The concept of TQM rests largely on five principles:

1. Produce quality work the first time.

2. Focus on the customer.
3. Have a strategic approach to improvement.
4. Improve continuously.
5. Encourage mutual respect and teamwork.
To be effective in improving quality, TQM must be supported at all levels of a firm, from the highest executive to the
lowest-level hourly employee. TQM extends the definition of quality to all functional areas of the organization,
including production, marketing, finance, and information systems. The process begins by listening to customers'
wants and needs and then delivering goods and services that fulfill these desires. TQM even expands the definition of
customer to include any person inside or outside the company to whom an employee passes his or her work. In a
restaurant, for example, the cooks' customers are the waiters and waitresses. This notion encourages each member
of the organization to stay focused on quality and remain fully aware of his or her contribution to it and responsibility
for it.
The TQM philosophy focuses on teamwork, increasing customer satisfaction, and lowering costs. Organizations
implement TQM by encouraging managers and employees to collaborate across functions and departments, as well
as with customers and suppliers, to identify areas for improvement, no matter how small. Teams of workers are
trained and empowered to make decisions that help their organization achieve high standards of quality.
Organizations shift responsibility for quality control from specialized departments to all employees. Thus, total quality
management means a shift from a bureaucratic to a decentralized approach to control.
An effective TQM program has numerous benefits. Financial benefits include lower costs, higher returns on sales and
investment, and the ability to charge higher rather than competitive prices. Other benefits include improved access to
global markets, higher customer retention levels, less time required to develop new innovations, and a reputation as
a quality firm. Only a small number of companies use TQM because implementing an effective program involves
much time, effort, money, and patience. However, firms with the necessary resources may gain major competitive
advantages in their industries by implementing TQM.
Total quality management (TQM) is an improvement program which provides tools and
techniques for continuous improvement based on facts and analysis; and if properly
implemented, it avoids counterproductive organizational infighting.

The most popular approach to continuous improvement is known as total quality

management (TQM). There are two major characteristics of total quality management
(TQM) (1) a focus on serving customers and (2) systemic problem solving teams made up
of front line workers. A variety of specific tools are available to aid teams in their problems
solving. One of these tools is benchmarking which involves studying organizations that are
among the best in the world at performing a particular task.

Total quality management is a popular "quality management" concept. However, it is about much more
than just assuring product or service quality. TQM is a business philosophy - a way of doing business. It
describes ways to managing people and business processes to ensure complete customer satisfaction at
every stage. TQM is often associated with the phrase - "doing the right things right, first time". This
revision note summarises the main features of TQM.

Like most quality management concepts, TQM views "quality" entirely from the point of view of "the
customer".
All businesses have many types of customer. A customer can be someone "internal" to the business (e.g.
a production employee working at the end of the production line is the "customer" of the employees
involved earlier in the production process).

A customer can also be "external to the business. This is the kind of customer you will be familiar with.
When you fly with an airline you are their customer. When Tesco's buys products from food
manufacturers, it is a customer.

TQM recognises that all businesses require "processes" that enable customer requirements to be met.
TQM focuses on the ways in which these processes can be managed - with two key objectives:

1 100% customer satisfaction

2 Zero defects

The Importance of Customer - Supplier Relationships - "Quality Chains"

TQM focuses strongly on the importance of the relationship between customers (internal and external)
and supplier. These are known as the "quality chains” and they can be broken at any point by one
person or one piece of equipment not meeting the requirements of the customer. Failure to meet the
requirements in any part of a quality chain has a way of multiplying, and failure in one part of the
system creates problems elsewhere, leading to yet more failure and problems, and so the situation is
exacerbated.

The ability to meet customers’ (external and internal) requirements is vital. To achieve quality
throughout a business, every person in the quality chain must be trained to ask the following questions
about every customer-supplier chain:

Customers
• Who are my customers?
• What are their real needs and expectations?
• How can I measure my ability to meet their needs and expectations?
• Do I have the capability to meet their needs and expectations? (If not, what must I do to improve this
capability?)
• Do I continually meet their needs and expectations? (If not, what prevents this from happening when
the capability exists?)
• How do I monitor changes in their needs and expectations?

Suppliers:
• Who are my internal suppliers?
• What are my true needs and expectations?
• How do I communicate my needs and expectations to my suppliers?
• Do my suppliers have the capability to measure and meet these needs and expectations?
• How do I inform them of changes in my needs and expectations?

Main Principles of TQM

The main principles that underlie TQM are summarised below:

Prevention Prevention is better than cure. In the long run, it is cheaper to stop products defects
than trying to find them
Zero defects The ultimate aim is no (zero) defects - or exceptionally low defect levels if a product
or service is complicated
Getting things right first Better not to produce at all than produce something defective
time

Quality involves everyone Quality is not just the concern of the production or operations department - it involves
everyone, including marketing, finance and human resources

Continuous improvement Businesses should always be looking for ways to improve processes to help quality

Employee involvement Those involved in production and operations have a vital role to play in spotting
improvement opportunities for quality and in identifying quality problems

Introducing TQM into a Business

TQM is not an easy concept to introduce into businesses - particularly those that have not traditionally
concerned themselves too much with understanding customer needs and business processes. In fact -
many attempts to introduce TQM fail!

