In the previous chapter I have given you the introduction of

Quality and different countrys approach towards it,Now In this

lesson I will tell you about Total Quality management and its
importance
Total Quality Management (TQM) is an enhancement to the
traditional way of doing business. It is a proven technique to
guarantee survival in world-class competition. Only by
changing the actions of management will the culture and
actions of an entire organization be transformed. TQM is for
the most part common sense. Analyzing the three words, we
have:
Total: Make up of the whole.
Quality: Degree of excellence a product or service provides.
Management:Act, art, or manner of handling, controlling,
directing, etc.
Therefore, TQM is the art of managing the whole to achieve
excellence. TQM is defined as both a philosophy and a set of
guiding principles that represent the foundation of a continuously improving organization. It is the application of
quantitative methods and human resources to improve all the
processes within an organization and exceed customer needs
now and in the future. TQM integrates fundamental management techniques, existing improvement efforts, and technical
tools under a disciplined approach.

The Principles of Total Quality

Management
Good product quality requires a coherent program of activities
and policies that combines people, technology, and processes
within an institutional infrastructure that provides the correct
vision, organization, incentives, and support. Total Quality
Management (TQM) synthesizes the most important quality
principles and practices proposed by quality gurus. TQM
addresses both the design and conformance aspects of quality,
and it provides a coherent approach that readily encompasses all
the relevant quality management principles and tools. Success in
quality management is unrelated to the program followed or
techniques utilized; but rather, depends upon whether a TQM
program is in place with policies and structures that fit the
organizational structure and personnel.
TQM is based on the following principles:
1.

Primary responsibility for product quality rests with

top management.

Management must create an organizational structure, product

design process, production process, and incentives that
encourage and reward good quality. Juran has stated clearly that
The critical variable in Japanese quality leadership is the extent
of active participation by senior managers.

11.651

2.

Quality should be customer focused and evaluated

using customer-based standards.

A product is not easy to use, and a service is not courteous and

prompt unless customers say they are. This fact requires
organizations to work closely with their customers to determine
what the customers want in the products and how they receive
value from the products.
3.

The production process and work methods must be

designed consciously to achieve quality conformance.

Using the right tools and equipment, mistake--proofing

processes, training workers in the best methods, and providing
a good work environment help to prevent defects rather than
catching them. In addition, tightly synchronized production
systems with quick communication among workers promote
quick identification and solution of quality problems when they
do occur.
4.

Every employee is responsible for achieving good

product quality.

This trans-lates into self-inspection by workers rather than by

separate quality control per-sonnel and it requires workers to
cooperate in identifying and solving quality problems.
5.

Quality cannot be inspected into a product, so make

it right the first time.

Making it right or doing it right the first time should be the

goal of every worker.
Methods such as poka-yoke and structured machine setups,
which increase the chance of doing it right the first time, should
be utilized as much as possible.
6.

Quality must be monitored to identify problems

quickly and correct quality problems immediately.

Statistical methods can play a useful role in monitoring quality

and identifying problems quickly. But self--inspection and
assessment of work by employees and customer assessments
of quality are important components of the quality monitoring
mechanism.
7.

The organization must strive for continuous

improvement.

Excellent product quality is the result of workers striving to

improve product quality and productivity on an ongoing basis
using experience and experimentation. However, continuous
improvement does not happen on its own. Organizational
structures, work proce-dures, and policies should be established
that promote and accelerate continu-ous improvement.
A variety of organizational mechanisms have been used to
promote continu-ous improvement, such as work teams,
quality circles, and suggestion systems. Each of these methods
utilizes workers who are directly involved in the produc-tion
process as a primary source for improvement ideas. Some

Copy Right: Rai University

TOTAL QUALITY MANAGEMENT

LESSON 2:
INTRODUCTION TO TQM

TOTAL QUALITY MANAGEMENT

experts, however, believe that separate improvement teams

should be used to initiate and guide improvement projects.
8.

Companies must work with, and extend TQM

programs to their suppliers to ensure quality inputs.

