TQM is still important and can make business success a certainty.Inshallah.

Brief introduction to tqm, based on the books.

Total Quality Management

TQM is as much a philosophy than anything else.

There are various levels of how “radical” a TQM philosophy can be, but the essence is that TQM is about reducing costs through increasing quality. Quality gets increased by making less mistakes, producing products with less defects, and so on and so forth. It is often said that “quality is free” – any cost put into improving quality will eventually save money later. The change to promote quality has to come from the top, i.e. the management, and for the management to do anything, they will have to be convinced that whatever they do earns them money. Due to this, an important point of TQM is quantifying the money you save through improving quality. This is done through assigning a cost to bad quality.

The most extreme for of TQM is working towards a philosophy of “There should be no mistakes. Ever. Anywhere. with anything. Did I mention ever?”. (Main proponent of this was a guy names Crosby, who wrote “Quality is free” in 1980). This seems to be the origin of the name, “Total Quality Management”, i.e. “There SHALL be TOTAL quality!” (said in a Gandalf’y voice) However, in general this approach of “no mistakes, ever, at all” is considered unrealistic, but it is worth a mention.

Instead “modern” TQM aims to have as few mistakes as possible, constantly striving to make less mistakes. This is a more complex issue than it seems. There are two very important people behind the basics of TQM. The didn’t agree entirely, but their ideas can mostly be used interchangeably. I will give an overview of their main ideas.

First up, Dr. Joseph M. Juran. He believed management needed a way to quantify quality, so he came up with metrics that quantify them. Quoting from page 12 of “Handbook of Total Quality Management”:

1. Internal Failure Costs – these costs relate to deduction of defects prior to the shipment of the product to the end user. Such may include the cost of rework, scrap, salvage, inspection.
2. External failure costs – These costs are incurred after the product has reached the end user and defects are detected. This may include warranty costs, complaints from customers, loss of goodwill, returned materials, and repairs.
3. Appraisal Costs – this involves the assessment cost for product quality levels. For example, incoming products are inspected for quality, as well as outgoing products. Processes may be periodically inspected and maintained.
4. Prevention costs – this deals with the cost of trying to prevent defects, such as training costs.

Juran also blamed management, and put forth 3 points management needed to make sure they sorted out. Quoting from page 13 of the same book:

1. Quality planning – he stressed the need to recognise and understand the customer group that the firms or business unit caters for. This customer group includes internal and external customers. Internal customers often arise when there is transaction or exchange between interdependent units or departments in the same organisation. Their needs must be recognised in order to improve quality.
2. Break down the needs of the customer. This makes it clear to members of the organisation and easier to develop a product design that will satisfy those needs. In a sense, this is a means of making customer needs operational.
3. Ensure that processes operate correctly and are capable of meeting product design specifications.

The other important guy in TQM is Dr. Deming (worked as a mathematical physicist in for the US department of agriculture in the late 20s). He outlined a lot more of the philosophies behind TQM. The most important thing he did was outline 14 points for management. I will give the short versions of them below, and attempt to scan the full versions and send you a PDF of them (as they nicely summarise many of the ‘softer’ philosophies behind TQM)

• Create consistency of purpose to achieve continuous improvement of products and services and survival of the firm.

In other words “What the hell are we SUPPOSED to be doing? What is expected of us?”

• Adopt the new management philosophy where western management must respond to challenge and lead through change

In other words, “Find problems and fix them”. An important point here is the subtle difference between maximising the wealth of the stockholders (which you shouldn’t necessarily be doing), and maximising the wealth of the stakeholders (which you SHOULD be doing). The stakeholders also includes customers, employees, etc.

• Cease dependence on inspection and build quality into the product

Basically, “stop looking for faults at the very end.” Quality should be maintained in every part of production – if an employee is directly aware of his or her mistakes, rather than a potential mistake being observed only at the very end of production, the employee will be more motivated to make less mistakes.

• Cease the practice of awarding business contracts on the basis of price tag alone

I.e. also consider quality.

• Continuously improve the system of production and service to improve quality and productivity

Always improve anything you can improve

• Institute training on the job
• Overhaul leadership of management and production workers to help people and machines do a better job
• Drive out fear to improve effectiveness

Basically, encourage and train employees to become better, don’t threaten them.

• Break down barriers between departments and encourage teamwork
• Eliminate slogans, exhortations and targets from the workforce

Rather than telling employees how well they should be doing, you should just facilitate so that they can do as well as they can. Ties in with “drive out fear.”

• Eliminate work standards, management by objectives, and numerical goals

Self explanatory, but there is an important subtlety. TQM is, in essence, about quantifying everything. This is to make sure everything can be made better. This quantifying should -not- be used to define goals, but rather to identify where improvements might be made.

• Remove barriers that rob the hourly worker, people in management and engineering their right to pride in workmanship

A complex point, but it boils down to making sure a worker can look at their work and be proud of it.

• Institute educational and self-improvement programs

If workers are motivated to go as well as possible, they will work to become as good as possible.

• Act to accomplish the transformation

Lead by example.

And that’s pretty much the most important parts from the introductions in the books.

To end on a concrete point though, and something that differentiates TQM as a philosophy from something like Six Sigma. Six Sigma by its nature defines an acceptable level of failure. This is fundamentally different from TQM, which stipulates that there is no such thing as an acceptable level of failure. Wherever there is failure, there is the potential to make things better. And making things better will always pay off.