Total Quality Management (TQM)

• TQM is defined quantitatively as Q = P / E, where Q represents quality, P represents performance, and E represents expectations.
• A customer feels positively about a product or service's quality if Q is greater than 1.

The Eight Dimensions of Product Quality

• Performance: Refers to a product's primary operating characteristics; an example is a smartphone's processing speed or battery life.
• Features: Additional aspects that improve the product's appeal beyond its basic function, like a built-in GPS or Bluetooth connectivity in a car.
• Reliability: Probability of a product performing without failure over a specified time; a refrigerator operating effectively for years is an example.
• Conformance: The extent to which a product adheres to established standards and specifications, like pharmaceuticals conforming to FDA standards.
• Durability: Measures how long a product lasts before it breaks down or becomes obsolete; an example is high-quality shoes that last many years.
• Serviceability: The speed, courtesy, and competence of repair services, such as an auto manufacturer offering 24/7 customer service.
• Aesthetics: How a product looks, feels, sounds, tastes, or smells; subjective, like the design and scent of a perfume.
• Perceived Quality: Customer's perception of the product's overall quality, influenced by branding and reputation; a luxury handbag's perceived high quality due to brand name and marketing.

The Five Dimensions of Service Quality

• Tangibles: Physical evidence of the service, such as the appearance and facilities, such as a clean and well-furnished hotel room.
• Reliability: The ability to perform the promised service dependably and accurately; e.g., a courier delivering packages on time.
• Responsiveness: Willingness to help customers and provide prompt service, for example, a restaurant server refilling drinks promptly.
• Assurance: Knowledge and courtesy of employees that inspire trust and confidence, for example, a financial advisor providing clear advice.
• Empathy: Individualized attention and care provided to customers, like a doctor taking time to listen to a patient's concerns.

Total Quality Management (TQM)

• TQM integrates all functions and processes to continuously improve the quality of goods and services, with the goal of customer satisfaction.
• TQM involves everyone in an organization being committed to continual improvement through customer satisfaction.
• TQM includes detecting and eliminating manufacturing errors, streamlining supply chains, improving customer experience, and ensuring fully trained employees.
• Total Quality Management (TQM) is a customer-oriented management philosophy and strategy focused on achieving customer satisfaction, where all members consistently work towards this goal through systematic improvement efforts.
• TQM evolved in Japan after WWII and Edward Deming, an American quality expert, assisted the Japanese in using TQM concepts.
• The American industry initially ignored TQM due to lack of competition but was later forced to adapt due to deregulation, trade deficits, and consumer awareness.
• Ford Motor Company lost more than US $3 billion during 1980-82.
• Xerox regained market share by applying Deming's teachings, while Florida Light and Power reduced customer complaints by 60% in 1983, and the American Navy coined the term TQM in 1985.

The Three Quality Gurus

• Edward Deming: Credited with popularizing quality control in Japan, seen as a national hero and the father of the Deming Prize for Quality.
• Juran: Invited to Japan in 1954 by the union of Japanese Scientists and engineers. Juran defines quality as fitness for use through design, conformance, availability, safety and field use, emphasizing top-down management and technical methods.
• Philip Crosby: Author of Quality is Free, who defines quality as conformance to requirements, not "goodness," and promotes prevention over appraisal. His performance standard is zero defects.

The Juran Quality Trilogy

• Juran developed an approach for cross-functional management that includes quality planning, quality control, and quality improvement.
• Quality Planning: Process of creating awareness, setting goals, and planning ways to improve, requiring trained staff and management commitment.
• Quality Control: Involves developing methods to test product quality and making changes to address deviations from standards.
• Quality Improvement: Continuous drive to improve, diagnosing problems and analyzing processes for recognition.

The Deming Cycle

• The Deming Cycle, or Shewhart Cycle, links manufacturing with consumer needs by focusing departmental resources.
• Plan involves designing a consumer research methodology.
• Do involves implementing the plan to measure business performance.
• Check involves checking the measurements and reporting the findings to decision-makers.
• Act/Adjust involves drawing conclusions and implementing changes.

Benefits of Total Quality Management (TQM)

• Enhances customer satisfaction and loyalty.
• Improves operational efficiency and reduces costs.
• Fosters employee engagement and teamwork.
• Provides a competitive advantage through superior quality.