For many manufacturing companies, purchased compo-nents

and materials account for well over 50% of their production
costs. Similarly, over 80% of the costs of many wholesalers and
retailers are the costs of goods in-tended for resale. If suppliers
are providing low-quality components, materials, or goods,
then the purchasing company will find it impossible to achieve a
high level of quality in the goods and services it produces. In
fact, many companies now re-quire suppliers to have quality
management programs that have been certified by the customer
or by a recognized certification organization, such as the International Organization for Standardization.
The success of the Japanese in producing quality products can
be attributed to their willingness to borrow and synthesize
ideas from many sources and to the effort of each organization
to customize the quality system to its own character, Some
companies use quality circles, while others do not; some have
extensive suggestion systems, while others do not; some use
statistical methods, while others do not; and some strive for
zero defects, while others simply seek continual im-provement
or more achievable goals such as one defect per 100,000 units,
The success of these companies seems to be unrelated to which
program they follow or which tech-nique they use. Rather,
success depends on whether they have a TOM program in place
with policies and structures that fit their own organizational
culture and personnel.

Basic Approach
1.

A committed and involved management to provide

long-term top-to-bottom organizational support.

Agreement must participate in the quality program. A quality

council must be established to develop a clear vision, set longterm goals, and direct the program. Quality goals are included
in the business plan. An annual quality improvement program
is established and involves input from the entire work force.
Managers participate on quality improvement teams and also act
as coaches to other teams. TQM is a continual activity that
must be entrenched in the cultureit is not just a one-shot
program. TQM must be communicated to all people.
2.

An unwavering focus on the customer, both

internally and externally.

The key to an effective TQM program is its focus on the

customer. An excellent place to start is by satisfying internal
customers. We must listen to the voice of the customer and
emphasize design quality and defect prevention. Do it right the
first time and every time, for customer satisfaction is the most
important consideration.
3.

Effective involvement and utilization of the entire

work force.

TQM is an organization-wide challenge that is everyones

responsibility. All personnel must be trained in TQM, statistical
process control (SPC), and other appropriate quality
improvement skills so they can effectively participate on project
teams. Including internal customers and, for that matter,
10

internal suppliers on project teams is an excellent approach.

Those affected by the plan must be involved in its development
and implementation. They understand the process better than
anyone lese. Changing behavior is the goal. People must come
to work not only to do their jobs, but also to think about how
to improve their jobs. People must be empowered at the
lowest possible level to perform processes in an optimum
manner.
4. Continuous improvement of the business and
production process.
There must be a continual striving to improve all business and
production processes. Quality improvement projects, such as
on-time delivery, order entry efficiency, billing error rate,
customer satisfaction, cycle time, scrap reduction, and supplier
management, are good places to begin. Technical techniques
such as SPC, benchmarking, quality function development, ISO
9000, and designed experiments are excellent for problem
solving.
5.

Treating suppliers as partners.

On the average 40% of the sales dollar is purchased product or

service; therefore, the supplier quality must be outstanding. A
partnering relationship rather than an adversarial one must be
developed. Both parties have as much to gain or lose based on
the success or failure of the product or service. The focus
should be on quality and life-cycle costs rather than price.
Suppliers should be few in number so that true partnering can
occur.
6.

Establish performance measures for the processes.

Performance measures such as uptime, percent nonconforming,

absenteeism, and customer satisfaction should be determined
for each functional area. These measures should be posted for
everyone to see. Quantitative data are necessary to measure the
continuous quality improvement activity.
The purpose of TQM is to provide a quality product and/or
service to customers, which will, in turn, increase productivity
and loser cost. With a higher quality product and lower price,
competitive position in the marketplace will be enhanced. This
series of events will allow the organization to achieve the
objectives of profit and growth with greater ease. In addition,
the work force will have job security, which will create a satisfying
place to work.
As previously stated, TQM requires a cultural change. The table
below compares the previous state with the TQM state for
typical quality elements. This change is substantial and will not
be accomplished in a short period of time. Small organizations
will be able to make the transformation much faster than large
organizations.
New and Old Cultures
Quality Element

Previous State

TQM

Definition

Product-orientated

Customer-oriented

Priorities

Second to service and cost

First among equals

of service and cost.

