Total quality management (TQM) consists of organization-wide efforts to “install and make permanent climate where employees continuously improve their ability to provide on demand products and services that customers will find of particular value.” “Total” emphasizes that departments in addition to production (for example sales and marketing, accounting and finance, engineering and design) are obligated to improve their operations; “management” emphasizes that executives are obligated to actively manage quality through funding, training, staffing, and goal setting. While there is no widely agreed-upon approach, TQM efforts typically draw heavily on the previously developed tools and techniques of quality control. TQM enjoyed widespread attention during the late 1980s and early 1990s before being overshadowed by ISO 9000, Lean manufacturing, and Six Sigma.
Development in the United States
In the spring of 1984, an arm of the United States Navy asked some of its civilian researchers to assess statistical process control and the work of several prominent quality consultants and to make recommendations as to how to apply their approaches to improve the Navy’s operational effectiveness. The recommendation was to adopt the teachings of W. Edwards Deming. The Navy branded the effort “Total Quality Management” in 1985.
From the Navy, TQM spread throughout the US Federal Government, resulting in the following:
- The creation of the Malcolm Baldrige National Quality Award in August 1987
- The creation of the Federal Quality Institute in June 1988
- The adoption of TQM by many elements of government and the armed forces, including the United States Department of Defense, United States Army, and United States Coast Guard
The US Environmental Protection Agency’s Underground Storage Tanks program, which was established in 1985, also employed Total Quality Management to develop its management style. The private sector followed suit, flocking to TQM principles not only as a means to recapture market share from the Japanese, but also to remain competitive when bidding for contracts from the Federal Government since “total quality” requires involving suppliers, not just employees, in process improvement efforts.
Quality management
Quality management ensures that an organization, product or service consistently functions well. It has four main components: quality planning, quality assurance, quality control and quality improvement. Quality management is focused not only on product and service quality, but also on the means to achieve it. Quality management, therefore, uses quality assurance and control of processes as well as products to achieve more consistent quality. Quality control is also part of quality management. What a customer wants and is willing to pay for it, determines quality. It is a written or unwritten commitment to a known or unknown consumer in the market. Quality can be defined as how well the product performs its intended function.
Evolution
Quality management is a recent phenomenon but important for an organization. Civilizations that supported the arts and crafts allowed clients to choose goods meeting higher quality standards than normal goods. In societies where arts and crafts were the responsibility of master craftsmen or artists, these masters would lead studios and train and supervise others. However, the importance of craftsmen diminished as mass production and repetitive work practices were instituted. This approach’s aim was to produce large numbers of the same goods. The first proponent in the US for this approach was Eli Whitney, who proposed (interchangeable) parts manufacture for muskets, hence producing the identical components and creating a musket assembly line. The next step forward was promoted by several people including Frederick Winslow Taylor, a mechanical engineer who sought to improve industrial efficiency. He is sometimes called “the father of scientific management.” He was one of the intellectual leaders of the Efficiency Movement and part of his approach laid a further foundation for quality management, including aspects like standardization and adopting improved practices. Henry Ford was also important in bringing process and quality management practices into operation in his assembly lines. In Germany, Karl Benz, often called the inventor of the motor car, was pursuing similar assembly and production practices, although real mass production was only properly initiated in Volkswagen after World War II. From this period onwards, North American companies focused predominantly upon production against lower cost with increased efficiency.
Walter A. Shewhart made a major step in the evolution towards quality management by creating a method for quality control for production, using statistical methods, first proposed in 1924. This became the foundation for his ongoing work on statistical quality control. W. Edwards Deming later applied statistical process control methods in the United States during World War II, thereby successfully improving quality in the manufacture of munitions and other strategically important products.
Quality leadership from a national perspective has changed over the past decades. After the second world war, Japan decided to make quality improvement a national imperative as part of rebuilding their economy, and sought the help of Shewhart, Deming and Juran, amongst others. W. Edwards Deming championed Shewhart’s ideas in Japan from 1950 onwards. He is probably best known for his management philosophy establishing quality, productivity, and competitive position. He has formulated 14 points of attention for managers, which are a high level abstraction of many of his deep insights. They should be interpreted by learning and understanding the deeper insights. These 14 points include key concepts such as:
- Break down barriers between departments
- Management should learn their responsibilities, and take on leadership
- Supervision should be to help people and machines and gadgets to do a better job
- Improve constantly and forever the system of production and service
- Institute a vigorous program of education and self-improvement
- Drive out fear, so that everyone may work effectively for the company
In the 1950s and 1960s, Japanese goods were synonymous with cheapness and low quality, but over time their quality initiatives began to be successful, with Japan achieving high levels of quality in products from the 1970s onward. For example, Japanese cars regularly top the J.D. Power customer satisfaction ratings. In the 1980s Deming was asked by Ford Motor Company to start a quality initiative after they realized that they were falling behind Japanese manufacturers. A number of highly successful quality initiatives have been invented by the Japanese (see for example on this pages: Genichi Taguchi, QFD, Toyota Production System). Many of the methods not only provide techniques but also have associated quality culture (i.e. people factors). These methods are now adopted by the same western countries that decades earlier derided Japanese methods.
