MODULE 1: INTRODUCTION TO TOTAL QUALITY MANAGEMENT

Objectives:
1. Define quality.
2. Identify primary elements, core concepts and benefits of total quality management.
3. Distinguish between traditional management and TQM.
4. Compare and contrast reengineering and TQM.

Total Quality Management is not a fresh idea. The approaches advocated by Deming, Juran,
Crosby and others have long been used by well effective managers. The most noteworthy feature
is he level of mutual trust is needed by both management and staff to create a culture in which an
effective quality management program can be successful. Quality is currently everyone’s task,
not just the inspection department. People are anticipated to seriously weight up their jobs and
make the first move to improve their part of the process. Open, objective measurements are
necessary.
Defining Quality
Quality is a lot more than thee nonexistence of defects which allow companies to meet
customer expectations. Quality needs controlled process improvement allowing companies to
exceed customer’s expectations. Quality will let companies to re-establish pride and loyalty in
their organizations. Quality can only be attained by the nonstop improvement of all systems and
processes in the organization not simply the production of products and services but also the
design, development, service purchasing, administration and indeed, all aspects of the
transactions with the customer. Each one must work in concert toward similar end.
Quality can only be observed through the eyes of the customers. An understanding of the
customer’s expectations (effectiveness) is the first step. Then exceeding those expectations
(efficiency) is required. Communications will be the key. Going beyond customer expectations
guarantees meeting all the definitions of quality.
Different people understand quality in a different manner. Hardly anyone can describe
quality in quantifiable terms that can be operationalized. The banker may differentiate their
products or service with “service, for the health care worker it is quality health care, for the hotel
or restaurant employee it is customer satisfaction and for the manufacturer it is simply quality
product. A few individuals can provide a specific definition and measurement of quality when
pressured. There is an old saying in management which says, if you can’t quantify it, you can’t
manage it, and it is also true with quality. Every member of the organization should be clear
about its concept, definition and measurement as it applied to his job if the strategic management
system and the competitive advantage are to be based on quality. Appropriate quality can be
identified or perceived in different way in the same company.
Approaches to Quality Definition
In his book Managing Quality, Harvard Professor David Garin summarized five principal
approaches to defining quality namely:
1. Transcendent- Most people would agree that the Mona Lisa or Michaelangelo's David
are works of art which represent quality because people travel from around the world to
view them. But can they define it'. Those who embrace "I can't define it, but I know it
when I witness." Advertisers are inclined of promoting products in these terms. "We love
to fly and it shows" "Where shopping is a pleasure" (supermarket), (airlines), "The great
American beauty. ..its elegant" (automobile) and "It means beautiful eyes" (cosmetics)
are examples. Television and print media are flooded with such indescribable claims, and
therein lays the problem that quality is not easy to define or operationalized. It therefore
becomes obscure when using the approach as a source of competitive advantage. Besides,
the functions of design, production and service may discover it complicated to use the
definition as a starting point for quality management.

2. Product-based - Quality is observed as a quantifiable or measurable characteristic or

attribute. For instance durability or reliability can be measured and the engineer can draw
to that yardstick. Quality is concluded objectively. Although this approach has many
benefits, it has limitations as well. The yardstick for measurement may be deceptive
where quality is founded on individual taste or preference.

3. User-based - This definition is founded on the idea that quality is an individual issue and
products that best please their preferences (perceived quality) are those with the highest
quality. This is an approach based on reason but directs to two problems. First consumer
preferences differ extensively and it is not easy to combine these preferences into
products with broad demand. This leads to the selection between a niche strategy and a
market aggregation approach which strives to identify those product attributes that
support the needs of the biggest number of customers. Another problem concerns
whether quality and customer satisfaction is the same. Probably not. One may confess a
Montero has many quality attributes, but contentment may be better realized with an
Adventure. One has only to remember the box office success of recent motion pictures
that endure from poor quality but are obviously favored by the largest number of
moviegoers.

4. Manufacturing-based - The definition is focused mainly with engineering and

manufacturing practices and use the universal definition of "conformance requirements."
Requirements or specifications are launched by design and any difference involves a
decline in quality. The concept is relevant to services as well as products. Superiority in
quality is not automatically in the eye of the beholder but rather in the standards set by
the organization. Thus, both Fortuner and Isuzu Max possess quality, as do Adventure
and Innova's as long as the product or service "conformance requirements" are met. This
approach has a serious weak point. The consumer's perception of quality is compared
 with conformance and thus is internally focused. Stress on the reliability in design and
manufacturing is inclined to attend to cost reduction as the objective. Cost reduction is
perceived in a limited way which is to invest in design and manufacturing improvement
until these incremental costs equal the costs of non-quality like rework and scrap. This
approach goes against Crosby's concept of "quality is free."