Decisions

Short-term

Long-term

Emphasis

Detection

Prevention

Copy Right: Rai University

11.651

Operations

System

Responsibility

Quality control

Everyone

Problem Solving

Managers

Teams

Procurement

Price

Life-cycle costs,
partnership

Managers Role

Plan, assign, control,

Delegate, coach,
facilitateand enforce
and mentor

TQM Framework.
The figure shows the framework for the TQM system. It
begins with the knowledge provided by gurus of quality:
Shewhart, Deming, Juran, Figenbaum, Ishikawa, Crosby, and
Taguchi. As the figure shows, they contributed to the
development of principles and practices and/or the tools and
techniques. Some of these tools and techniques are used in the
product and/or service realization activity. Feedback from
internal/external customers or interested parties provides
information to continually improve the organizations system,
product and/or service.

Shewhart
Deming
Juran
Feigenbaum
Ishikawa
Crosby
Taguchi

Tools and
Techniques

Gurus

Principles
and Practices

Products or
Service
Realization

Benchmarking
Information Technology
Quality Management Systems
Environmental Management System
Quality function Deployment
Quality by Design
Failure Mode & Effect Analysis
Products & Service Liability
Total Productive Maintenance
Management Tools
Statistical Process Control
Experimental Design
Taguchis Quality Engineering

Customer

People and Relationships:

Leadership

Approach:
Continuous Process Improvement

Customer Satisfaction
Employee Involvement
Supplier Partnership

Measure:
Performance Measures

TQM Framework
Awareness
An organization will not begin the transformation to TQM
until it is aware that the quality of the product or service must
be improved. Awareness comes about when an organization
loses market share or realizes that quality and productivity go
hand-in-hand. It also occurs if TQM is mandated by the
customer or if management realizes that TQM is a better way to
run a business and compete in domestic and world markets.
Automation and other productivity enhancements might not
help a corporation if it is unable to market its product or service
because the quality is poor. The Japanese learned this fact from
practical experience. Prior to World War II, they could sell their
products only at ridiculously low prices, and even then it was
difficult to secure repeat sales. Until recently, corporations have
11.651

TOTAL QUALITY MANAGEMENT

not recognized the importance of quality. However, a new

attitude has emergedquality first among the equals of cost
and service. To sum it up, the customer wants value.

Errors

Gain in Productivity with Improved Quality

Item

Before

After

Improvement

Improvement

10% Nonconforming

5% Nonconforming

Relative total cost for 20 units

1.00

1.00

Conforming units

18

19

Relative cost for nonconforming units

0.10

0.05

Productivity increase

(100) (1/18)=5.6%

Capability increase

(100) (1/18)=5.6%

Profit increase

(100) (1/18)=5.6%

Quality and productivity are not mutually exclusive. Improvements in quality can lead directly to increased productivity and
other benefits. The table above illustrates this concept. As seen
in the table, the improved quality results in a 5.6% improvement in productivity, capacity, and profit. Many quality
improvement projects are achieved with the same work force,
same overhead, and no investment in new equipment.
Recent evidence shows that more and more corporations are
recognizing the importance and necessity of quality improvement if they are to survive domestic and world-wide
competition. Quality improvement is not limited to the
conformance of the product or service to specifications; it also
involves the inherent quality in the design of the system. The
prevention of product, service, 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 remedies. It
takes a long time to build the appropriate emphasis and
techniques into the culture. Overemphasis on short-term
results and profits must be set aside so long-term planning and
constancy of purpose will prevail.
Obstacles
Many organizations, especially small ones with a niche, are
comfortable with their current state. They are satisfied with the
amount of work being performed, the profits realized, and the
perception that the customers are satisfied. Organizations with
this culture will see little need for TQM until they begin to lose
market share.
Once an organization embarks on TQM, there will be obstacles
to its successful implementation. They are given below.

