Total Quality Management [TQM]

Article Review and Case Study

TQM Consultant - Training Article

Total Quality Management (TQM) has been one of the most influential methods used
in managing business processes over the last 30 years. It has been incorporated as a vital
component, in the management systems of some of the world's most successful
enterprises.
In trying to define TQM is it is well worth considering the relevance and meaning of the
three words in its title.

Total - The responsibility for achieving Quality rests with everyone a business no matter
what their function. It recognizes the necessity to develop processes across the business,
that together lead to the reliable delivery of exact, agreed customer requirements. This
will achieve the most competitive cost position and a higher return on investment

Quality - The prime task of any business is to understand the needs of the customer, then
deliver the product or service at the agreed time, place and price, on every occasion. This
will retain current customers, assist in acquiring new ones and lead to a subsequent
increase in market share.

Management - Top management lead the drive to achieve quality for customers, by
communicating the business vision and values to all employees; ensuring the right
business processes are in place; introducing and maintaining a continuous improvement
culture.

To gain an understanding of TQM, it is worth looking at how it developed and the impact
of some of the main management "gurus" over the years.

The History of TQM

Along with many other modern management practices TQM originated and was
developed within Japanese industry after the Second World War.
Japan was a defeated nation with few natural resources and an inability to feed a
population of 90 million, by it's self. The future lay in successfully exporting consumer
products across the world market, yet it had a reputation for shoddy goods and
management systems that were described as "feudal" and "despotic".

General Douglas McArthur realized the need for radical change and was responsible for
the regeneration of the Japanese economy. Key to this was the dismissal of the old
management and their systems, replacing them with younger men capable of making the
changes needed to develop their economy.
As a result the Union of Japanese Scientists and Engineers (JUSE) was formed, one of
their first actions was to invite a well-known American statistician Dr. W. Edwards
Deming, to present his ideas to them. Deming addressed the top business leaders in
Japan, including managers from Companies which are now household names, Sony,
Nissan, Mitsubishi and Toyota. They introduced new management methods, TQM being
a key one. This led to Japan being the world leader in quality and productivity.
Deming had made a highly significant contribution during the war in increasing
America's industrial efficiency.
After the war was won, although well received by engineers and scientists, top
management did not respond to his ideas. Industry went back to the old established ways
of trying to meet consumer market opportunities.
In Japan however Deming found a much more receptive audience, his ideas once
implemented led during the 80s, to American business being battered by Japan's superior
industrial practices. In order to compete and survive, the rest of the world was forced to
take his ideas seriously, adopting "Japanese methods" such as TQM and Lean
Manufacturing.

The Quality Gurus

TQM evolved and it is worth considering the beliefs of the main quality gurus who have
added to the mix, starting with Deming himself.

Edward Deming
Deming's concepts of process management began with the use of statistical quality
control. His real contribution was his ability to cut through academic theory and present
ideas in a simple way that was meaningful and practical right down to the shopfloor.
He interpreted quality in terms of reliability, dependability, predictability and consistency
of product and service. He saw quality improvement as being analogous to reduction in
process variation. By reducing this with the help of statistical control methods, variation
in product quality is also reduced. The fact that processes are now under better control
also means lower cost and improved productivity.

Deming's approach started with understanding the causes of two types of variation,

1. External influences on the process which he described as uncontrolled variation due to

"special causes". Examples are changes of operation, procedures, raw materials. All these
interrupt the normal pattern of operation.

2. Controlled variations which are due to chance, random, or "common causes". All of
these by definition are due to the process itself, it's design or installation.

For Deming, quality improvement must begin with identification of the two types of
variation. The next stage is to eliminate the "special causes" and only then work on the
"common causes". Identification and elimination of these is assisted by the use of
Statistical Process Control (SPC) and various forms of simple control charts designed to
be used on a shop floor environment. Management improves the process by re-designing
it to improve it's capability to meet customer needs.