5. Value-based - It is defined using costs and prices as well as the number of attributes.
Hence, the consumer's purchase decision is founded on quality at an up to standard price.
This approach is based on two criteria which is quality and value. The highest quality
product is not typically the best value. That description is given to the "best-buy" product
or service.

Quality Types
In general, quality is meeting and exceeding customer expectations at a price that he is
willing to pay to possess the product or service. There are three types of quality which are
quality of design, quality of conformance and quality of performance.
1. Quality of Design- is all about set characteristics that the product or service must
minimally have to satisfy the requirements of the customer based on market research.
Thus, the product or service must be designed in such a way so as to meet at least
minimally the needs of the consumer at a given cost. However, the design must be
simple and also less expensive so as to meet the customers' product or service
expectations. Quality of design is influenced by many factors, such as product type,
cost, profit policy, demand of the product, availability of parts and materials, and
product reliability. This process of developing a product requires effective exchange
of ideas among marketing, sales, services, manufacturing, research and development
departments. Market research and service call analysis are the center of this process.
Market research on consumer shall indicate the customer needs (current and
potential) and sales call analysis will provide investigation about problems customers
face with the product performance.

2. Quality of Conformance - is basically meeting the standards or user-based

characteristics defined in the design phase after the product is manufactured or while
the service is delivered. It refers to the extent in which the firm and its suppliers are
able to manufacture products with expected level of reliability and uniformity at a
specified cost with quality requirements based on the study made on quality design.
This phase is also concerned about quality control starting from raw material to the
finished product. Three broad aspects are covered in this definition, namely defect
detection, defect root cause analysis, and defect prevention. Defect prevention deals
with the means to deter the occurrence of defects and is usually achieved using
statistical process control techniques. Detecting defects may be by inspection, testing
or statistical data analysis collected from process. Subsequently, the root causes
 behind the presence of defects are investigated, and finally corrective actions are
taken to prevent recurrence of the defect.

3. Quality of Performance — is how sound the product functions service performs

when put to use. It measures the degree to which the product or service pleases the
customer from the angle of quality of design together with the quality of
conformance. Meeting customer expectation is the focus of quality of performance.
Automobile industry performs test drive of vehicles to gather information concerning
mileage and oil consumption. Bulbs are life tested to be aware of its reliability
throughout its useful life. Customer survey is carried out to discover customer's
perception about service rendered. If product or service does not meet to customer
expectation, then modifications are considered necessary in the design or
conformance phase.

Quality Levels
Quality focused organization must evaluate at three levels namely organization,
process and individual. Quality systems and standards must be defined at each level and
then manage quality thorough improvement efforts. The organization, process and
individual are co-dependent and are linked together in a total system that eventually
decides the quality of products and services of an organization. Having received faulty
parts by a customer would mean a problem at any or all levels. Perhaps an operator has
assembled the faulty part incorrectly or allows the faulty part shipped. Or probably there
might problems in the basic processes such as design, production, order entry or materials
acquisition processes. Organization, represented by top management could also be
blamed because of not being able to identify the quality necessary to be competitive,
inappropriate strategy, unable to establish necessary policies, budgets, goals and
measures.

Organizational Level
The organizational level quality requirements revolve around its customers'
quality requirements. A customer is anyone who receives one or more of the
organization's products or services who could be an 'internal or external one. The
following issues may help define quality at this level:
1. Products or services that meet customer expectations
2. Products or services that do not meet customer expectations
3. Products or services that are needed by the customers but they do not
received
4. Products or services that are not needed by the customers but they do not
received
 The resolution to these issues will include productivity and cost requirements and
those that are traditionally linked to quality. Timeliness, accessibility and value for
money are quality features for a customer. During interviews identified customer
requirements are converted into specific measures and then into performance standards.
Most quality-focused organizations, aside from data gathering use benchmarking
to compare its functions with the same functions as other organizations. Benchmarking
should be a continuing concern to make certain that the organizational employs ongoing
improvement to compete and deliver demanded customer requirements. Customer
feedback is also essential to ensure that organizational quality management is a constant
concern. Feedback on a regular basis must some from both internal and external
customers. Standards coming from customer requirements must be the foundation for
goal-setting, problem solving, performance evaluation, incentive compensation,
nonfinancial rewards and resource allocation.