Copy Right: Rai University

11

TOTAL QUALITY MANAGEMENT

Lack of Management Commitment

In order for any organizational effort to succeed, there must be

substantial management commitment of management time
and organizational resources. The purpose must be clearly and
continuously communicated to all personnel. Management
must consistently apply the principles of TQM.
Robert Galvin of Motorola said that only the CEO can ensure,
even in times of great pressure, that quality and customer
satisfaction are preserved. In a survey of 188 quality professionals, 66% reported that managements compensation is not
linked to quality goals such as failure costs, customer complaints, and cycle time reduction.
Inability to Change Organizational Culture

Changing an organizations culture is difficult and will require as

much as five years. Individuals resist changethey become
accustomed to doing a particular process and it becomes the
preferred way. Management must understand and utilize the
basic concepts of change. They are:
1. People change when they want to and to meet their own
needs.
2. Never expect anyone to engage in behavior that serves the
organizations values unless adequate reason (way) has been
given.
3. For change to be accepted, people must be moved from a
state of fear to trust.
It is difficult for individuals to change their way of doing
things; it is much more difficult for an organization to make
cultural change.
Management by exhortation and inspiration will fail. Speeches,
slogans, and copings that are supposed to motivate people are
only effective for a short period of time. Impediments to a
cultural change are the lack of effective communication and
emphasis on short-term results. Organizations that spend
more time planning for the cultural aspects of implementing a
TQM program will improve their chances of success.
Improper Planning

All constituents of the organization must be involved in the

development of the implementation plan and any
modifications that occur as the plan evolves. Of particular
importance is the two-way communication of ideas by all
personnel during the development of the plan and its
implementation. Customer satisfaction should be the goal
rather than financial or sales goals. Peterson Products, a metal
stamping firm near Chicago, improved on-time delivery, which
resulted in a 25% increase in sales. Focus on quality and the
other goals will follow.
Lack of continuous Training and Education

Training and education is an ongoing process for everyone in

the organization. Needs must be determined and a plan
developed to achieve those needs. Training a education are
most effective when senior management conducts the training
on the principles of TQM. Informal training occurs by
communicating the TQM effort to all personnel on a continual
basis.

12

In a study by Tamimi and Sebastianelli, lack of training in

group discussion and communication techniques, quality
improvement skills, problem identification, and the problemsolving method was the second most important obstacle.
Incompatible Organizational Structure and Isolated
Individuals and Departments

Differences between departments and individuals can create

implementation problems. The use of multifunctional terms
will help to break down long-standing barriers.
Restructuring to make the organization more responsive to
customer needs may be needed. Individuals who do not
embrace the new philosophy can be required to leave the
organization. Adherence to the six basic concepts will minimize
the problem over time.
At Spartan Light Metal Products, Inc. in Sparta, IL, product
support teams composed of three members from design,
quality, and production are assigned to each customer segment.
Ineffective Measurement Techniques and Lack of Access
to Data and Results

Key characteristics of the organization should be measured so

that effective decisions can be made. In order to improve a
process you need to measure the effect of improvement ideas.
Access to data and quick retrieval is necessary for effective
process.
People Bank of Bridgeport, CT found that extra inspection,
training, and management encouragement did not help a high
error rate. Finally the bank investigated the root causes of the
problem and corrected them which virtually eliminated the
problem.
Paying Inadequate Attention to Internal and External
Customers.

Organizations need to understand the changing needs and

expectations of their customers. Effective feedback
mechanisms that provide data for decision making are necessary
for this understanding. One way to overcome this obstacle is to
give the right people direct access to the customers. Ingersol
Rand of Princeton, NJ had its design team of marketing,
engineering, and manufacturing conduct focus groups of
customers throughout the country with the result that it was
able to develop a new grinder in one-third the usual cycle time.
When an organization fails to empower individuals and teams,
it cannot hold them responsible for producing results.
Inadequate Use of Empowerment and Teamwork

Teams need to have the proper training and, at least in the

beginning, a facilitator, whenever possible, the teams
recommendations should be followed. Individuals should be
empowered to make decisions that affect the efficiency of their
process or the satisfaction of their customers. Solar Turbines,
Inc. flattened its organization by restructuring into work teams
and delegating authority to the point of customer contact or to
the work performed.
Failure to Continually Improve

It is tempting to sit back and rest on your laurels. However, a

lack of continuous improvement of the process, product, and/
or service will even leave the leader of the pack in the dust. Will

