Chapter 01: Introduction to
Total Quality Management
(TQM)
TQM01/MGT101: Total Quality Management
Rodelle Yap Dacumos, IE, MBA
Total Quality Management
(the entire organization, all parties, all departments and functions)
(degree of excellence that a product or service provides)
(art and science of handling, controlling, directing etc.)
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Total Quality Management
Total Quality Management (TQM)
- is an enhancement to the traditional way of doing business.
- a structured approach to overall organizational management.
The focus of TQM is to improve the quality of an organization’s outputs
including goods and services through the continual improvement of
internal practices.
TQM 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 is the continuous process of detecting and reducing or eliminating
errors in manufacturing, streamlining supply chain management,
improving customer experience and ensuring that employees are up to
date with their training.
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Total Quality Management
 Total Quality Management was
introduced in 1950’s.
 It was a term developed by
Dr. William Edwards Deming,
a management consultant
whose work had a great
impact on Japanese
manufacturing.
“…Without data you’re just
another person with an
opinion…”
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Quality
According to Dr. Deming:
“Quality may be defined as an excellent product or
service that fulfills or exceeds customer expectations.”
Therefore, Quality can be quantified as:
Q=P/E
Where,
Q – Quality
P – Performance
E - Expectations
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Quality Awareness
An organization will not begin the transformation to TQM until it
is aware that the quality of the product or service that it provides
must be improved.
Awareness comes about when an organization starts to lose
market share or when it realizes that quality and productivity
must always go hand-in-hand.
Quality awareness is the way to promote quality activities by
emphasizing quality at all stages of the business, which can
help solve complex problems and achieve excellence.
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Quality Awareness
DIMENSIONS OF QUALITY
Performance: Primary product characteristics, such as the brightness of the picture.
Features: Secondary characteristics, added features, such as remote control.
Conformance: Meeting specifications or industry standards, workmanship.
Reliability: Consistency of performance over time, average time for the unit to fail.
Durability: Useful life, includes repair.
Service: Resolution of problems and complaint, ease of repair
Reputation: Human-to-human interface, such as the courtesy of the dealer.
Aesthetics: Sensory characteristics, such as exterior finish.
Response: Past performance and other intangibles, such as being ranked first.
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Quality Awareness
MANUFACTURING INDUSTRIES
SERVICE INDUSTRIES
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TQM Framework
TQM Framework
TQM is based on the belief that an
organization can build long-term
success by having all its members,
from low-level workers to its
highest ranking executives, focus
on improving quality and, thus,
delivering customer satisfaction.
Approach: continuous process
improvement
Measure: quantitative performance
metrics
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Seven (7) Basic Concepts of TQM
1. Customer Focus: Decisions of how to organize resources to best serve
customers starts with a clear understanding of customer needs and the
measurement of customer satisfaction.
For example, the Red Cross surveys its blood donors to determine how it
can make the blood donation experience more pleasant and convenient. It
collects information on the place, date and time donors came in, and asks
donors questions of whether the donation time was convenient, whether they
were treated with respect and gratitude, how long they had to wait to donate,
and whether parking was adequate. By understanding donors’ needs and
experiences, Red Cross managers can determine strengths and
weaknesses of the donation service process and make adjustments if
necessary.
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Seven (7) Basic Concepts of TQM
2. Continuous improvement: An organizational culture that promotes
continuous learning and problem solving is essential in the pursuit of zero
defects.
The Toyota Production System (TPS) is a universal continuous improvement
system that has been effectively applied to many different types of
organizations, including the health care industry. Essential elements of the
TPS culture include studying process flow, collecting data, driving out
wasteful non-value-added activities, and making everyone responsible for
quality improvement. In the case of health care, the TPS approach enabled
one hospital to analyze the causes of patient infections from catheters and
pneumonia in patients on ventilators. With simple changes in procedures that
prevented patients from getting these secondary illnesses, the hospital was
able to save USD 40,000 per patient in these cases.
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Seven (7) Basic Concepts of TQM
3. Employee Involvement: Employees in a TQM environment have very
different roles and responsibilities than in a traditional organization. They are
given responsibility, training, and authority to measure and control the quality
of the work they produce, they work together in teams to address quality
issues, they are cross-trained to be able to perform multiple tasks and have a
greater understanding of the total production process, and they have a more
intimate understanding of the operation and maintenance of their equipment.
Employees are essential to the building of a continuous improvement
organization.