Process Level
At the process level, units of the organization are categorized into functions or
departments like marketing, operations, finance, human resource and so on. Most processes are
cross-functional so managers can—optima6 the activities of his department and sub-optimize the
activities of the entire organization. The following issues may help define quality at this level:
1. Products or services that are most important to external customers
2. Processes that produce those products or services
3. The key inputs to the process
4. Processes that have the most major effect on the organization's customer-drive
performance standards
5. The internal customers and their needs
Defining quality at the process level starts with determining the end-customer
requirements for the process. End-customer requirements should then be translated into specific
measures that should drive one or more internal measures for the overall process. These
measures must be brought to the different sub process and sub sub-process. The outcome is a set
of meters in addition to the specific standards they produce placed at key stages of the process
that will serve as the basis for monitoring each step's contribution to process quality. The meters
and standards will also be used for troubleshooting the system in case customer requirements are
not met.
Like managing organizational quality, it requires search for improvement opportunities to
handle process quality. As an example, a producer of electronic components faces a problem of
excessive cycle time (the time from customer order to customer receipt of the product). The
product was given to the customer late 83% of the time. Through developing a map and setting
up performance measures, the company discovered that the largest fault were in other areas. A
customer order to reach fabrication took 13 days. During most of the time, the order was hanging
around for the next processing time. The initial process improvement attempt created a reduction
in cycle time from 13 weeks to five weeks. Without suffering in product quality, the process
continually improves and cycle time has been reduced to 19 days only.

Performer/Job/Task Design Level

Nearly all people desire to do high-quality work, but often times they are limited by
systems that do not support it. It is vital to generate an individual quality in the context of
organization and process quality despite quality being broken at the individual level. The
statistical tools for instance are not appreciated by workers because the tools are used at the
individual level without being connected to the overall needs of the system.
Individuals are one of the vital components of the human performance system. At the
micro level they serve as a reflection of the process and the system being used by the
organization. Each individual under the human performance system accepts inputs, generate
outputs and then adjust his performance from the feedbacks obtained.
Developing standards to measure each individual key output is a necessity to define
individual quality. The standards created from organization and process levels should be the
basis for these standards to be developed. Productivity and cost are the requirements for a
customer-driven quality. With these requirements the areas to be measured to qualify individual
standard would include ACCURACY, COMPLETENESS, INNOVATIVENESS,
RELIABILITY, EASE OF USE, TIMELINESS, VOLUME, RATE, COST, and FLEXIBILITY.
Three issues have to be answered for each output of the individual tasks in order to
develop individual qualities which are:
1. The requirement of both internal and external customers
2. The manner of measuring the requirements
3. The specific standards for each measure
Under the human performance system, the quality of each individual work or performance is
shaped by these factors:
1. The input an individual receives which consists of how clear the performance
expectations are, the reasoning of the work procedures, the sufficiency of resources, the
appropriateness of skills and knowledge and how clear the cues that prompt performance.
2. The positive/negative results for performing as desired/not desired.
3. The feedback an individual obtains such as the nature of the information given, when and
how frequent it is given and the manner in which it is provided.
4. An individual's physical, mental and emotional capacity

Quality Paradigms
1. Custom-craft paradigm – In this paradigm the focus is on the product or service and
performance should be exactly as what customer demands. Each product unit is designed
and built exactly the way the customer wants it. The requirements include skilled
craftsperson, basic hand tool. And demand for the unique product. Some examples of this
pattern are from bank loans, coffee shops, tailor’s shops and furniture.

2. Mass production and sorting paradigm – here the focus is on production rate without
direct involvement of the customer. Products are designed and built based on how the
customer defined the products. Rework and scrap are obvious since product performance
is low. Sales are taken from the stock held which makes delivery time typically low.
Service organizations under this paradigm are labor-intensive. The requirements consists
of interchangeable parts, factory power, unskilled labor pool, large customer pool and
hard-selling. Some examples of this pattern are from automobile parts and readymade
buildings for commercial enterprises.

3. Statistical quality control paradigm – this paradigm is comparable to the mass

production and sorting paradigm except that more emphasis is given to production
processes. The application of this paradigm together with mechanized production results
in low scrap and rework and low production cost. Products are designed and build,
statistical process control and statistical sampling are used, and then customers are
generated. The requirements compromise interchangeable parts, factory power, unskilled
labor pool, large customer pool, hard-selling statistical methods. Some examples of this
pattern are from automobile parts and electronic components.

4. Total quality management paradigm – this paradigm focuses on customers and

suppliers in addition to mass production and statistical methods. Possibly customers
participate in product definition, creation and performance evaluation stages to inform the
producer what to design and build. Using employee involvement and empowerment,
customer-focus, continues improvement, top management commitment, training and
teamwork, the producer successfully delivers a product the customers want. This
paradigm results in high quality product, low-cost, speedy delivery and substantial
decrease for rework and scrap. The requirements contain interchangeable parts, factory
power, statistical methods, empowered employees, supplier, partnerships, and customer
relationships. Some examples of this pattern are from products/services of TQM
Companies.