Deming also stressed the crucial importance of the need for a deep understanding of
businesses work processes. Without this, true progress will not be made.
Over the years Deming thoughts expanded, to cover issues of managing people,
leadership and training in order to achieve quality goals.
Joseph Juran
Juran published "The Quality Control Handbook" in 1950 which became the standard
reference book on quality world-wide. Juran developed his TQM philosophy around his
"quality trilogy"

• Quality planning: the process for preparing to meet the quality goals
• Quality control: the process for meeting quality goals through operations
• Quality improvement: the process for break through levels of performance

Both he and Deming correctly stressed the need to involve people throughout the
organization in quality improvement but in particular that most quality issues are down to
management dealing with systems. The emphasis is on getting the system correct rather
than blaming failure on operator error. Juran particularly emphasized the use of quality
teams and training them in measurement and problem solving.

Kaoru Ishikawa
Ishikawa is regarded as the father of the quality circle approach which was involved
building shop floor teams. His legacy is more directly linked to hands on, practical
techniques and promoted many of the tools and techniques of measurement, analysis and
problem solving commonly used as part of the TQM armory

These include:
Pareto analysis
Fishbone diagram (otherwise known as an Ishikawa diagram)
Stratification
Histograms
Control Charts
Scatter diagrams

Philip Crosby
Crosby did much to popularise the use of TQM. He first designed a highly successful
programme for ITT for whom he worked before setting up his own quality college and
consultancy firm. His training programme has been widely used by a large number of US.
and U.K. companies. Again, like other practitioners, his training is targeted at the
Management team as a whole and not just quality control specialist. Crosby presented his
"4 Absolutes of Quality" as the cornerstones of. his approach

1. Quality is defined as conformance to requirements, not just as goodness

2. Quality is achieved through prevention not appraisal
3. The quality performance standard is "zero defects" and is not defined by AQLs which
allow and build in acceptable levels of errors and inefficiencies
4. Quality is measured by the price of non-conformance
Crosby spread the word that, as in the title of his most popular book, "Quality is Free".
He believes that by setting up processes that are designed to prevent errors, by having
people trained and motivated to operate them as designed, not only will quality improve,
the costs of production will be reduced.

TQM in practice
In the 80's and 90's TQM was promoted in the U.S.A. through the "Baldridge Award"
and in Europe through the European Quality Award. The main elements in the practice of
TQM can be highlighted by the principles they used for auditing companies

These can be summed up as follows:

• The customer defines quality and this is the start point

• The senior management team is responsible for taking the lead in setting the
company
• strategy, values and culture with regard to quality
• Quality depends upon the design and execution of systems and processes to a high
standard
• A key part of the philosophy is that of the need for continuous improvement and
the need
• To reach for continually higher standards.
• Leadership in quality can only be achieved through management setting clear
goals and
• Forming the strategic and operational plans to achieve them.
• Understand the processes that drive your business and base your decisions on
facts
• Involve employees at all levels in quality improvement activities through
appropriate
• education, training and communication
• Key parts of quality systems include designing quality into processes and error
prevention
• The shortening of response times for all processes is an objective of improvement
efforts

• Companies should communicate with and involve their suppliers in achieving their
quality targets

TQM programmes adopt a similar approach to that below

1. Gain top level commitment in the business

2. Create the awareness of the need and opportunity for quality improvement and set
goals
3. Organize to achieve these goals, for example establishing a quality council, quality
improvement teams or project teams.
4. Train everyone in the organization, starting with the management team on the
philosophy and tools and techniques
5. Put the resources behind applying them
Quality programmes typically include:

• Identifying and confirming customer requirements and identifying problems and

opportunities in meeting these. Gain understanding in the concept of the internal
customer and meeting their requirements.
• Tools for understanding processes. For example, process modelling tools. How to build
error prevention into work processes
• Measurement tools, including check sheets, run charts, sampling and data collection.
The se of discreet or continuous data
• Calculating the "cost of quality" or "price of non-conformance" which defines the cost
saving opportunity
• Information analysis techniques such as run charts, Pareto charts, cause and effect
diagrams, flow charts
• Problem solving techniques such as brainstorming, tree diagrams
• Improvement Planning through teams and planning tools such as Gantt charts and other
project planning techniques.
• Controlling the work processes. The use of simple Statistical Process Control
techniques and control charts which can be used by shop floor personnel
• Communicate the results, recognize people who have been involved in success and
incorporate improvements into the company’s processes and systems
• Maintain the commitment to continuous improvement. After each success, go back and
look for more!