Copy Right: Rai University

11.651

Benefits of TQM
As I have told about TQM and approach to TQM ,there are
benefits of TQM ,I am going to discuss about the benefits of
TQM.
According to a survey of manufacturing firms in Georgia, the
benefits of TQM are improved quality, employee participation,
teamwork, working relationships, customer satisfaction.
Employee satisfaction, productivity, communication, profitability, and market share.
TQM is a good investment as shown by a ten-year study by
Hendricks and Singhai. They showed that there is a strong link
between TQM and financial performance. The researchers
selected a group of 600 publicly traded organizations that had
won awards for effectively implementing TQM. They then
selected a control group similar in size and industry to the
award winners. Performance of both groups was compared
during the five years prior to the award and five years after
winning the awards. No difference was shown between the two
groups prior to the award. However, as shown below the
award group far outstripped the control group during the fiveyear period after the award.
Description

Control

Award

Growth in Operating Income

43%

91%

Increase in Sales

32%

69%

Increase in Total Assets

37%

79%

The study also showed that stock price performance for the
award winners was 114% while the S & P was 80%. In
addition, the study showed that small organizations out
performed larger organizations. Recent studies have shown that
only about 30% of manufacturing organizations have successfully implemented TQM.
Do TQM Programs always succeed?
How can TQM be a tremendous success in some cases and a
terrible failure in others? Is it because some companies used
statistical quality control, while others did not? Is it because
some companies used concurrent design and others did not? Is
it because some used quality circles and others did not?
When we look at the principles of TQM, it is clear that they
make eminent sense and a quality system that embodies these
principles should be successful. Failures attributed to TQM are
not due to a deficiency in the programs philosophy or its basic
principles. Certainly no one would claim that top management
should not take responsibility and be involved in quality, or that
the company should not strive to improve or not consider
customer preferences and standards. Nor is TQM too new or
conceptually complicated. Many of the principles of TQM have
been used for several decades, and the basic features of TQM
are quite simple.
The primary cause of failure is in the implementation of TQM.
Many business and mil-itary leaders and sports coaches claim
that the secret of success is not necessarily to have the best

11.651

strategy (which may not exist), but rather to have a strategy that
is well thought out and fits the culture and personnel of the
organization (exploits its strengths), and to have everyone in
the organization committed to the strategy and its underlying
goals. By reading the comments of the managers who failed in
their imple-mentations of TQM, we can see that failure was
almost guaranteed. They lacked a real strategy and commitment
from management and the employees.
The most common causes for TQM failures appear to be the
following:
1. Lack of Commitment by Top Management. Top
management cannot simply pro-claim that the organization
will now use TQM. Management must itself learn what
TQM is, establish the organizational structure and reward
system to support it, and be willing to devote the
significant up-front resources and effort required to
implement and monitor it.
2. Focusing on Specific Techniques Rather Than on the
System: A surprising num-ber of managers read an article
about the success another company has had with some
quality management technique, such as SPC or quality circles,
and assume the technique will work for them as well. In
most cases, the technique worked for the first company
because it was part of a larger quality management system
that supported its use, and it evolved and was implemented
over time. No simple recipe of techniques ensures high
quality (take two cups of SPC and one cup of quality circles
and sprinkle the mixture with Demings 14 points). TQM is
an entire system with reinforcing and synergistic
components. Although TQM can and maybe should be
implemented on a small scale initially, the focus needs to be
on the system as a whole and the achievement and
improvement of quality as a process, not a slogan, formula,
or technique.
3.

Not 0btaining Employee Buy-in and Participation. The

success of TQM depends on employee buy-in and
commitment to its principles and their increased responsibility for quality. This commitment cannot be achieved by
edict. It requires informing employees about the reasons for
and goals of a TQM system, and involv-ing them in setting
up the training and implementation of the system. They
must also see clearly why it is in their best interest to
participate.
Middle managers especially must be sold on TQM or they
must be taken out of the process. TQM transfers some job
responsibilities and authority to the lowest levels in the
organization, which usually reduces the number of middle
managers needed and changes the functions of those
managers who remain. Unless this issue is addressed,
middle managers can sabotage the entire implementation.-

4. Program Stops with Training. Some organizations obtain

management and employee commitment and provide
training but then expect that .the rest will happen on its
own; It wont. The next step is crucial: turning the training
into action. This can take several forms, such as specific
quality improvement projects or the creation and operation
of a suggestion system. These steps must produce clear im-

Copy Right: Rai University

13

TOTAL QUALITY MANAGEMENT

Rogers said it best,Even if youre on the right track, youll get

run over if you just sit there. Even though Champion
Mortages 1998 business volume increased 59%, it continues to
address culture, staff, and services issues.