5. Techno-craft paradigm – this paradigm is the socio-technical complement to the

custom-craft paradigm with the intention of reducing delivery time. Each units designed
and builds exactly the way the customer wants it build using high level of product
process flexibility. The requirements incorporate interchangeable parts, factory power,
statistical methods, empowered employees, supplier partnerships, customer relationships,
customer aided design, and customer-aided manufacturing. Some examples of this pattern
are from the software and apparel industries.
Cost of Quality
Cost of Quality is a method that permits an organization to decide on the level to which
its resources are used for activities that avoid poor quality, that assess the quality of the
organization’s products or services, and that result from internal and external failures. An
organization is able to determine the potential savings to be gained by implementing process
improvements having such information.
Quality-related activities that incur costs may be divided into prevention costs, appraisal
costs, and internal and external failure costs.
1. Prevention Costs – there are incurred to prevent or avoid failure problems. Prevention
activities lead to reduce of failure and appraisal cost. These costs are associated with the
design, implementation and maintenance of the quality management system. They are
planned and incurred before actual operation, and they could include:
a. Product or service requirements – establishment of qualifications for inward
bound materials, processes, finished products and services.
b. Quality planning – drawing of plans for quality reliability, operations, production
and inspection.
c. Quality assurance – planning and continuance of the quality system
d. Training – development, preparation and continuance of programs

2. Appraisal Costs – These costs are associated with measuring and monitoring activities
related to quality standards and performance requirements. These costs take place from
spotting defects rather than prevention. These costs are associated with the suppliers’ and
customers’ evaluation of purchased materials, processes, products, and services to ensure
that they conform to specifications. They could include:
a. Verification – checking of inward bound material, process setup, and products
against contracted specifications
b. Quality audits – confirmation that the quality system is operating properly
c. Supplier rating – appraisal and endorsement of suppliers of products and services

3. Internal failure costs – are acquired to treat defects revealed earlier when the product or
service is delivered to the customer. These costs happen when the results of work fail to
attain design quality standards and are noticed before they are transferred to the customer.
They could include
a. Waste – performance of needless work or holding of stock as an outcome of
errors, poor organization or communication
b. Scrap – faulty product or material that cannot be repaired, used or sold.
c. Rework or rectification – improvement of flawed material or errors.
d. Failure analysis – activity necessary to ascertain the reasons of internal product or
service failure
 4. External Failure Costs – These are costs obtained to treat defects exposed by customers.
These costs occur when products or services that fail to attain design quality standards are
not discovered until after transfer to the customer. This could include.
a. Repairs and servicing – of both returned products and those in the field
b. Warranty claims – failed products that are replaced or services that are re-
performed under a guarantee
c. Complaints – all work and costs connected with handling and servicing
customers’ complaints
d. Returns – handling and investigation of discard or recalled products including
transport costs.
There are two main components of cost of quality which are cost of conformance and
cost of non-conformance. Cost of conformance is the cost of making available products or
services based on required standards. Simply it is a good amount spent such as prevention and
appraisal costs. Cost of non-conformance means failure costs linked with a process not
functioning based on required standards. Simply it is a pointless amount spent like internal and
external costs.
Essentially quality costs are defined as the total costs acquired by investing in the
prevention of non-conformance to requirements and appraisal of a product or service for
conformance to requirements and failure to meet requirements.

DEFINING TOTAL QUALITY MANAGEMENT

TQM is an all-inclusive and well thought-out means to organizational management that
searches to advance the quality of processes, products, services, and culture through continuing
minor changes in reply to constant feedback. TQM consists of continuous process enhancement
activities concerning managers and workers alike in an organization in a completely integrated
effort toward improving performance at all level. This enhanced performance is aimed at
satisfying such cross-functional goals as quality, costs, schedule, mission, need and suitability.
TQM combines basic management techniques, current improvement efforts and technical tools
in a disciplined approach focused on continuous process improvement. The activities are
eventually focused on improved customer satisfaction.
TQM begins with a focus on the customer and is boundless, with a lifetime dedication to
continuous improvement. TQM merges a participative philosophy of management attributed to
Dr. Edwards Deming with importance on quantitative techniques and employee involvement to
get better the quality of goods and services. TQM is a process of controlled change that
comprises the entire employees in the improvement of the quality of products and services to
boot the productivity of the organization TQM optimizes innovative approaches to problem
solving and shifts the organization from defect detention to defect prevention. With TQM all of
the organization’s resources are used effectively to improve all of its processes. TQM engages
everybody in the organization from the top management to the lowest position. The timing,
progression, method of execution and integration of these elements will differ from one
organization to another.
Essential to the TQM approach is the transformation in management philosophy
regarding the responsibility for quality. Previously it is given to a separate group of individuals
in a department/directorate/division frequently designated as Quality Assurance. In TQM, the
responsibility for quality is given to everyone, each and every employee, from top management
to the lowest position in the organization.
TQM is accomplished using a team organization with both management and the
employees as members of Quality Teams which focus on continuous process enhancement.
Those who do a job know it best. Thus suggestions to improve the quality of an exacting process
should come from the employees who work in the process and the managers who work on the
process. Communication must be encouraged to let employees and management to work jointly
to attain the shared goal of continuous process improvement.
TQM necessities may be defined independently for a specific organization or may be in
loyalty to established standards, like the International Organization for Standardization’s ISO
9000 series. TQM can be applied to any type of organization; it originated in the manufacturing
sector and has since been adapted for use in almost every type of organization imaginable
including schools, highway, maintenance, hotel management, and churches. As a current focus
of e-business, TQM is based on quality management from the customer’s point of view.