Business Systems
Many of the practitioners of TQM have successfully incorporated it into their culture,
business systems and processes. It has provided a means of planning and controlling their
business and auditing.

Evaluating TQM
Evidence and reports of the success of TQM over the years have been mixed. After the
strong uptake in the USA during the second half of the 80's and the early 90's there were
signs of discontent and waning of interest. This may have been a result of what was
perceived as the poor fit between TQM and the new industrial imperatives of the 1990's.
An article in the Economist observes

"The most ardent adherents of quality are finding that TQM does not readily blend with
wave after wave of restructuring, downsizing and re-engineering. And the challenge of
developing products and bringing them, to market even more swiftly, especially in
industries were prices are tumbling, such as computers, adds to the strain on TQM"

The experience of downsizing, business re-engineering undoubtedly created job

insecurity and demotivation amongst employees, thereby undermining the employee
involvement essential to any successful TQM programme. The experience of companies
such as Xerox and BA who both were regarded as having successful TQM programmes
found it difficult to maintain the level of commitment from their staff which is one of the
pre-requisites of continuing it's TQM programme.
Many companies found themselves in a position where they believed it necessary to
make major structural changes to their organizations in a relatively short space of time.
IBM, for example halved their workforce in a period of ten years. The comparison
between reengineering/ downsizing/de-layering on the one hand and TQM on the other is
an interesting one. Both types of process are aimed at meeting customer requirements in a
cost effective manner. Both concentrate on the processes necessary to deliver the outputs
to customers. They strongly diverge however in their strategies for change with TQM
adopting the continuous improvement route and re-engineering utilizing immediate,
radical, mega-change.

There have been debates about the success or otherwise of TQM programmes over the
years. Studies have been carried out, for example by the by the US General Accounts
Office covering American companies and in the UK by The Bradford Management
Centre. These have found that companies that had fully adopted Total Quality
Management programmes produced significantly better bottom line results than
comparable companies who had not taken that approach. A number of studies by
academics and consultants also identified that a common cause of failure of Total
Quality Management programmes was simply down to either poor management or a lack
of commitment to quality. There were, and still are, a large number of company directors
who believe that "quality is not their responsibility".

Total Quality Management today

Whilst the number of companies today who are openly practicing major programmes
under the banner of Total Quality Management has greatly declined from the late 80's and
early 90's, it's philosophy and management tools it utilizes are just as evident. To many
companies, it has become the way they manage and not "an external programme" which
was one of the objectives and measure of it's success. Likewise, companies recognizing
the need to improve their business performance are customising Total Quality
Management principles and practices to suit their own particular needs and circumstances
and building their own internal programmes. This has avoided
the potential dangers of the "grand programme" and jargon that can alienate the
employees. Alongside this is the success of 6 Sigma programmes which bear great
similarity in terms of their objectives, people involvement and the tools and techniques
used. In fact, some believe 6 Sigma to be a form of Total Quality Management.

The principles of Total Quality Management are as relevant to work process management
today as they have ever been, particularly when considered alongside learning from other
techniques such as lean manufacturing. It is essential that programmes are structured to
meet the needs and situations of individual companies. Whilst some may benefit from a
fully integrated programme, others have realized that there are significant payoffs to be
gained from a more modest or tailored approach designed to solve specific problems or
achieve defined, targeted improvements. The scope and scale are up to the client
company to choose
 ~ Dave Sowerbutts ~

Source: http://www.training-management.info/PDF/TQM%20Training.pdf

Article Review

Total Quality Management is the management approach that originated in 1950’s

and has steadily became more popular in 1980’s
Total Quality Management (or TQM) is a management concept coined by W. Edwards
Deming. The basis of TQM is to reduce the errors produced during the manufacturing or
service process, increase customer satisfaction, aim for modernization of equipment and
ensure workers have the highest level of training,

TOTAL QUALITY MANAGEMENT (TQM):

Total = Quality involves everyone and all activities in the company.

Quality = Conformance to Requirements (Meeting Customer Requirements).

Management = Quality can and must be managed.

