Philosophy, principles and

concepts of TQM
 TQM is a vision which the firm can
only achieve through long-term
planning, by drawing up and
implementing annual quality plans
which gradually lead the firm towards
the fulfillment of the vision, i.e. to the
point where the following definition of
TQM becomes a reality.
Quality is a part of this definition in that TQM can be
said to be the culmination of a hierarchy of quality
definitions:
1. Quality—is to continuously satisfy
customers’ expectations.
 Fitness for use or purpose
 To do a right thing at first time
 Find and know what consumer wants
 Features that meet consumer needs and give customer satisfaction
 Freedom from deficiencies or defects
 Conformance to standards
 Value or worthiness for money
2. Total quality—is to achieve quality at low cost.
3. Total Quality Management—is to achieve total
quality through everybody’s participation.
“TQM is characterized by
five principles”

1. Management’s
commitment
(leadership);
2. Focus on the customer
and the employee;
3. Focus on facts;
4. Continuous
improvements (KAIZEN);
5. Everybody’s
participation.
1. MANAGEMENT’S COMMITMENT
(LEADERSHIP)
A vital task for any management is to outline
quality goals, quality policies and quality plans
in accordance with the four sides of the TQM
pyramid. This is extremely important—so
important in fact that, in many firms, top
management (the board of directors) ought to
review the firm’s quality goals and policies and if
necessary reformulate them so that they conform
to the four sides of the TQM pyramid. These
goals and policies should be clear and
meaningful to all employees in the firm.
 Quality goals and quality policies must be followed
by meaningful action plans.

In the run-up to the action plan, management must

answer the following questions:

1. Where are we now?

2. 2. Where do we want to be?
3. 3. How do we get there?

Questions 2 and 3—‘where do we want to be’ and ‘how

do we get there’—can be answered by means of the
benchmarking method.
Benchmarking- can be defined as a continuous process, the
purpose of which is to measure services, products and
procedures against the toughest competitors or leading
procedures in a given market.

Basic philosophy behind benchmarking (Sun Tzu 500 BC and

the Japanese art of warfare):

 know your own strengths

and weaknesses;
know your competitors
(opponents) and the best in the field;
 learn from the best;
achieve leadership.
There are four main types of benchmarking
that can be used:

Internal benchmarking- means comparing

yourself with departments and divisions in the
same organization.
Competitor-based benchmarking- The most
difficult form of benchmarking where the firm
compares itself with its direct competitors.
Functional benchmarking- is based on the
functions which the firm concerned is especially
noted for, the idea being that the firm compares
itself with the leading firm in these functions.

Generic benchmarking- includes procedures

which are common on all types of companies,
such as order-taking, the payment of wages,
word processing and the like.
 2. FOCUS ON THE CUSTOMER
AND THE EMPLOYEE
Focusing on the customer and the customer’s
requirements and expectations is neither new nor
revolutionary. The new message in TQM is:

1. In addition to focusing on external customers and their

expectations and demands, it is necessary to focus on so-
called internal customer and supplier relations.
2. To create customer satisfaction, it is not enough just to
live up to the customer’s expectations.
3. FOCUS ON FACTS
Focus on the customer and the employee is
the cornerstone of TQM. It is only natural,
therefore, that both employee and customer
satisfaction are included as quality goals.
Satisfied customers and satisfied employees
are prerequisites for a good business result.
MEASUREMENT OF CUSTOMER
SATISFACTION
When measuring customers’
satisfaction it is important to realize that
the importance of the different quality
parameters varies. The customer’s
satisfaction must therefore be measured
in many different dimensions (quality
parameters) if it is to form the basis of
quality improvements.
MEASURING EMPLOYEE
SATISFACTION
The internal customer/supplier
relationship is all-important in TQM.
Being able to satisfy external customers
depends on having satisfied internal
customers. One of the main control
points of ‘human quality’ is employee
satisfaction, which should be measured
and balanced in the same way as
customer satisfaction.
QUALITY CONTROL POINTS
AND QUALITY CHECKPOINTS

Quality control point - measures a given

process result.
Quality checkpoint- measures the state of
the process. Of the many different states
that can be measured, it is important to
choose one, or a few, which can be expected
to have an effect on the result.
QUALITY COSTS
Traditionally, so-called quality costs have
been divided into the following four main
groups:

1. Preventive costs;
2. Inspection/appraisal costs;
3. Internal failure costs;
4. External failure costs.
4. CONTINUOUS IMPROVEMENTS
Higher quality both should
and can be achieved through:

 Internal quality
improvements - aimed to
make the internal
processes ‘leaner’, i.e. to
prevent defects and
problems in the internal
processes which will lead
to lower costs.
External quality
improvements-
aimed at the external
customer, the aim
being to increase
customer satisfaction
and thereby achieve a
bigger market share
and with it, higher
earnings.
5. EVERYBODY’S
PARTICIPATION
Customers, including internal customers (i.e.
the firm’s employees) are part of the firm’s
processes. Their requirements and expectations,
must be identified in all the processes. The next
step is to plan how these requirements and
expectations can be fulfilled. This requires
feedback from the customers, so that their
experiences and problems become known in all
processes. To get everybody to participate demands
the education and motivation of both
management and employees.
The next condition is that management also
invests in the education and training of all
employees at all levels in:
1. Identifying defects and problems.
2. Finding the causes of defects and problems.
3. Prevention, i.e. preventing the causes of
defects and problems. A condition for effective
prevention is that employees have completed
points 1 and 2 and that, on the basis of a causal
analysis, they make suggestions for and
implement quality improvements.
4. Start again.