One of the reasons for the challenge of introducing TQM is that it has significant implications for the
whole business.

For example, it requires that management give employees a say in the production processes that they
are involved in. In a culture of continuous improvement, workforce views are invaluable. The problem
is - many businesses have barriers to involvement. For example, middle managers may feel that their
authority is being challenged.

So "empowerment" is a crucial part of TQM. The key to success is to identify the management culture
before attempting to install TQM and to take steps to change towards the management style required
for it. Since culture is not the first thing that managers think about, this step has often been missed or
ignored with resultant failure of a TQM strategy.

TQM also focuses the business on the activities of the business that are closest to the customer - e.g.
the production department, the employees facing the customer. This can cause resentment amongst
departments that previously considered themselves "above" the shop floor.

Advantages of Total Quality Management:

1. Improves reputation- faults and problems are spotted and sorted quicker (zero defects)

2. Higher employee morale– workers motivated by extra responsibility, team work and
involvement in decisions of TQM

3. Lower costs – Decrease waste as fewer defective products and no need for separate

4. Quality Control inspectors

Disadvantages of Total Quality Management:

 1. Initial introduction costs- training workers and disrupting current production whilst being
implemented

2. Benefits may not be seen for several years

3. Workers may be resistant to change – may feel less secure in jobs

The advantages of total quality management is that the company benefits by having a dedicated
workforce who strive and achieve in improving the production line. The raw materials would have
to be inspected by workers and line managers to ensure that the goods are free from defects
which eliminates and reduces wastage. This in turn reduces costs. The TQM method also has
the advantage by having a more productive and successful workforce strategy also has better
motivation and who know what they are doing. The TQM also works by having quality circles of
team members and management where their ideas in improving the decision making process is
also accomplished. Employees in quality circles are more motivated in the company in that the

TQM also means that product standards such as International standards have to be adhered to.
Every aspect of the business is part of the TQM policy. The focus is on the customer in meeting their
needs first. Where goods are ordered and distributed the TQM works by co ordinating deliveries of
supplies to times when the business needs it most. This process the goods being over ordered or
having shortages of stock and therefore the costs of holding excess or holding too much stock is
reduced.

The disadvantages of TQM is that it can lead to bureaucracy where ideas are mentioned and end up
being rejected or stifled. The delays by having these inspections and process improvements can
also take time to see through and also the money needed to implement TQM principles also adds to
costs. By focusing too much on the customers, the production based method might have a cheaper
and more faster way of doing business and this method is rejected. Some managers and employee
groups might be hesitant to change into a TQM based approach if the company is doing well now.
Also the benefits of TQM are not guaranteed to be successful simply based on a complete
implementation. Customers themselves along with the market will decide upon the success of the
company. Also the costs of inspection of processes as well as Research and development projects
might be too costly.

TQM is a new method of quality management involving many levels and processes of
different functions, but requiring an integrated cooperation. Characteristics of TQM can be
listed as follows:

1. Target:
In TQM, the most important target to achieve is Quality; Quality policy must be set toward
customer. Meeting customer's needs mean satisfying every customer requirement but not
trying to reach some quality standards set before. Never stop innovating - never stop
perfecting the quality is one of the most important principles of TQM.

2. Scope:

To ensure the quality of service and product, TQM system requires the extending of
production process to suppliers and sub-contractors. Normally, the trading of material in
production may account for 70% of final product cost (depend on types of product).
Therefore, to ensure the quality of the input material, it is necessary to set up specific
standards for each type of material to control its quality. It is also necessary to change the
method of placing order to make it suitable with the production process.

3. Form:

In stead of controlling the quality of the finished product (after production), TQM sets up
plans and programs to supervise and prevent problems right before the production process.
Statistical tools are used to supervise, quantitatively analyze the results as well as factors
affecting the quality, consider the reasons and take appropriate prevention methods.

4. Basis of TQM system:

The basis of TQM practice in the company is Human. Talking about quality, people usually
think about the product quality. But it is the quality of employees that is the main concern of
TQM. Of the three factors of Business, which are hard factor (machines, equipments,
money...), Soft factor (methods, secrets, information...) and Human factor, Human is of the
first concern to TQM.

The basic principle for implementation of TQM is that the qualification of employees is
developed fully and integratedly through training, delegation and assignment.

5. Organization:

TQM system is cross organized and functioned in order to manage, integratedly corporate
with different activities of the system and facilitate group working. The implementation of
TQM requires the participation of high and middle level managers. A proper organization will
help duties to be assigned clearly. Thus, TQM needs new management model, with different
characteristics from the previous model.

6. Management skills and tools:

Methods to implement must be based on the principle "do correctly at the very beginning",
in researching and designing to minimize economic cost. Strictly apply DEMMING circle
(PDCA) to make foundation for the continuous quality improvement.