TQM (Total Quality Management) is an integrated approach for organizations to achieve long-term success and excellent customer satisfaction. The TQM approach takes the route of management optimization and enhancement.
This methodology involves all members of the organization equally participating in improving processes, products/services, and the culture of the organization and their respective roles.
TQM aims to deliver the highest quality with the lowest cost, just like Six Sigma. Yes, there is a direct relationship between TQM and Sigma, but also they’re very much different. We’ll compare them side-to-side, but first, let’s understand TQM in detail.
TQM (Total Quality Management)
TQM dates back to the 1950s. Walter Shewhart and Joseph Juran mainly contributed towards forming TQM, its concept, and methodology. Juran used management tools such as statistical analysis and quality control, developed by Walter Shewhart, during his tenure with Western Electric Company. Eventually, these methodologies were developed specifically for quality control by W. Edwards Deming, later known as TQM.
Total – Creating a quality that comes from everyone in the organization no matter what level the employees work in. Recognizing the need to develop processes that lead to reliable and subpar delivery of promised products/services to the customer. Thus, achieving a highly dominant and competitive cost position and maximizing the return on investment.
Quality – Understanding the customer and their requirements are key to a business’s success. What also matters is the timeline, standards, and delivery. This ensures customer retention and enables acquiring new ones, leading to increased market presence, and overall market share.
Management – Top management leads the drive to achieve quality for customers, by communicating the business vision and values to all employees; ensuring the right business processes, and introducing and maintaining a continuous improvement culture.
TQM methodology lays a set of rules that enable organizations to strategically improve overall business functions and performance. This provides organizational efficiency, in turn, enabling the team to ideate and create high-quality products/services that ensure maximum client satisfaction, appreciation, and acceptance.
TQM leverages all the functions of any organization. Right from strategy, planning, production, marketing, sales, technology, design, finance, etc., everything becomes a part, when applying TQM and its methodologies. This ensures improvements in every department, in turn, improving the overall organizational functions and its product/service offerings. Thus, making TQM a highly effective quality management tool.
Total Quality Management and its Applications across Industries
Earlier, TQM had its earliest application and was widely used in the Manufacturing industry for decades. This also posed many questions on the versatility of TQM in other industries. For example, Toyota, Ford, Motorola, Phillips, etc. were the organizations that adopted TQM in their early stages.
But as TQM grew in popularity, its applications also expanded, and businesses found applications for it in all sorts of industries, like Banking, Hospitality, Education, Tourism, Pharmaceuticals, Finance, and more.
How do organizations practice TQM?
- It all starts with the organization deciding to implement TQM.
- Extensive support and motivation from top managerial-level executives.
- Decisions need to be approved by all stakeholders.
- Creation of baseline data that depicts current customer satisfaction and product/service quality.
- Learning the concepts and core principles of TQM.
- Mapping out a detailed TQM implementation plan, including deadlines, timelines, development roadmap, etc. for every step of the process.
- A thorough identification of customer needs and expectations in the correct priority order.
- Selection of the right processes that directly correlate with customer needs.
- Charting and analysis of the critical processes to ensure successful results.
- Properly ordered planning and implementation of TQM activities.
- Effective training of TQM activities to the staff.
- Consistent review of progress and correction of the process plan if necessary.
- Taking periodic employee feedback to make sure the process is efficient and effective.
- Finally, recognition and rewarding the team for their splendid efforts.
TQM enables you to measure:
- Problems identification with quality issues.
- Analyzing the issues
- Data evaluation
- Root Cause identification
- Result Measurement
The 8 Principles of TQM
When put together, TQM consists of eight principles that enable businesses to understand the concept and leverage it to achieve TQM in its truest sense. If used correctly, these principles combine to improve processes resulting in superior quality and process results for the business as well as the customer.
- Customer Centric: No product/service ever becomes successful without becoming the customer’s favored choice. Thus, all improvements must work in sync to completely focus on customers and their needs.
- Total Involvement: There are no fruitful results from half-hearted efforts. Therefore, all employees, right from leadership to the junior members of the team have to be completely involved to increase the quality and meet customer expectations.
- Process takes Precedence: Output improvement is directly affected by process improvement. Moreover, without output improvement, you cannot improve customer satisfaction. And that’s why the TQM methodology directs a lot of focus to the processes. Thus, defining, monitoring, and controlling processes assures quality.
