It is easiest to comprehend the significance of Total Quality Management (TQM) when compared to the “teamwork” mentality that propels sports franchises to victory year after year. Each player has a certain role to play, needs the right tools and training, and ultimately wants to succeed and become a part of a winning culture.
The corresponding objectives for firms are to: 1) capture a portion of the market; 2) expand that portion over time; and 3) cultivate a winning culture around their success. The concept and game plan for business success are both included in a Total Quality Management system.
Total Quality Management is a unified approach to managing and continuously improving all aspects of production, such as raw material sourcing, fabrication, distribution, and sales. Developed in the second half of the 20th century, the idea of Total Quality Management continues to be relevant today because of its compelling emphasis on detailed supply chain monitoring and continuous reevaluation of its processes, all in an effort to:
- Reduce product defects,
- Minimize production waste, and
- Discover potential areas for improvement and innovation.
At its core, TQM’s impetus is sustainable customer satisfaction, achieved through continuous improvement. The process of implementing a successful TQM system should reflect this.
Sustainable customer satisfaction and continuous improvement should be behind every step of the successful implementation of TQM. Here are four important steps for businesses looking to implement Total Quality Management principles in their operations:
1. Gain Commitment and Understanding from Employees and Suppliers
Comprehensive quality efforts must be initiated by the management, but require dedicated effort and buy-in at every level. Your first step is to garner commitment to the company vision among your employees. Your company’s vision can be communicated through your mission statement, company standards, and expectations — but it’s even more important that you practice what you preach. Words without actions behind them won’t get you far.
Furthermore, you should be able to provide your teams and suppliers with all the necessary training tools and materials, which will give them the skills and knowledge to bring your vision to life. Committed suppliers with a complete understanding of your standards and best practices will gain confidence in your company as a reliable business partner, and in their ability to continuously improve their operations.
2. Develop a Quality Improvement Culture
Through the implementation of the Plan-Do-Check-Adjust (PDCA) method at every phase of production and distribution, on-site managers can take performance improvement into their own hands.
An ongoing feedback loop relying on analysis and iterative action is an effective way to adjust to the evolving market conditions, drive continuous improvement, as well as discover breakthrough methods that could really enhance quality and efficiency.
3. Focus on Customer Requirements
If you think customers only care about cheap products, then you may make a sale — but making a sale is not the endpoint of your journey. For thriving businesses, each new sale is a potential beginning of a long relationship with a loyal consumer, one that will bring you repeat business and, ideally, promote your brand through valuable word-of-mouth advertising.
To win such loyalty, you need to remember that many of today’s consumers are willing to spend a little extra for product quality, on-time delivery, and, increasingly, proven ethical production practices. Achieving TQM’s ultimate goal of sustainable consumer satisfaction requires incorporating these customer requirements into your standards and processes — and using the principles of TQM to ensure they are met.
4. Maintain Effective Quality Control Measures
Technically, delivering customer satisfaction over the short term is possible even without effective TQM. However, if you want your business to continue operating at a profit, your goal should be to establish efficient production practices that will enable you to deliver products of consistently high quality, drive innovation, and become more competitive.
Regular quality control inspections are instrumental in maintaining and improving product quality. Furthermore, all relevant quality data points should be captured in real-time, stored, consolidated, and analyzed to pinpoint present and future problem areas, as well as opportunities for improving production methods.
Total quality management benefits and advantages:
- Strengthened competitive position
- Adaptability to changing or emerging market conditions and to environmental and other government regulations
- Higher productivity
- Enhanced market image
- Elimination of defects and waste
- Reduced costs and better cost management
- Higher profitability
- Improved customer focus and satisfaction
- Increased customer loyalty and retention
- Increased job security
- Improved employee morale
- Enhanced shareholder and stakeholder value
- Improved and innovative processes
Use TQM to Improve Customer Satisfaction
A primary focus of TQM and most Quality Management Systems is to improve customer satisfaction by having a customer focus and consistently meeting customer expectations. Customers are almost always satisfied when their expectations are met. When they expect a certain product or service, and you deliver it without problems and at a fair price, you’ve built a solid customer relationship. Happy, satisfied customers become repeat customers and they provide word-of-mouth marketing – the most powerful kind.
There are three Total Quality Management components that work toward achieving customer satisfaction:
- It requires that your business understand what customers typically expect in a field, industry, or product line,
- It ensures your business has the expertise and the resources to consistently deliver the expected product or service, and
- It emphasizes the need for your business to clearly communicate to the customers exactly what you will deliver to avoid misunderstandings.
TQM provides the quality assurance that customers will get what they expect, as well as a process for managing unsatisfied customers, make needed corrections and prevent similar reoccurrences.
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Every business owner and manager knows the importance of satisfied customers, and how expensive it is to find new customers compared to keeping current customers. Business research clearly shows that there is a direct correlation between satisfied customers and revenue. If your business doesn’t have a clear path to creating satisfied customers, then it can benefit from TQM.