TQM = A process for managing quality; it must be a continuous way of life; a

Philosophy of perpetual improvement in everything we do.

TQM as a Foundation:

TQM is the foundation for activities which include;

.
• Meeting Customer Requirements
• .Reducing Development Cycle Times
• .Just In Time/Demand Flow Manufacturing
• .Improvement Teams
• .Reducing Product and Service Costs

TQM was originated and developed within Japanese industry after the Second World
War. General Douglas McArthur realized the need for radical change and was
responsible for the regeneration of the Japanese economy. As a result the Union of
Japanese Scientists and Engineers (JUSE) was formed. They
Introduced new management methods, TQM being a key one. This led to Japan being the
world.
Dr. W. Edwards Deming had made a highly significant contribution during the second
world war in increasing America's industrial efficiency.
The Quality Gurus

Edward Deming’s concepts of process management began with the use of statistical
quality control. According to him improving quality will reduce expenses while
increasing productivity and market share. He interpreted quality in terms of reliability,
dependability, predictability and consistency of product and service. Improve constantly
and forever the system of production and service, to improve quality and productivity,
and thus constantly decrease costs. Dr. Deming considered anomalies in quality to be
variations outside the control limits of a process. Such variations could be attributed to
one-time events called "special causes" or to repeated events called "common causes"
He also focus on deep understanding of business work and processes. Without this, true
progress will not be made.

Joseph juran wrote a famous book “The Quality Control Handbook" in 1950
He also developed the "Juran's trilogy," an approach to cross-functional management that
is composed of three managerial processes: quality planning, quality control and quality
improvement. Juran particularly emphasized the use of quality teams and training them in
measurement and problem solving.

Kaoru Ishikawa Ishikawa introduced the concept of quality circles He was more focus
on practical techniques and promoted many of the tools and techniques of measuring
quality.

Philip Crosby firstly designed a highly successful programme for ITT. After a career at
ITT, Crosby started the management consulting company. Crosby's response to the
quality crisis was the principle of "doing it right the first time" He would also include
four major principles:

1. the definition of quality is conformance to requirements

2. the system of quality is prevention
3. the performance standard is zero defects
4. the measurement of quality is the price of nonconformance

CHARACTERISTICS OF TQM:

The characteristics of TQM, as revealed from above definition are as follows:

 • TQM is customer oriented.
• TQM requires a long term commitment for continuous improvement of all
• processes.
• The success of TQM demands the leadership of top management and continuous
• involvement.
• Responsibility for establishments and improvement of systems lies with the
• management of an organization.
• TQM is a strategy for continuously improving performance at all levels and in all
• areas of responsibility.
• Every employee is responsible for quality.
• Problems must be prevented, not just fixed.
• Quality must be measured.
• Quality improvements must be continuous.
• The quality standard is defect free.
• Goals are based on requirements, not negotiated.
• Management must be involved and lead.

TQM IS THE NEED OF TODAY

At the century close, the creation of the global market, international orientation of
management that sweeps national boundaries, introduction of new technologies, and shift
towards customer focused strategies, make the competition stronger than ever. The
criteria for success in this global, internationally oriented market have been changing
rapidly. In order to expand business, enter new markets, and set realistic, competitive
long-term objectives, excellence became an imperative. Management's effort has been
directed towards discovering what makes a company excellent.
To achieve excellence, companies must develop a corporate culture of treating people as
their most important asset and provide a consistent level of high quality products and
services in every market in which they operate. Such an environment has supported the
wide acceptance of Total Quality Management (TQM) which emerged recently as a new,
challenging, marketable philosophy. It involves three spheres of changes in an
organization -- people, technology and structure.
TQM can lead to a drastic change in the productivity of an org. if
implemented properly. In recent years, TQM has been the most focused area of research
as compared to other disciplines both in the industrial and academic world. The literature
is abundant with theories and applications. Since the benefits of TQM are many therefore
it doesn’t pervade only to all the sectors of the business but also to the society.
Case Study: Total Quality Management [TQM]

Executive Summary:
Our client, a multi-location ready mix concrete, sand and gravel supplier faced the twin
problems of escalating costs and eroding customer service. MLE was engaged to support
the President as he implemented his vision for the firm. Central to his vision was the
creation of a culture which valued quality, customer service and continuous
improvement. Over a six month period MLE Consulting performed a TQM readiness
assessment, organized the Quality Steering Committee, trained the management and
hourly employees in TQM and supported the work of the departmentally based Quality
Teams and the cross functional Corrective Action Teams. Our client has reported savings
of $2 million to $3 million.