- Business Process Integration: The evolution of different departments in an organization often devises its processes. Thus, it becomes difficult to oversee departmental operations and processes. TQM requires that all business processes be implemented across all departments for transparent, efficient, and maximum functioning and results.
- A Strategic, Systematic Approach: TQM emphasizes strategizing systematically. To achieve this, you first need to create a strategic plan that strongly focuses on quality improvement. Then you need a system for implementing the plan. Despite the simplicity of this approach, many organizations find themselves lacking in this area.
- Constant Improvement: A constant lookout for improvement opportunities is key to achieving a successful TQM implementation. Thus, every department should investigate potential areas for improvement. After identification, make sure you incorporate them into a strategic plan. Your organization should have a strong focus on becoming better rather than settling for something that’s ‘just good’.
- Factual Decisions: Decisions should be based on facts and you need to have data to support the objective and provide measurable results. This allows you to understand and gain insights into the various decisions. Also, mapping the progress of the strategies towards the organizational goals becomes much clearer and simple. This gives you authority to change and evolve strategies when the results turn out not desirable.
- Communication: Continuous and unhindered communication is essential in TQM. Information should flow from top to bottom and vice-versa. So, every employee understands the company’s goals and strategy. The same applies to management in understanding issues, concerns, and opportunities that staff face. Thus, channels for free flow of communication should be set up accordingly.
Benefits of TQM
TQM offers a lot of benefits to organizations, here are some of the important ones:
- A big bump in the product/service quality offered to the customers.
- Increment in employee morale
- Enhancement in overall Productivity of the organization.
- Brings down production costs.
- Increases the profits of the organization.
- More efficient and reliable organizational processes and functions.
- Increased employment engagement.
- Increment in the general work environment.
To understand it in further detail, the benefits of TQM can be classified into two following categories:
Customer satisfaction-oriented benefits.
- Product/Service quality improvements.
- Product/Service quality Improvements.
- Production flow and process improvements.
- Improvement in employee morale and quality consciousness.
- Product/Service overall improvement.
- Improvement in marketplace acceptance.
Economic improvements oriented benefits.
- Decreasing operating costs.
- Decreasing operating losses.
- Decreasing field service costs.
TQM vs. Six Sigma
The Six Sigma concept entered the market when TQM was highly popular among organizations and was widely preferred, and trusted as a quality management tool.
Although TQM enabled and helped many organizations to develop and grow, there were many areas that TQM couldn’t solve. For eg. solely focusing on quality can often lead to overlooking of other departments, like finance, etc. Sometimes achieving great quality can often impact the finances of the organization negatively, etc.
Six Sigma, on the other hand, solved maximum issues with a defect-centric methodology, aimed at continuous improvement, achieving efficiency, and effectiveness. Thus, eliminating the randomness created by the one-sided focus of TQM.
In 1987, William Bill Smith developed and implemented SIx Sigma to solve errors from Motorola’s business products and processes. Despite its success in improving the products and processes at Motorola, Six Sigma failed to receive the limelight. It was in 1995 when Six Sigma gained popularity after Jack Welsh adopted it at General Motors.
Quality Perspective of TQM and Six Sigma
It all comes down to how both methodologies define “Quality”. And that forms the major line of difference between TQM and Six Sigma.
TQM defines “Quality” as the product/service’s features that is manufactured by a company and how well it meets the customer requirements. In TQM, ‘good quality’ refers to a product/service that best meets the interests, requirements, and demands of the customers. And ‘bad quality’ refers to something customers will not be interested to invest their money in.
On the other side, Six Sigma defines “Quality” as the number or measure of defects of a product/service. The concept of Six Sigma revolves around having products/services that are flawless and have minimum defects. This, in turn, increases customer satisfaction, referring to “good quality” as a product/service with the least possible (or no) defect(s).
In a nutshell, TQM lays a heavy emphasis on continuous improvement. TQM integrates all functions within an organization. Planning, sales, marketing, production, technology, design, and finance are all included under its umbrella. Accordingly, in every department, improvements can be made to meet customer expectations and achieve organizational goals.
The rise in global competition with countless organizations competing with almost similar product/service quality has been made possible by TQM. As it revolves around quality, the relevance of TQM and its impact on the cost of production and cost to the customer makes it highly important and an irreplaceable part of today’s business world.
TQM has also been used to ideate other concepts that define today’s standards of quality and assurance. Some of them are;
- International Quality standards such as ISO 9000.
- Business Excellence models.
- Quality awards; for example, the Malcolm Baldrige award and Deming Prize.
All of these are based on the principles of TQM.