Total Quality Management – What is TQM, It’s Meaning & Importance – Harappa Education

If you’ve played dominoes, you’ve probably observed how pushing one small tile creates a chain reaction and knocks over every subsequent tile. This chain reaction is popularly known as the domino effect.

Similarly, organizations rely on multiple dominoes (factors) to achieve desired business outcomes. Employee satisfaction, customer happiness, minimized costs and proper utilization of resources impact its overall performance. It’s safe to say that the overall quality of an organization’s performance is influenced by its individual components. Total Quality Management ensures the supervision and development of every single component. Let’s look at the meaning of total quality management and understand its advantages.

What Is Total Quality Management?

TQM or Total Quality Management is a structured management approach based on the belief that an organization’s continuous effort can contribute to its long-term success. When every member is dedicated to improving the quality of work, it seamlessly aligns the overall objectives of a company.

Management consultants W. Edwards Deming, Armand V. Feigenbaum and Joseph M. Juran jointly developed the TQM concept. They helped Japanese industries rebuild their businesses post World War II. TQM was developed to solve the manufacturing industries’ problems but over time it’s become a universal management framework that benefits all kinds of businesses. The approach is beneficial for everybody involved—the organization, its employees and the customers/clients.

Total quality management uses a PDCA cycle (Plan, Do, Check, Act) for continuous control and improvement of business outcomes.

1. Planning Phase

This is the most crucial phase of TQM; it requires individuals to list down action items for various challenges or problems. Employees need to get to the root of the problem(s) and find solutions through adequate research and data collection.

2. Doing Phase

In this phase, employees find a solution to the problems they’ve identified. They devise strategies that address a problem’s source. A solution’s or strategy’s effectiveness depends upon how well someone has defined a problem and identified the root cause.

3. Checking Phase

This phase is reserved for analysis. People check for a solution’s effectiveness by monitoring the progress that’s been made. Assessed data becomes an input for the subsequent step in the PDCA cycle.

4. Acting Phase

People document their results after meeting their goals. They use the cycle’s results to identify and address challenges in other fields, therefore standardizing the TQM method.

Elements Of Total Quality Management

What is TQM without the successful implementation of its underlying factors? Here are the core elements or principles that influence the success of TQM:

1. Customer Focus

Businesses should understand their target markets or customers. By identifying customers’ needs, organizations can allocate their resources for initiatives or strategies that’ll improve customer satisfaction. They can find new ways to exceed customer expectations. When in doubt, remember Bill Gates’ words of wisdom, “Your most unhappy customers are your greatest source of learning.”

2. Leadership

Good leaders build effective teams and give people a sense of direction. In addition to motivating, leaders provide guidance on setting personal goals that align with an organization’s mission and vision. Positive leadership boosts productivity and efficiency. Strong leaders help people stay driven, find meaning in their work and concentrate on larger goals.

3. Process Approach

Organizations achieve their desired business results when related activities and resources are properly managed. Toyota Motors for example, made its assembly line more efficient by keeping just enough inventories open in order to fulfill customers’ orders. TQM emphasizes the need for improving efficiency, effectiveness and consistency to speed up production process, delivery and/or performance.

4. System Approach

TQM creates a standardized system that helps identify, understand and manage interrelated processes that contribute to an organization’s success. It stresses the importance of several independent processes including the quality of products, employee satisfaction, consumer satisfaction and better utilization of resources.

5. Approach To Decision-Making

TQM facilitates a factual approach in decision-making. Decisions are based on data collected from in-depth research and analysis. Facts, figures and statistics can help anyone understand the product/service and marketplace in detail. Businesses make clear decisions based on objective data.

6. Focus On Solutions

People often make the mistake of remedying a problem in the short-term. Instead of eradicating the source of the problem, they treat symptoms. For example, if an organization faces problems with shipping goods, managers should figure out whether the problem is related to the entire shipping process.

Importance Of Total Quality Management

Quality can be defined as an attribute that differentiates a product or service from its competitors. Total quality management makes an organization stand apart from the rest. Let’s look at some of the other advantages of TQM that drive customer satisfaction and business success.

1. Cost Reduction & Increased Profitability

TQM helps reduce total quality costs. In other words, it aims to produce superior quality products and services so that no additional costs are borne later. Many companies like Motorola implemented TQM techniques to reduce manufacturing costs, saving billions of dollars.

2. Enhanced Productivity

Some organizations offer superior quality resources, high-end infrastructure and excellent technology—all of which are instrumental in motivating employees. With improved standards of work and better working conditions, employees are encouraged to maximize their output.

3. Lesser Redundancy

Every organization aims at improving productivity and profitability. TQM uses a systematic approach to reduce any duplication of tasks, therefore saving time and fully utilizing available resources.

4. Improved Innovation Process

As we’ve already established, TQM includes a research phase. Organizations collect data about any current challenges or problems to devise effective solutions. Some organizations rely on unique strategies to get to the root of a problem. For example, businesses often use the A/B testing method to compare two versions of the same strategy and implement the one that produces better results.

5. Continual Improvement

.TQM tools like progress-trackers help businesses monitor their employees’ performance at all times. There are internal as well as external gains from continuous improvement. External gains include better product quality, increased market share and productivity. Internal gains include effective teamwork, increased job satisfaction and better workplace culture.

6. Effective Communication

TQM techniques push individuals to collaborate and support each other for the greater benefit of an organization. Increased teamwork and cross-functional collaboration prompt everyone to strive for continuous improvement. For example, clear communication enables a  production chain that functions seamlessly because everyone is on the same page.

7. Holistic Approach To Management

Many organizations struggle with low employee engagement. TQM helps workplaces bring behavioral changes by facilitating self-development, teamwork and improved employee engagement. Individuals show more interest in their roles because the organization prioritizes their well-being and job satisfaction.

8. Increased Goodwill

Organizations can establish quality standards for goods/services using TQM. Internal stakeholders (employees and investors) get lucrative incentives and profitable return on investment. External stakeholders (customers and clients) get superior quality products and services. The result: positive brand image and goodwill in the long-run.

Conclusion

With increased competition and globalization, total quality management has become a common practice of modern-day businesses. Individuals (especially managers and leaders) use this tool to improve a product’s design, ensure increased revenue, eliminate wastage and defects, and enhance the market image. Most of all, they help employees find meaning in their work, in addition to encouraging collaboration and teamwork.

Harappa Education’s Managing Teamwork course is designed to help you understand your team’s goals and expectations. You’ll not only learn to collaborate with multiple stakeholders but also encourage cross-functional collaboration among team members.

The Bruce Tuckman Model will guide you through the various stages of team formation and growth. The GRIN Framework will help you understand the fundamental characteristics of an effective team. The quality or success of an organization depends on its employees. So, build an employee-first culture and master the art of continuous improvement!

Explore our Harappa Diaries section to know more about topics related to the Collaborate habit such as Teamwork, Delegation of Authority, Difference Between Leadership and Management, Strategic Management, Functions of Management & Risk Management in order to develop your collaboration skills.