4. Quality Tools: There are seven basic quality tools that are used by frontline workers and managers in monitoring quality performance and gathering
data for quality improvement activities. These tools include: cause-andeffect (fishbone) diagrams, flowcharts, checklists, control charts,
scatter diagrams, Pareto analysis, and histograms. The beauty of these
tools is that they are easy to understand and apply in on-going quality efforts.
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Seven (7) Basic Concepts of TQM
5. Product Design: Product design is a key activity to avoid costly internal
and external failure costs.
For example, when a dental office designs the service process, it might have
patients fill out a form that covers important information on general health
issues, allergies, and medications. This helps to avoid future complications
and problems. Staff, hygienists, and dentists are highly trained to follow
proper procedures, the facility is both functional and pleasant, and the
equipment and tools are state of the art to ensure that the patient’s desired
outcome is achieved. In a manufacturing setting, products should be
designed to maximize product functionality, reliability, and manufacturability.
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Seven (7) Basic Concepts of TQM
6. Process Management: “Quality at the Source” is an important concept in
TQM. It means that managers and employees should be focused on the
detailed activities in a process where good or bad quality is created.
For example, in a Toyota plant in the United States in Georgetown, Kentucky,
one of the work stations was responsible for installing seat belts and visors in
every vehicle that came along the assembly line. There were 12 possible
combinations of visors and seat belts that would go into any particular
vehicle and the worker had to select the right combination and install the
items in the vehicle in 55 seconds. Even the best workers made several
errors during a shift on this activity. After studying the process, the workers
came up with an idea to put all the items for a particular vehicle model in a
blue plastic tote. With this change, the worker only had to make one decision
per vehicle. Almost all the errors from the previous system were eliminated
with this simple solution.
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Seven (7) Basic Concepts of TQM
7. Supplier Quality: The focus on quality at the source extends to suppliers’
processes as well, since the quality of a finished product is only as good as
the quality of its individual parts and components, regardless of whether they
come from internal or external sources.
Sharing your quality and engineering expertise with your suppliers, having a
formal supplier certification program, and including your suppliers in the
product design stage are important measures to take to ensure that quality at
the source extends to the supplier network.
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TQM Gurus (Partial List)
DEMING
CROSBY
W. Edwards Deming
Philip Crosby
 Statistical Process Control
 Quality is Free
 Conformance to Requirement
JURAN
SHEWHART
Joseph Juran
Walter Shewhart
 Return On Investment
 PDSA Cycle
 Statistical Quality Control
FEIGANBAUM
ISHIKAWA
Armard V. Feiganbaum
Kaoru Ishikawa
 Total Quality Control
 Management Involvement
 Employee Involvement
 Company Wide Quality Control
 Cause and Effect Diagram
 Quality Circle Concept
TAGUCHI
SHINGO
Genichi Taguchi
Shigeo Shingo
 Loss Function Concept
 Design Experiment
 Poka Yoke
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Benefits of TQM
 Improved Product/Service Quality
 Employee Participation
 Encourages Teamwork
 Good Working Relationships
 Customer Satisfaction
 Employee Satisfaction
 Improved Productivity
 Better/Clearer Communication
 Higher Profitability
 Larger Market Share
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Obstacles of TQM
Lack of Management Commitment:
In order for any organizational effort to succeed, there must be a 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.
Inability to Change Organizational Culture:
Changing organization’s culture is difficult and will require as much as five
years. Management must understand and utilize the basic concepts of
change. They are:
o People change when they want to and to meet their own needs.
o Never expect anyone to engage in behavior that serves the organization’s
values unless adequate reason has been given.
o For change to be accepted, people must be moved from a state of fear to
trust.
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Obstacles of TQM
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.
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 and education are most effective when senior
management conducts the training on the principles of TQM.
Incompatible Organizational Structure and Isolated Individuals and
Departments:
Differences between departments and individuals can create implementation
problems. The use of multifunctional teams will help to break down longstanding barriers.
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Obstacles of TQM
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.
Paying Inadequate Attention to Internal and External Customer:
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.
Inadequate Use of Empowerment and Teamwork:
Teams need to have the proper training and, at least in the beginning, a facilitator,
whenever possible, the team’s recommendation should be followed. Individuals
should be empowered to make decisions that affect the efficiency of their process or
the customer satisfaction.
Failure to Continually Improve:
It is tempting to sit back and rest on laurels. However, a lack of continuous
improvement of the processes, product, and/ or service will even leave the leader of
the pack in the dust.
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