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 capabilities. 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 product/service. 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 management. 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 process.