TQM Improves Business Efficiency and Effectiveness
While focusing on the customer is critical to success, it isn’t the only factor. A business can go broke sparing no expense to make customers happy. So not only does a business need to satisfy customers, but it needs to do it in a way that is. A business also has to look within and understand its own operations, another important role of a quality management system.
Total Quality Management places a focus on internal processes, including
- How processes align to produce desired outcomes to satisfy customers
- How consistently do processes deliver desired outcomes (effectiveness)
- The productivity of a process compared the resources used (efficiency)
Being able to consistently produce desired outcomes without wasting resources like time, material, and money is critical for a business to make it over the long haul.
TQM Provides Long-Term Competitiveness
Being able to satisfy customers while operating effectively and efficiently is truly the recipe for financial success and stability. If you achieve these quality assurance goals that are part of Total Quality Management, then you will likely be in business for a long time to come.
Notice that with TQM, quality is not just about a product or service meeting (somewhat arbitrary) requirements. It is about how the whole organization operates to understand customer expectations and competitively deliver customer satisfaction.
No Easy Task
It is important to remember, however, that TQM takes full commitment from management. Simply tossing the concept down to employees and saying “do this” just adds an extra burden on workers without much benefit from their efforts. Organizational members take their cue about what is important from management.
Only through top management commitment and involvement does TQM take hold and become part of the organization’s culture. Once ingrained as the way of doing things, the business can reap the benefits of TQM – including a healthier bottom line.
What is The Most Important Principle of TQM?
Total quality management is a management approach built on the premise that when all stakeholders commit to ongoing quality improvement, long-term success, and customer happiness are feasible.
This actually means total, bottom-to-top staff commitment. The entire organization undertakes a continuous process of identifying and improving business areas by focusing on improving quality to achieve the highest customer satisfaction and, eventually, a larger market share. This includes everyone from new frontline employees to the highest-ranking executives.
To maintain long-term client loyalty, every individual, team, and procedure within the organization strives to consistently provide customer satisfaction. TQM is considered an ongoing customer-focused management approach that is about consistently improving business operations from all levels and in all aspects.
There are 8 universally accepted principles of TQM required to meet and exceed customer expectations:
- Focus on Customers: The overarching and top principle of TQM is that the customers define whether or not your products are high quality. An organization can work to improve all areas of the business but, in the end, the customer determines whether the efforts were worthwhile—which means post-market metrics to be consistently captured and analyzed.
- Full Employee Commitment: When an organization decides to adopt this management style, they must ensure all employees buy into the processes and system. This can only happen in an open workplace where employees don’t fear change and are empowered to learn while top management ensures the proper environment for success of TQM, including training.
- Strategic and Systematic Approach: The processes and procedures of each company should be a direct reflection of the organization’s vision, mission, and long-term plan. This means quality and customer satisfaction are baked into the overall ethos of the organization and production process. All of which require a documented strategic plan for the long term.
- Adherence to Process: In TQM, it is believed that every activity can be deconstructed into a clear process that should be documented, adhered to, analyzed, and iterated on. Statistical process control is a cornerstone of TQM.
- Fact-based Decision Making: Being data-driven is at the center of TQM. Policies and procedures must be followed once implemented and then analyzed based on collecting data throughout the process flow to see opportunities for improvement.
- Effective Communication: During the adoption of TQM and throughout the day-to-day operations and initiatives, having clear communication channels that both employees and customers feel empowered to use is critical.
- Continual improvement: TQM is not a one-and-done thing. It requires an organizational mindset shift that requires continuous iteration for both process improvement and quality improvement.
- Integrated Systems: In TQM, systems should talk to each other, convey useful information across departments, and help make informed data-driven decisions. A shared vision, including knowledge of and commitment to the principles of TQM, keeps everyone on the same page.
In order to find success in total quality management, company-wide buy-in of every principle is critical. If a company can not achieve complete buy-in, the benefits of TQM can’t be realized. This means working with all employees to make sure they feel like this is the best thing for them, the organization, and the customers.
We can draw the conclusion that these eight components are essential to guaranteeing TQM’s success in an organization and that the supervisor plays a significant role in fostering these components at work. Business entities cannot successfully implement TQM without these components. The explanation above makes it abundantly evident that TQM would be seriously flawed—in fact, it would be lacking—without the inclusion of integrity, ethics, and trust. The key to helping the organization build a TQM climate is training. Teamwork and leadership go hand in hand.
The entire TQM process is hampered by a lack of communication between departments, managers, and employees. Last but not least, those who made a significant contribution to the task’s completion should be acknowledged. Therefore, the guiding principles of a successful TQM organization are to set an example for others to follow, teach staff to deliver a quality product, foster an environment where knowledge sharing is encouraged, and give credit where credit is due.