The Primary Elements of TQM

Quality is a necessary parameter which helps organizations outshine their competitors and
survive the fierce competition.
The achievement of TQM depends of the eight elements which are further classified into
following four groups.
Foundation
The entire process of total quality management is built on a strong foundation of ethics,
integrity and trust. TQM involves every single employee irrespective of his designation and level
in the hierarchy.
1. Ethics – a combination of written and unwritten codes of principles that govern
decisions and actions within a company. It is an understanding of the difference of
good and bad decision making and behavior at the business world. It boils down
to following the code of conduct of organization and adheres to rules and
regulation. It describes the actions of individuals within an organization as well as
those of the organization as a whole.

2. Integrity – is the consistency of actions, values, methods, measures, principles,

expectations and outcomes at workplace. There is a need to respect organization’s
 policies. Avoid spreading unnecessary rumors about fellow workers. TQM does
not work in an environment where employees criticize and backstab each other.

3. Trust – one of the most important factors necessary for implementation of TQM
because it builds a cooperative environment. It is a relationship based on reliance.
Employees need to trust each other to ensure participation of everybody and
allows empowerment that encourages pride of ownership and commitment. Trust
fosters individual risk-taking for continuous improvement and is essential to
ensure customer satisfaction. Trust improves relationship among employees and
eventually helps in better decision making which further helps in implementing
TQM successfully.

Building Bricks
Bricks are placed on a strong foundation to reach the roof of recognition The foundation needs to
be strong enough to hold the bricks and support the roof. Leadership, teamwork and training are
the building bricks of TQM.
1. Leadership – provides a direction to the entire process of TQM. It is about raising the
aspirations of followers and enthusing people with a desire to reach the goals. Leadership
in TQM requires the manager to provide an aspiring vision, make strategic decisions and
instill values that guide subordinates. TQM needs to have a supervisor who acts as a
strong source of inspiration for other members and can assist them in decision making. A
leaders himself needs to believe in the entire process of TQM for others to believe in the
same. Proper downloads, briefs about TQM must be given from time to employees to
help them in its successful implementation. TQM initiatives have to be introduced and
led by the top management.

2. Teamwork – is a crucial element of TQM. Rather than working individually, employees

need to work in teams. When individuals work in unison, they are in a position to
brainstorm ideas and come up with various solutions which would improve existing
processes and systems. Team members ought to help each other to find a solution and put
into place.

Teamwork offers contiguous improvement in processes and operations. The teams

may be:
a. Problem-solving – these are temporary and formed to solve certain
problems, identify and overcome causes of those problems. They
generally last from one week to three months.
b. Quality improvement – these are temporary teams with the purpose of
dealing with specific problems that often recur. These teams are set up for
a period of three to twelve months.
 c. Natural Work – these teams consist of small groups of skilled workers
who share tasks and responsibilities. These teams use concepts such us
employee involvement teams, self-managing teams and quality circles.
3. Training – employees need to be trained on TQM to become highly productive. Managers
need to make their fellow workers aware of the benefits of TQM and how would it make
a difference in their product quality and eventually yield profits for their organization.
Employees need to be trained on interpersonal skills, the ability to work as a team
member, technical know-how, decision-making skills, problem-solving skills and so on.
Training enables employees to implement TQM effectively within their departments and
also make them indispensable resources.

Binding Mortar
Binding mortar binds all the elements together. Communication binds everything
together, starting from the foundation and going up to the roof. Communication is the vital link
between all the TQM elements and must be prevalent in an organization in order for TQM to
work the way it should. The channels of communication need to be credible and easily
interpreted for all members of the organization.
Communication binds employees and extracts the best out of them. Information needs to
be passed on from the sender to the recipient in its desired form. Small misunderstandings in the
beginning lead to major problems later on. Employees need to interact with each other to come
up with problems existing in the system and find their solutions as well. Three types of
communication takes place between employees:
1. Downward communication - This is the dominant form of communication in an
organization. Presentations and discussions are two examples of this form of
communication. Flow of information takes place from the management to the employees.
The supervisors are able to make the employees clearly understand TQM using this type
of communication.

