learning
based on process, variation and data. Statistical thinking provides practitioners with the
means to view
Processes holistically (Kumar, M. et al., 2008, p. 882). There is a logical thought
progression from process-variation-data to define-measure analyze -improve-control
(DMAIC) shown in figure 2.

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Figure 2. DMAIC Implementation Approach: Six Sigma Methodology

When all key processes within a business are completed for each of these five each
phases, the business will naturally reach the Six Sigma quality. To ensure the success
of a DMAIC methodology, the company’s top leaders must undertake the role of
Champion, giving active support and encouragement to all business process owners.
The process owners in the specific Six Sigma project implementation must emphasize
the bottom-line, which has a profit contribution to the business (Byrne, 2003 cited in
Cheng, J.L. 2008, p. 185).

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The key elements of Six Sigma implementation which service organizations must take
in consideration are:
• Customer ® Customer Satisfaction;
• The customer is the center of the universe ® He defines the quality;
• Process ® Think from outside to inside;
• Quality requires watching your business from customer's perspective rather than
yours. With this knowledge can add value significantly or can improve the process of
Customer.
Perspective® CTQ's (critical to quality are customer needs translated into critical
process requirements that are specific and measurable. A fully developed CTQ has five
elements: Output Characteristic, Project Output Metric, Target, Specification/Tolerance
Limits and Defect Definition);
• Employee ® Management commitment;
• People create results. Fundamentally in quality approach is the involvement of all
members/employees. The company is committed to providing opportunities and
incentives for employees who focus their talent and energy in achieving customer
satisfaction ® For all employees. This is why it can be beneficial to embed Black Belts in
business units, where they can monitor processes regularly, collect feedback and make
sound, data-based decisions. Six Sigma identifies several key roles for its successful
implementation such as: Six Sigma Champions, Six Sigma Master Black Belt, Black
Belts, Six Sigma Green Belt, Six Sigma Yellow Belt.

4. Linking TQM and Six Sigma to business strategy of service

organizations
Services are by nature very often bound by time in terms of the processes that
are run and lead to the delivery of an outcome that benefits a customer. It is
difficult to argue that any change management philosophy or methodology is
new. TQM development has followed two major strands, namely mechanistic
perspective TQM and organic perspective TQM. Parallels can be drawn with the

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current measures and process focus of Six Sigma, along with its tentative people
development. It is contended that Six Sigma is a specific development of TQM,
and that Six Sigma currently belongs to the mechanistic development of TQM,
although it may be developed in a more holistic manner. Many of the
organizations currently claiming success from Six Sigma have also long
established TQM programmes, e.g. Motorola, GE, Nortel, Boeing
(Henderson and Evans, 2000 cited in McAdam, R. & Lafferty, B. 2004, p. 533).
It is quite a common view among many people engaged in service organizations
that Six Sigma requires complicated statistical tools and techniques. The truth is
that Six Sigma is not about a collection of statistical tools and techniques. In fact,
service organizations do not simply need many of the tools and techniques of the
Six Sigma toolbox. The majority of the process and quality related problems in
service organizations can be readily tackled using the simple problemsolving
tools of Six Sigma such as process mapping, cause and effect analysis, Pareto
analysis, control charts and so on (Kumar, M. et al., 2008, p. 884).
The main weakness of traditional TQM concepts is the exclusive focus on
customer requirements. Six Sigma in contrast focuses on quality from both the
customer’s and the investor’s perspectives with the aim to meet customer
requirements fully and profitably. Nevertheless, like TQM, Six Sigma requires a
strong incorporation of the corporate control system to enable companies to
objectively measure and monitor their long-term development within, and monetary
outcome of TQM using statistical techniques (Wessel, G. & Burcher, P. 2004, p. 265).
There is a cause-and-effect relationship between the total quality management
practices and corporate performance, measured by employee relations, productivity,
customer satisfaction, or profitability (Kumar, V. et al., 2009, p. 26).
The results are:
Better employee relations. Employees experienced more job satisfaction, there was a
higher rate of attendance, and there was less turnover, absenteeism and accidents.

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Improved operating procedures. Companies increased the reliability and on-time

delivery of their products or services and reduced errors product lead-time, and cost of
quality.
Greater customer satisfaction. There were fewer customer complaints and a greater
number of customers stayed with the company.
Increased financial performance. Each company also improved its market share and
increased profitability.
Many processes in the finance sector can be performed in a standardized way,
especially in the field of processing customer related outputs like payments/credit cards
transactions, processes using self service devices like ATMs, securities settlement and
loan approval processing. A similar potential can be found in the insurance sector, e.g.
application handling, contract issuing, and processing of claims (Puaar, 2006; Ruggier,
2006, cited in Heckl, Det al., 2010, p. 5). Table 1 shows how an organization can pursue
itsbusiness strategy across the similarities and differences between TQM and Six
Sigma.

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Since the goal of any organization is to make profits, Six Sigma projects make business
processes profitable while attacking variability which leads to high scrap rate, high
rework rate, low productivity etc. In every single project, the link between the project
objectives and the business strategy should be identified (Antony J. & Banuelas R.
2002,p. 23).

Conclusion
TQM and Six Sigma are two different approaches that can be very strong together if
they are implemented in a service organization with a good business strategy. While
TQM is focused on customer, Six Sigma focused on improving quality and obtaining
zero defects in all the processes of an organization. While TQM it advocates for
increasing customer satisfaction, Six Sigma can act as an enabler for cultural change.
Nowadays because of the global crisis, almost all service organizations have suffered
and it’s very important for them to know what their customers think about the services
offered and how they can improve their process with the objective of increasing their
customer’s satisfaction, which is the goal of any competitive organization.

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