Total quality management and its effect on Productivity

Introduction:

There are many definitions of total quality management around. Some define total quality
management in a way different to some others. But in general definition of total quality
management should contain the following characteristics.

TQM is a customer focused approach

Aims at satisfying the customer or delighting them
Provides best quality product at lowest possible price
It is companywide strategy
Involves everyone in the organization
Prevention of defects is the way and the target is zero defects
Total quality management is methodical
It makes moves based on information
It is a continuous process

If I am to put all these in a single sentence, I will define total quality management as follows

“TQM is a process and philosophy of achieving best possible outcomes from the inputs, by
using them effectively and efficiently in order to deliver best value for the customer, while
achieving long term objectives of the organization”

Please note I define total quality management (TQM) here only to give you some understanding
about the subject. If you want more accurate and well known definitions you can refer books
written by TQM Gurus.

It is a well known fact that TQM movements and lean manufacturing had a close relationship. In
fact in some cases we can not differentiate between lean manufacturing and TQM techniques.
Understanding Total Quality Management is therefore very important in the attempt of
understanding lean manufacturing.

Implementation Principles and Processes

A preliminary step in TQM implementation is to assess the organization's current reality.
Relevant preconditions have to do with the organization's history, its current needs, precipitating
events leading to TQM, and the existing employee quality of working life. If the current reality
does not include important preconditions, TQM implementation should be delayed until the
organization is in a state in which TQM is likely to succeed.

If an organization has a track record of effective responsiveness to the environment, and if it has
been able to successfully change the way it operates when needed, TQM will be easier to
implement. If an organization has been historically reactive and has no skill at improving its
operating systems, there will be both employee skepticism and a lack of skilled change agents. If
this condition prevails, a comprehensive program of management and leadership development
may be instituted. A management audit is a good assessment tool to identify current levels of
organizational functioning and areas in need of change. An organization should be basically
healthy before beginning TQM. If it has significant problems such as a very unstable funding
base, weak administrative systems, lack of managerial skill, or poor employee morale, TQM
would not be appropriate.5

However, a certain level of stress is probably desirable to initiate TQM. People need to feel a
need for a change. Kanter (1983) addresses this phenomenon be describing building blocks
which are present in effective organizational change. These forces include departures from
tradition, a crisis or galvanizing event, strategic decisions, individual "prime movers," and action
vehicles. Departures from tradition are activities, usually at lower levels of the organization,
which occur when entrepreneurs move outside the normal ways of operating to solve a problem.
A crisis, if it is not too disabling, can also help create a sense of urgency which can mobilize
people to act. In the case of TQM, this may be a funding cut or threat, or demands from
consumers or other stakeholders for improved quality of service. After a crisis, a leader may
intervene strategically by articulating a new vision of the future to help the organization deal
with it. A plan to implement TQM may be such a strategic decision. Such a leader may then
become a prime mover, who takes charge in championing the new idea and showing others how
it will help them get where they want to go. Finally, action vehicles are needed and mechanisms
or structures to enable the change to occur and become institutionalized.8

Problem statement:

The problem for us is to check whether TQM play any role in productivity or not, we will carry
out this whole research for this purpose and than we will draw the conclusion in favor or in
against of our hypothesis that is “TQM effects Productivity” or “TQM doesn’t effect
Productivity”

Broad problem Area:

In this section we will see the entire effects of TQM in an organization, which are directly related
to productivity. After study this we will be able to know that implementing TQM in any
organization it will be in benefit.

“In today's globally competitive market, the situation is to buy whichever is of good quality and
low cost. The organisations have started with a rigour to have an edge over the global
competition and in the process some have become successful. The quality movement, which
drives every organisation towards the global market, seems to increase its competitive advantage
for better market acceptance.”

This was a conclusion of a study drawn from a study conducted by DR.Gomathi viswanthan1
While focusing the future of markets and the future customer we have to emphasize on TQM, many studies have been carried out for this purpose , one of the study
conclude that

“
In conclusion, this paper proposes that manufacturing businesses take a closer look at the TQM philosophy in
general, and specifically, how is it to be used in their environment. We suggest that businesses use TQM ideals
to forge new relationships with their trading partners. Furthermore, businesses must undertake a challenge to
design operations using seamless boundaries in internal processes and external transactions. Our research
finds that instantaneous response to changing market dynamics will be the single most important challenge of
the future. It will require a new definition of quality and TQM alike” 2

The first part is providing the customers with quality goods involves purchasing those
products from suppliers or getting quality parts to make your own product. An important
aspect of Kurtusian TQM is to help the supplier provide quality to your company.

Often companies browbeat their suppliers into providing goods at low costs. Wal-Mart has
been known to be very tough on suppliers, even driving some out of business if they did not
bend to Wal-Mart's demands. Other companies have also used such negative tactics.

By working closely with suppliers, you can provide a partnership where you get the quality
supplies needed to gain your competitive advantage.

Your workers proved services that allow you to make quality products. Others deal with the
customers and provide quality service to those customers. Courteous sales representatives
can make for a pleasant buying experience for the customers.

Some companies demand much from their workers and even if they pay them well, they do
not have a truly motivated staff. Some companies even demand that the sales people smile
and act friendly, even if they don't feel like it.

Making the workers part of the team and helping them provide quality work can give you a
good competitive advantage on competition that may have an unhappy workforce.

By these study we can conclude that implementing TQM in any organization will bless it with
many benefits .

Effects of tqm

The research literature on QM has identified numerous studies across the world.
It is said that QM has the potential to not only increase competitiveness and
organizational effectiveness but also improve product quality and organizational
performance (Ahire et al., 1996; Opara, 1996; Bayazit & Karpak, 2007; Ortiz et al.,
2006). Specifically, Powell (1995) raised a series of questions regarding the
relationship between QM and performance. He suggests that there are significant
relationships between QM, competitive advantage and business performance. In
addition, several studies have succeeded in providing evidence that TQM has a
positive impact on financial performance and/or overall performance (Schaffer &
Thompson, 1992; Opara, 1996; Cherkasky, 1992; Agus & Hassan; 2000; Bayazit &
Karpak, 2007; Kaynak, 2003; Ortiz et al., 2006). Agus (2001) found that training and
top management commitment play very important roles in TQM implementations in
public listed manufacturing companies. The overall findings of that study point to the
significant and positive impact of QM on competitive advantage and customer
satisfaction, which, in turn, significantly improves the financial performance of these
companies. On the other hand, Deming (1986) argued that improvements in quality do
create corresponding improvements in productivity by reducing costs, errors, rework,
and delays.
Contemporary Management Research 80
Empirically, the purpose of this study is also to present an explicit result on the
relationship between QM, productivity and profitability where other researchers have
perhaps known or describe them only implicitly. There are studies which suggest that
QM improves performance but, with a few exceptions, rarely support it with statistical
evidence. This study is one of few attempts to estimate the effects of implementing
QM programs. It fills a gap that exists in the literature on QM in the electronics and
electrical industry in Malaysia.

1.http://EzineArticles.com?expert=Dr._Gomathi_Viswanathan
_
2. Journal: International Journal of Operations & Production Management
Volume: 21
Number: 5/6
Year: 2001
pp: 855-876
Copyright ©MCB UP Ltd
ISSN: 0144-3577

3. http://www.school-for-champions.com/competition/tqm.htm