2. Upward communication - Flow of information takes place from the lower-level

employees to the top level management. The lower-level employees are able to offer
suggestions on the effects of TQM to the upper level management using this type of
communication. Supervisors should listen effectively and incorporate the insights and
constructive criticisms offered by the employees in correcting the situations that arise
through the use of TQM. This create a level of trust between supervisors and employees.
This is also similar to empowering communication, where supervisors listen to others.
3. Sideways/lateral communication - Communication also takes place between various
departments. This type of communication is important because it breaks down barriers
between departments. It also allows a more professional dealing with customers and
suppliers.
Roof
It includes recognition which brings greater internal customer satisfaction which in turn
leads to external customer satisfaction in the organization. There can be a huge change in
self-esteem, productivity and quality when the contributors are recognized.
Recognition is the final element of TQM. Recognition is the most important factor which
acts as a catalyst and drives employees to work hard as a team and deliver their lever best.
Every individual is hungry for appreciation and recognition. Employees who come up with
improvement ideas and perform exceptionally well must be appreciated in front of all. They
should be suitably rewarded to expect a brilliant performance from them even the next time.
The most important responsibility on a supervisor is that of according recognition to the
employees.

Core Concepts of TQM

Each of the following core concepts of TQM can be used to drive the process of
continuous improvement and to develop a framework for quality improvements over many
years.
1. Customer satisfaction - TQM is centered on the requirements of the customer. In
order to meet customer requirements, it is imperative to listen to them and do what is
agreed upon. Companies have to give identical importance to the internal as well as
the external customers. A better technique for companies to use their customers is to
learn what is significant to them and then, equal their performance to the customer's
satisfactions. Many forward-looking companies of the world have started the process
of carrying out a survey known as "energy meter" which reflects the satisfaction,
morale, and motivation levels of employees and develops the model of
"employeeship" with core stress on the principles of customer satisfaction. Further,
on the external customer front, surveys are carried out among the customers for
identifying their satisfaction, expectations and the causes for low customer
satisfaction. For that reason, the satisfaction index is compiled and product qualities
are monitored to improve customer satisfaction.

2. Internal customer satisfaction - Customers are not only external customers, but the
people outside who are the end user of a firm's products and services. There is also
the internal customer, the person within the company who receives the work of
another and adds his contribution to the product or service before passing it on to
someone else. It is essential to attain a successful internal working relationship in
order to satisfy the needs of the external customer. If the internal customers'
requirements are agreed and met, a chain of quality is built that reaches, out to the
external customer. Whether an organization supplies products or services, the people
it supplies internally are as real as its external customers. Therefore, they also require
 speed, efficiency and accuracy. That's why the idea of the internal customer can be
used as a highlight for improvement.

3. All work is process - Another possible focal point of improvement is that of business
processes. A process is a combination of methods, materials, manpower and machines
that work collectively to produce a product or service. All processes include natural
variability and one approach to quality improvement is to progressively reduce
variation. First, this can be done by removing variation due to special causes and
secondly by driving down the common cause of variation, thus bringing the process
under control and improving the capability.

4. Measurement - In order to improve, one must first measure one's present

performance. This will help one focus both on satisfying internal customers and
meeting the requirements of external customers. There are seven generic ways in
which the quality of outputs can be measured:
a. Defects- work not up to specification
b. Rework- work requiring correction
c. Scrap- work thrown away
d. Lost items- work done again
e. Backlogs- work behind schedule
f. Late deliveries- work after agreed time
g. Surplus items- work not required

5. Synergy in teamwork- The idea of synergy in teamwork, where the whole is greater
than the sum of its parts, is the key concept in TQM. Here it is used to promote
collaboration, consensus, “creative conflict” and team winning. One of the strengths
of using teams for TQM is that they can merge the mutually restricted individual
qualities needed for running business today. Teamwork can provide opportunities for
people to work together to reach quality improvement. People who work on their own
or in a small group often have a compartmentalized picture of their organization and
the work that it does. They are quite strange with the work done even by people who
are in their vicinity. Consequently, they are unacquainted of the results of the poor
quality of their work. Bringing people together within teams with the common goal
of quality improvement aids communication between people, departments and
functional activities. Teamwork gradually breaks down the communication barriers
and acts as a platform of change. Teamwork also enables a group of people to work
as a task force as seen in cross-functional teams, committees and others which look at
cross-functional problems, solving problems and identifying and adopting new ways
of doing things. In this connection, quality
circles and quality improvement tools facilitates team-building processes in
organizations.
 6. People make quality -Most of the quality problems within an organization are not
usually within the control of an individual employee. The system often comes in the
way of employees who are trying to do a good job. In such a situation, motivation by
itself cannot work. Therefore, managers are required to ensure
that all necessary is prepared to let people to produce quality. This creates an
environment where people are eager to take responsibility for the quality of their own
work. Releasing the talents of everyone within the organization in is way can generate
a culture for quality improvement.

