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Total Quality Management (Lecture 2)

Lecture 2
TQM is:
a) a management approach to long term success
through customer satisfaction.
b) based on the participation of all members of
an organization in improving processes, products,
services and the culture they work in.
c) a philosophy that stresses three (3) principles for
achieving high levels of process performance and
quality. These are:
i. Customer satisfaction
ii. Employee involvement (EI)
iii. Continuous improvement in performance
Customers, whether internal or external, are satisfied
when their expectations have been met or exceeded.
When expectations have been met, good quality is
said to have been achieved. Quality has multiple
dimensions, these include:
i. Value: How well does the product or service serves
the intended purpose for the price customers are
willing to pay? The level of value that a product or
service has in the mind of the customer depends on
the customer’s expectations before purchasing it.
ii. Conformance to specifications: Relates to consistent
quality, on-time delivery or delivery speed. For
example, does a supplier deliver goods within a
specified time?
iii. Support: After sales support is critical to the
overall perception of quality of a product.
iv. Psychological impressions: Quality of a product or
service is often evaluated on the basis of
psychological impressions, that is, image or
aesthetics, atmosphere.
v. Fitness for use: Is the product/service convenient? Is
the product serviceable, durable, stylish, and
reliable? For example, you may define the quality of
an entertainment centre you purchased on the basis
of how easy it was to assemble and its appearance
and styling.
Customers’ perceptions of quality change. Business
success depends on the accuracy of its perceptions
of customer expectations and its ability to bridge the
gap between those expectations and operating
Good quality leads to increased market share leads
to higher profits.
Poor quality leads to an erosion of competitive ability
leads to an increase in cost of producing
A programme in Employee Involvement (EI)includes:
1. Changing organization’s culture
2. Encouraging teamwork
Culture change:
 A main challenge in developing proper culture for TQM is
to define customer for each employee. Customers are
internal or external. For example:
a) purchasing must provide high quality materials on time
for operations.
b) accounting must prepare accurate reports for
Some employees especially those who have little contact with
external customers may have difficulty seeing how their jobs
contribute to the whole effort.
All employees must do a good job of servicing their internal
customers if external customers ultimately are to be satisfied.
In TQM, everyone in the organization must share the view
that quality control is of paramount importance. Defects
should be caught and corrected at the source, not passed
along to internal or external customers. For example, a
consulting team should ensure that its billable hours are
correct before submitting them to the accounting
department. This philosophy is called quality at the source.
Encouraging teamwork:
Employee Involvement (EI) is a key tactic for improving
processes and quality. One way to achieve EI is by the use
of teams.
A team is a small group of persons who have a common
purpose, set their own performance goals and approaches,
and hold themselves accountable for success.
Employees take more pride and interest in their work if
they are allowed to help shape it. Teams die if
management fails to implement many of the
suggestions they generate.
This is the philosophy of continually seeking ways to
improve processes. The focus of continuous
improvement is to reduce waste, for example,
reducing the length of time required to process
requests for loans.
The bases for continuous improvement philosophy
are the beliefs that virtually any aspect of a process
can be improved and that the best persons to effect
changes are the ones closely associated with a