Enhancing Customer Satisfaction and Loyalty

• Understanding customer needs through a customer-centric approach.
• Encouraging organizations to meet customer expectations.
• Consistently delivering high-quality products and services through quality control processes.

Improving Operational Efficiency and Reducing Costs

• Streamlining processes by eliminating waste (lean practices), which leads to efficient operations and reduced consumption of time and resources.
• Minimizing errors and defects by focusing on quality at every production stage, which reduces costs associated with rework, returns, and warranty claims.
• Better resource management by optimizing resource use which enhances profitability.

Fostering Employee Engagement and Teamwork

• Involving employees at all levels in decision-making related to quality improvements; giving employees the power to contribute ideas and solutions to increase engagement.
• Encouraging teamwork across departments to enhance communication and problem-solving capabilities, leading to innovative solutions and improved morale.
• Investing in training and development to not only enhances individual skills but also fosters a culture of continuous learning.

Providing a Competitive Advantage Through Superior Quality

• Differentiation through quality in a competitive marketplace; prioritizing quality helps organizations distinguish themselves from competitors.
• Building a strong brand reputation: A positive brand reputation for quality can lead to increased market share and customer loyalty.

Adaptability

• Practicing TQM makes organizations more agile in responding to market changes.
• Focusing on continuous improvement allows organizations to innovate and adapt quickly maintaining their competitive edge.

Obstacles to TQM Implementation

• Lack of management commitment.
• Inability to change organizational culture.
• Improper planning.
• Lack of continuous training and education.
• Isolated individuals and departments.
• Ineffective measurement techniques.

Cost of Quality

• Quality cost equals the cost of conformance plus the cost of non-conformance.
• Cost of conformance is what is spent to provide products or services as per required standards (Prevention & Appraisal costs).
• Cost of non-conformance is the failure cost with not operating to the needs, amount spent (Internal & External failure costs).

Visible Costs

• Scrap, rework, and warranty costs

Hidden Costs

• Conversion efficiency of materials
• Inadequate resource utilization
• Excessive use of material
• Cost of redesign and re-inspection
• Cost of resolving customer problems
• Lost customers / Goodwill
• High inventory

Prevention Costs

• Associated with activities like design, implementation, and maintenance to prevent defects from occurring.
• Activities lead to reduction of appraisal costs and failures (internal and external).
• Activities: market research, quality training, contract review, design review, field trials, supplier evaluation, process plan review, and preventive maintenance.

Appraisal Costs

• Costs are for detecting defects to assure conformance to quality standards.
• Activities focus on discovering defects rather than preventing them.
• Activities include prototype testing, vendor surveillance, incoming material inspection, process inspection, final inspection, and lab testing.

Internal Failure Costs

• Occur when work results fail to reach designated quality standards and are detected before transfer to the customer.
• Activities involve design changes, scrap due to design changes, excess inventory, rework, downgrading, downtime, and troubleshooting.

External Failure Costs

• Occur when a product or service fails to reach designated quality standards and is not detected until after transfer to the customer.
• Activities include processing customer complaints, repair/replacement of goods, warranty claims, and loss of customer goodwill.

Leadership of TQM

• According to Crosby, senior management is 100% responsible for the state of its existence.
• Harrington says that between 70% and 85% of all errors can only be corrected by management.
• It is important that top management understands TQM and guides the organization through the TQM process.

Deming's 14 Points for Top Management

• Create constancy of purpose for product and service improvement by investing in research, development, and employee training.
• Adapt the new philosophy by eliminating wastes, delays, and radically changing the work culture, aiming for just-in-time manufacturing and zero defects.
• Cease dependence on mass inspection by doing things right the first time, aiming to eliminate inspection and focus on prevention.
• Management needs: training to learn about the organization, all the way from incoming material to the customer.
• Adopt and institute leadership: Senior employees must act as leaders rather than managers.

Institute Training

• Management needs training to learn about the organization.
• Everyone receives 6 weeks of training every year for Deming's teachings and adaptations of his concept.
• Breaking down barriers between departments promotes collaboration, enhances communication, and improves problem-solving.
• Here, Deming talks about slogans and targets for increasing productivity by improving the system for management.
• Remove numeric goals for the workforce.
• Remove barriers to pride of workmanship by establishing the right processes and systems.
• Encourage and improve education.
• Apply transformation by understanding the 13 points.
• There should be appropriate and proper process of production.