TRANSFORMATION TO TQM

A business organization can not start the transformation to TQM until it is aware that the quality
of the product or service must be improved. Awareness comes when a business organization
loses market share or realizes that quality and productivity go hand-in-hand. It also happens if
TQM is mandated by the customer or if management realizes that TQM is a better way to
operate a business and compete in domestic and foreign markets.

Automation and other productivity enhancement might not help a business organization if it is
unable to market its product or service because of poor quality. The Japanese and the
Taiwanese learned this fact from practical experience. In the past, they could sell their products
only at a very low prices, thus, it was too difficult for them to obtain repeat sales. Until recently,
business organizations have not recognized the importance of quality. However, a new attitude
has emerged where quality comes first among the equals of cost and services. In other words,
the customer wants value/quality.

Quality and productivity are not exclusive. Thus, improvements in quality can directly lead to
increase productivity and other benefits. Table 1.2 shows this concept. As can be gleaned from
the table, improved quality results in a 5.6% improvement in productivity, capacity and profits.
Many quality improvements projects are achieved with the same work force, some overhead,
and no investment in new equipment.

Table 1.2 Gain in Productivity with Improved Quality

Item Before Improvement 10% After Improvement 5%

Nonconforming Nonconforming
Relative total cost for 20 units 1 1
Conforming units 18 19
Relative cost for 0.1 0.05
nonconforming unit
Productivity increase (100) (1/18) = 5.6%
Capability increase (100) (1/18) = 5.6%
Profit increase (100) (1/18) = 5.6%
Source: W. Edwards Deming, Quality Productivity, and Competitive Position, (Cambridge, Mass:
Massachusetts Institute of Technology, Center for Advance Engineering Studies, 1982)

According to E. Deming, "Quality improvement is not limited to the conformance of the product
to specifications; it also involves the inherent quality in the design of the system. The prevention
of product and process problems is a more desirable objective than taking corrective action after
the product is manufactured or a service rendered."
TQM does not occur overnight; there are no quick solutions. It takes a long period of time to
build the appropriate systems and techniques into the culture. Short term results and profits
must be set aside so long-term planning and constancy of purpose will be done.
MEANING OF QUALITY
When "quality" is used, we usually think of an excellent product or service that satisfies or
exceeds our expectations. These expectations are based on the intended use and the selling
price. For example: a customer expects a different performance from a plain steel oven than
from a chrome plated steel oven because they are a different grade. When a product surpasses
our expectation, we always consider it as a quality product, as stated by D. A. Garvin.
Quality can be quantified as follows:
Q = P/E
where: Q = Quality
P = Performance
E = Expectations

If Q is greater than 1.0, then the customer has a good feeling about the product or service. Of
course, the determination of P and E will most likely be based on the perception of the
organization determining performance and the customer determining expectations. According to
ANSI/ASQC Standard A3-1987, "quality" is the totality of features and characteristics of a
product or service that bear on its ability to satisfy implied or stated needs. Stated needs are
determined by the contract and are called constraints. Implied needs are a function of the
market and must be identified and defined and are called parameters. These needs involve
safety, availability, maintainability, reliability, usability, price and environment.

Price is easily defined by some monetary unit such as pesos. The other needs are defined by
translating the designs, features and characteristics of a product or the delivery of a service into
conditions and specifications. Conformance of the product or service to these conditions and
specifications is measurable and provides a quantifiable definition of quality. If the conditions
and specifications do not satisfy the customer needs, they should be changed. Needs usually
change overtime, thereby requiring a periodic re-evaluation of conditions and specifications by
means of customer surveys.

Table 1.3 reveals nine (9) dimensions of quality with their meanings and expectations in terms of
a slide projector, according to Garvin.

These dimensions are somewhat independent; therefore, a product can be excellent in one
dimension and average or poor in another. Very few, if any, products excel in all nine
dimensions. For example: The Japanese were cited for high quality cars in 1970s based only on
the dimensions of reliability, conformance, and aesthetics. Therefore, quality products can be
determined by using a few of the dimensions of quality.

Marketing has the responsibility of identifying the relative importance of each dimension of
quality. These dimensions are then translated into the requirements for the development of a
new product or the improvement of an existing one.

Dimensions Meaning and Example

 Performance Primary product characteristics, such as the
brightness of the picture
Features Secondary characteristics, added features,
such as, remote control
Conformance Meeting specifications or industry standards
workmanship
Reliability Consistency or performance over time,
average time for the unit to fail
Durability Useful life, includes repair
Service Resolution of problems and complaints, ease
of repair
Response Human-to-human interface, such as the
courtesy of the dealer
Aesthetics Sensory characteristics, such as exterior
finish
Reputation Past performance and other intangibles, such
as being ranked first
Source: Harvin, D., Managing Quality: The Strategic and Competitive Edge. (New York: Free
Press, 1988)