7. Continuous improvement cycle -The continuous cycle of instituting customer

requirements, meeting and measuring them, measuring success and continuing the
improvement can be used both externally and internally to stimulate quality
improvements. The continuous improvement cycle used over and over again will lead
to a fresh "chemistry" within the organization so that the culture starts to change to
one of continuous improvement.

8. Prevention- At the heart of TOM is the conviction that it is possible to achieve

defect-free work most of the time. This is termed "right first time, every time or zero
defects. The "right first time, every time" or zero defects policy is the results of an
emphasis on prevention, and the diligent use of measurement, process controls and
the data-driven elimination of waste and error. It serves as a goal for continuous
improvement. Prevention is the goal of all quality assurance. Through planned and
systematic action such as documentation of
work processes or cost of quality audits, quality assurance prevents quality problems.

Benefits of TQM

There are many benefits of TQM. Essentially, TQM refers to the total quality
in fulfilling the needs of the customers, the quality of the products and the quality
of life. Having these focuses leads to better business results and also benefits
business in several different ways. Here are some benefits of TQM:
1. Creates a good corporate culture- TQM is an approach where the customer 1s the center point of
the business rather than the department. Therefore, quality is
transformed from an issue of the production department to a strategic business
entity to meet global challenges. The TQM philosophy revolves around developing a culture that
supports total commitment to customer satisfaction through continuous improvement.
2. Better reviews from customers-Another benefit of TQM is that customers and
clients are highly satisfied with the performance. Given the quality assurance
testing procedures, the products of the company will constantly meet the
requirements and needs of clients and customers. Therefore, the customers
stay with the company longer, deepen their relationship with the company
 and demonstrate less price sensitivity while recommending the company's
products or services to others. Customer satisfaction and high performance
results also possibly lead to high reviews in different publications and
newspapers which further enhances the image of the company and in turn that of the business.
3. Better performance from employees- Through TQM, there is often more attention
placed on meeting the needs of the employees or internal customers. The
training given to the employees as part of the program can boost employee
morale at the workplace resulting in employees working harder to achieve the
goals of TQM.

SHIFTING FROM TRADITIONAL MANAGEMENT TO TQM

Traditional management styles are all essentially management by results.

Managers feel justified in letting quality standards slip, adjusting output to meet
quotas, and generally forfeiting the right production standards and procedures
to pander to results. This management style is predicated on the "ends justify
the means” philosophy. This "charade of conformance” fosters dishonesty and a
juggling of the facts.

Quality-focused management is predicated instead on the quality of the

product and the satisfaction of the customer. In this style, the goal is to produce
an extremely high quality product without cutting corners on quality and
without pandering to profits. This is a radical departure from traditional styles,
which applaud profits above quality and virtually every other consideration. In
quality-focused management, profits improve because the product is better and
the customer is willing to pay for it. This type of management requires detailed
quality measurement and observance to consistent quality standards, since any
drop in quality will be detected by customers and will weaken the success of this
style.

Changing from a traditional style to a quality-focused style of management

requires re-education or managers to become leaders instead of bosses as well as
clear communication of the company's quality vision. The quality goal must be
championed by everyone, beginning from the top down to the lowest worker.
The alteration to a quality-focused style forces sweeping changes in every aspect
of a company s management from the selection of personnel to the function of teams within the company,
but the end result is a better-quality product, a pleased customer, and a company that operates with greater
integrity.
Total quality management has changed the traditional management style
forever. It was a very essential movement those days. Some of these changes are
essential even today. Few of these changes are discussed below.
1. Traditional way of management focused on internal activities. Quality had a
meaning which was totally internally defined. Products or services provided
by organization were assumed to be good in quality, if this organization
has done its best in producing that product or service. But in total quality
 management, focus is the customer. So that final decider of the quality is the
Customer. Fitting to the customer requirement was the least requirement while
delighting them is the ultimate goal.

2. Traditionally people thought bad quality products are due to the workers who
do not perform their job properly. One of the major differences between total
quality management and traditional management style is the assignment of
the responsibility of the quality to the management. Especially responsibility
of the quality goes into the middle level management in the operational level.