Customers recognize that quality is an important attribute in products and services. Suppliers recognize that quality can be an important differentiator between their own offerings and those of competitors (quality differentiation is also called the quality gap). In the past two decades this quality gap has been greatly reduced between competitive products and services. This is partly due to the contracting (also called outsourcing) of manufacture to countries like China and India, as well internationalization of trade and competition. These countries, among many others, have raised their own standards of quality in order to meet international standards and customer demands. The ISO 9000 series of standards are probably the best known International standards for quality management.
Some themes have become more significant including quality culture, the importance of knowledge management, and the role of leadership in promoting and achieving high quality. Disciplines like systems thinking are bringing more holistic approaches to quality so that people, process and products are considered together rather than independent factors in quality management.
Government agencies and industrial organizations that regulate products have recognized that quality culture may assist companies that produce those products. A survey of more than 60 multinational companies found that those companies whose employees rated as having a low quality culture had increased costs of $67 million/year for every 5000 employees compared to those rated as having a strong quality culture.
The influence of quality thinking has spread to non-traditional applications outside of walls of manufacturing, extending into service sectors and into areas such as sales, marketing and customer service. Statistical evidence collected in the banking sector shows a strong correlation between quality culture and competitive advantage.
Customer satisfaction has been the backbone of quality management and still is important. However, there is an expansion of the research focus from a sole customer focus towards a stakeholder focus. This is following the development of stakeholder theory. A further development of quality management is the exploration of synergies between quality management and sustainable development.
Principles
The International Standard for Quality management (ISO 9001:2015) adopts a number of management principles, that can be used by top management to guide their organizations towards improved performance.
Customer focus
The primary focus of quality management is to meet customer requirements and to strive to exceed customer expectations.
Rationale
Sustained success is achieved when an organization attracts and retains the confidence of customers and other interested parties on whom it depends. Every aspect of customer interaction provides an opportunity to create more value for the customer. Understanding current and future needs of customers and other interested parties contributes to sustained success of an organization
Leadership
Leaders at all levels establish unity of purpose and direction and create conditions in which people are engaged in achieving the organization’s quality objectives. Leadership has to take up the necessary changes required for quality improvement and encourage a sense of quality throughout organisation.
Rationale
Creation of unity of purpose and direction and engagement of people enable an organization to align its strategies, policies, processes and resources to achieve its objectives
Engagement of people
Competent, empowered and engaged people at all levels throughout the organization are essential to enhance its capability to create and deliver value.
Rationale
To manage an organization effectively and efficiently, it is important to involve all people at all levels and to respect them as individuals. Recognition, empowerment and enhancement of competence facilitate the engagement of people in achieving the organization’s quality objectives.
Process approach
Consistent and predictable results are achieved more effectively and efficiently when activities are understood and managed as interrelated processes that function as a coherent system.
Rationale
The quality management system consists of interrelated processes. Understanding how results are produced by this system enables an organization to optimize the system and its performance.
Improvement
Successful organizations have an ongoing focus on improvement.
Rationale
Improvement is essential for an organization to maintain current levels of performance, to react to changes in its internal and external conditions and to create new opportunities.
Evidence based decision making
Decisions based on the analysis and evaluation of data and information are more likely to produce desired results.
Rationale
Decision making can be a complex process, and it always involves some uncertainty. It often involves multiple types and sources of inputs, as well as their interpretation, which can be subjective. It is important to understand cause-and-effect relationships and potential unintended consequences. Facts, evidence and data analysis lead to greater objectivity and confidence in decision making.
Relationship management
For sustained success, an organization manages its relationships with interested parties, such as suppliers, retailers.
Rationale
Interested parties influence the performance of an organizations and industry. Sustained success is more likely to be achieved when the organization manages relationships with all of its interested parties to optimize their impact on its performance. Relationship management with its supplier and partner networks is of particular importance.