TOTAL QUALITY MANAGEMENT

provements in the system. Nothing ignites a TQM, or any

production improve-ment system, more than initial visible
successes.
5. Expecting Immediate Results, Not a Long-Term
Payoff. For most companies TQM involves a complete
organizational and cultural change. Such changes do not
occur quickly, and significant tangible results may take one or
two years to achieve. Certainly it is helpful to achieve some
tangible, quick successes. But real-istically, these quick
successes are likely to be small at first. Too many companies
gave up on TQM after six months because they did not see
large benefits. To ac-celerate benefits, some companies try to
do too much too fast. Terrence Ozan of Ernst and Young,
who has studied TQM implementation, found this to be a
pre-scription for failure: A lot of companies tried to
implement 9,000 new prac-tices simultaneously. But you
dont get results that way. Its just too much.
6. Forcing the Organization to Adopt Methods That Are
Not Productive or Compati6le with its Production
System and Personnel. Not all quality management techniques are suitable for every organization. For example, in
some production processes, such as one that makes
customized goods, SPC is not practical or does not provide
sufficient benefit to justify the effort. When companies try
to force the use of techniques and organizational structures
in situations where they do not fit, not only do those
techniques fail, they undermine confidence in the entire
TQM system. Anger and frustration are then directed to the
entire system rather than to the real cause. Companies need
to be flexible in how they implement spe-cific aspects of
TQM, and they must be willing to backtrack quickly when
some as-pect of it clearly is not appropriate for their
situation.

mented more successfully by cooperative people. So a major

consideration in deciding where to implement the first changes
is the personnel and performance history of the units. Those
departments or facilities with enthusiastic, cooperative personnel should be prime candidates for the initial implementation.
When a quality management program is implemented successfully in one part of a company by enthusiastic employees, that
program can become a model and a rallying point for other
divisions and provide a talent pool that can be tapped to help
other units design and implement their quality management
programs. These successes can create momentum that carries the
program throughout the organization.

Exercise
Q1.What is TQM?Explain the principles on which TQM is
based?
Q2.What is the basic approach to achieve TQM?
Q3.What are the dimensions of Quality?Describe them in your
own word.
Q4.Compare and contrast the Quality aspects of goods/
manufacturing and services?
Q5.What are the Obstacles for implementing TQM?Describe
them.
With that, we come to the end of todays discussion. I hope
it has been an enriching and satisfying experience. See you
around in the next lecture. Take care. Bye .
Notes

We have described reasons why TQM sometimes fails, but why

does TQM succeed and what factors contribute to success? The
necessary ingredients for TQM to succeed are implicit in the
causes of failure. Successful TQM systems are the result of a
commit-ted top management that takes the steps necessary to
educate all employees about the reasons for adopting TQM,
sharing a vision, getting them to buy into and participate in
designing and implementing the system, providing the
necessary training, following up with action, and then having
the patience to wait for benefits that may take years to be fully
realized.
One crucial question is, where should we start? Clearly, we want
to start where we believe we have the best chance of producing
substantial benefits quickly. A large per-centage of quality costs
and defects involve a relatively small number of products, production activities, or departments (the Pareto principle). By
collecting good data on where quality problems and costs occur,
we can locate those areas with the greatest potential for improvement. Second, once we identify the major problem areas,
we have to deter-mine what actions are necessary to solve the
problems-quickly and easily, if possible. Frequently, there is no
simple or easy solution, and we may be better off initially
attack-ing problems that have fewer potential payoffs but can be
solved more quickly and eas-ily. Third, changes can be imple-

14

Copy Right: Rai University

11.651