3. Total quality management is an organization wide movement. All the

organization has to be in agreement to apply TOM principles. Total quality
management, unlike traditional management calls for high amount of team
working. Team building, especially cross functional teams is feature of 1QM.
These teams will present the necessary thrust to the implementation process
and will push the system forward, with very less struggle.

4. TQM believes in quality assurance rather than checking. Quality is inbuilt to

the system, so that products are assured to be in good quality. Some decision
like narrowing down the supplier base is total quality management concepts
used for this purpose, which is revolutionary still today.
5. Unlike in traditional management style, total quality management makes
decisions on facts and figures. Therefore problems are identified properly
Therefore solutions are well planned.

6. TQM depends on cyclic thinking. Also it is continuous. Therefore improvements

are small, stable and continuous in nature. This is also known as Kaizen. These
events are used in teambuilding, brain storming and decision making.

There are many other differences between the old or the traditional way of
management to the total quality management. In the bigger picture, TQM has
basically changed the culture and the thinking patterns of the organization.

TQM and Reengineering

Reengineering sometimes called Business Forces Reengineering (BPR, involves a

complete rethinking and transformation of key business processes,
leading to strong horizontal coordination and greater flexibility in responding to
changes in environment. Because work is originated around processes rather
function, reengineering often involves a shift to horizontal structure based on teams.

Banks and insurance companies, manufacturing and mining companies, and service
companies throughout the world, all have achieved breakthroughs in speed, flexibility,
innovation and quality through reengineering.
 It is very important to understand that reengineering is not a disconnect
discipline. It is, in fact, a subset of TQM. The essential difference between (Business Process)
Reengineering and TQM is that reengineering aims at quantum gains on the order of 30% to 50%
or more, whereas TQM programs stress incremental progress, striving for inch-by-inch gains
again and again.

The two approaches to improve performance are not mutually exclusive, it makes sense
to use them in tandem. Reengineering can be used to first produce good basic design that
dramatically improves a business process. Total quality programs can be used to work out bugs,
perfect the processes, and gradually improve both efficiency and effectiveness.

Similarity and Difference between Reengineering and TQM

Some people have said that both TQM and Reengineering are the same, while others
have argued that they are incompatible. Michael Hammer argues that the two concepts are
compatible and actually complement each other. Both concepts have the same focus-customer
satisfaction.

TQM has contributed the concept of teamwork, worker participation and

empowerment, cross-functionality, process analysis and measurement, supplier
involvement and benchmarking. Also, TQM has emphasized the need for a "total" view of the
organizations in its approach to problem solving. TQM has also
influenced company culture and values by exposing organizations to the need for change.

TQM has advocated continuous and incremental improvement of processes (Kaizen)

whereas reengineering is about radical discontinuous change (breakthrough improvement)
through process innovation. TQM and reengineering fit together over time in the life of a
process.
Reengineering (BPRE) TQM (CPI)
Similarities
Basis of Analysis Processes Processes
Performance Measurement Rigorous Rigorous
Organizational Change Significant Significant
Behavioral Change Significant Significant
Time Investment Substantial Substantial

Differences
Level of change Radical Incremental
Starting point Clean slate Existing process
Participation Top-down Bottom-up
Typical Scope Broad, cross-functional Narrow, within functions
 Risk High Moderate
Primary Enabler Information technology Statistical control
Type of change Cultural and structural Cultural

TQM is the way of achieving the objective of "total quality. The techniques
used for continuous improvement and process reengineering are the tools of TQM.

In Japan, continuous improvement is referred to as Kaizen. This is incremental, gradual

and continuous improvement. According to Masaaki lmai, who coined the term, Kaizen means
improvement. It means continuous improvement involving everyone, both managers and
workers. Kaizen strategy maintains and improves the working standard through small gradual
improvements. In general, improvement can be defined as Kaizen and innovation.

Kaizen means gradual, incremental, continuous improvement. Innovation

calls for the radical improvements as a result of large investments in technology
and/or equipment. But the modern approach to total quality management includes both
incremental and breakthrough improvements under the term "continuous improvement”

When reengineering is implemented, the objective of total quality must always be

foremost to ensure success. Otherwise, implementation can be costly and still not yield
acceptable or long-term results. Process reengineering emphasizes radically changing to the
existing processes under the assumption that th0se changes will definitely improve the firm's
global performance or the performance of one of its specific processes.

However, to be effective, a firm's internal organization and processes should be directly

and formally linked to enhancing profitability through the fulfillment of its customers’ needs. If
this relationship 1s correctly and explicitly established right from the beginning, then
reengineering can be one of the best tools to achieve total quality and it will significantly
improve the performance of a firm.