Background:
The firm is one of the largest ready mix concrete producers in the Mid-Atlantic region.
Over 350 employees are spread over seven different locations and four major divisions.
The second generation management team recognized the need to change the culture of
the organization without losing the strength of the family oriented culture. The company
did not have a history of participative management and reacted slowly to opportunities.
Initial interviews confirmed that management was viewed skeptically. Substandard
internal communication fed fear and resentment on the part of employees.

Managers and employees were very loyal to the company. Most of them had grown up in
the business. Management had a "shirt sleeve style" typical of the construction industry.
Most of the truck drivers could read and write. Turnover was exceptionally low by
national and regional standards.

The prolonged recession in commercial and residential construction had put them in a
vulnerable position. They were faced with increasingly aggressive competition. A major
objective for implementing TQM was to eliminate the waste in delivery and improve the
reliability of delivery. The President made it plain that the savings from improvements
would fund the culture he needed to implement TQM.

The Process:
The first step was to perform a TQM readiness assessment. Over a five day period MLE
interviewed all of the senior management team and several hourly employees. This
confirmed initial observations and highlighted several areas for targeted customer service
improvement and cost reduction. TQM training was developed and initial Corrective
Action Teams (CAT) were formed, based on the results of the assessment.

The next step was to communicate the vision to every employee in the company. The
President told each employee his vision for the business. MLE attended these special 5:30
AM meetings with the truck drivers to answer questions about the TQM process.

The next step was to organize the steering committee and train the management team.
Training was further developed in the six TQM training sessions. By incorporating their
culture, credibility was improved. In addition, training improved the application of TQM
ideas and broke down barriers to change.

Four groups of twenty employees were then trained. MLE trained in-house trainers to
continue the training of employees.

A second, but equally important task continued parallel to the training. The Corrective
Action Team (CAT) used the TQM process to improve the customer service levels and
eliminate waste in trucking.

The CAT team used each of the five critical areas in Total Quality Management to
generate the needed changes in their trucking operations:

• Customer Focus
• Teamwork
• Problem Solving
• Waste Elimination
• Continuous Improvement

Over three months they generated cost reduction initiatives worth $600,000 and
implemented over $300,000 of cost savings. This major victory by hourly and first line
management demonstrated the effectiveness of TQM.

Results:
The client engaged MLE to support a change in the vision of the company. They realized
a 25:1 payback on their investment in Total Quality Management. Their premier service
reputation was restored and they became the preferred supplier to many contractors.
According to the President, the company has become much amore flexible and
responsive. Improvements to the bottom line bear this out.

Source:http://www.slideshare.net/siddharth4mba/case-study-tqm-total-quality-
management
QUESTIONS

Q1: Why MLE change the culture of the organization?

Q2: The process which MLE follow was right?
Q3: Why the profit increased?

Q1: Why MLE change the culture of the organization?

Ans: The firm was one of the largest ready mix concrete producers Over 350 employees
are spread over seven different locations and four major divisions but Turnover was
exceptionally low by National and regional standards. The competition in the industry
was increasing so without changing the culture according to the modern standards the
survival of the company was in danger. The management also realized that we should
focus on quality and customer satisfaction so they decided to bring change.

Q2: The process which MLE follow was right?

Ans: MLE follows the process in a very systematic way and takes steps in right direction.

• TQM readiness assessment was done

• Communicate the vision to every employee of the company
• Train the management team
• Focus on five major areas Customer Focus, Teamwork, Problem Solving
Continuous improvement, waste elimination

The process which MLE follows was right and got good results.

Q3: Why the profit increased?

The following are the main reasons

• MLE was already an established organization and organization just needs

implementation of TQM tools and methods in efficient way
• Management and employees was very loyal to organization
• Employees accept changes in a positive way
• Planning and implementation was perfect
• Focus on right areas