TQM is an improvement to the traditional way of doing business.

It is a proven technique to guarantee survival amidst world-class competition.

Total – made up of the whole
Quality – Degree of excellence of a product or service provided
Management – Act, art, or manner of handling, controlling, directing, etc.

Total Quality Management is defined as both a philosophy, and a set of principles that directs the
foundation of a continuously improving business organization

Six Basic Concepts of TQM

• A committed and involved management

• Unwavering focus to customer (both internal & external)
• Involvement and utilization of the entire workforce
• Continuous improvement of the business and production process
• Treating suppliers as partners

OLD AND NEW CULTURE (DEMING, 1982)

QUALITY ELEMENT OLD CULTURE NEW CULTURE (TQM)

Definition Product-oriented Customer-oriented

First among equals of service

Priorities Second to service and cost
& cost

Decisions Short - term Long-term

Emphasis Detection Prevention

Errors Operations System

Responsibility Quality Control Everyone

Problem Solving Managers Teams

Procurement Price Life-cycle cost

Plan, assign, control, & Delegate, advise, facilitate, &

Manager’s Role
enforce mentor

The Meaning of Quality

What is Quality?

• Getting what you pay for

• Getting more than what you paid for
• A degree or level of excellence – Oxford American Dictionary
• The totality of features and characteristics of a product or service that bears on its
ability to satisfy given needs – The American Society for Quality Control (ASQC)
The DIMENSIONS OF QUALITY - Manufactured Products
(Quality from the Consumer’s Perspective)
1. Performance: The basic operating characteristics of a product.
2. Features: The “extra” items added to the basic features.
3. Reliability: The Probability that a product will operate properly within an expected timeframe.
4. Conformance: The degree to which a product meets preestablished specifications.
5. Durability: How long the product lasts
6. Serviceability: The ease of getting repairs, the speed of repairs.
7. Aesthetics: How a product looks, feels, sounds, smells, or tastes.
8. Safety: Assurance that the customer will not suffer injury or harm from a product.
9. Other perceptions: Subjective perceptions based on brand name, advertising, and the like.

The DIMENSIONS OF QUALITY – Service

(Quality from the Consumer’s Perspective)
1. Time and Timeliness: How long a customer must wait for a service, and if it is completed on time.
2. Completeness: Is everything the customer asked for provided?
3. Courtesy: How customers are treated by employees.
4. Consistency: Is the same level of service provided to each customer each time
5. Accessibility and Convenience: How easy it is to obtain the service.
6. Accuracy: Is the service performed right every time?
7. Responsiveness: How well the company reacts to unusual situations

The DIMENSIONS OF QUALITY

(Quality from the Manufacturer’s Perspective)

Quality of Conformance

 Conformance to specifications
 Cost

PRINCIPLES OF TQM Imai, 1997; Keys, 1991

 Customer focus
 Continuous improvement
 People empowerment
 Process orientation
 Benchmarking
 Leadership by service
 Partnership development
 Human resource excellence
 Glass wall communication
 Rewarding the champions
 Total involvement
 Scientific problem solving
 Chapter 1
TOTAL QUALITY MANAGEMENT
Learning Objectives
1. Evaluate the importance of high-quality product.
2. Examine the total quality management principles

Introduction

Total quality management is based on several ideas. It means thinking about quality in terms
of all functions of the enterprise, a start- to-finish process that integrates interrelated functions at all
levels. It is a systems approach that considers every interaction between the various elements of the
organization. Thus, the overall effectiveness of the system is higher than the sum of the individual
outputs from the subsystems.

Defining Quality

Quality can be a confusing concept, partly because people view quality subjectively and in
relation to differing criteria based on their individual roles in their production marketing value chain. In
addition, the meaning of quality continues to evolve as the quality profession grows and matures.
Neither consultants nor business professionals agree on a universal definition.

ISO 8402-1986 standard defines quality as “the total of features and characteristics of a
product or service that bears its ability to satisfy or implied needs”. If an automobile company
finds a defect in one of their cars and makes a product recall, customer reliability and therefore
production will decrease because trust will be lost in the car’s quality.

When the expression ‘quality’ is used, Quality is generally referred to a parameter which
decides the inferiority or superiority of a product or service. It is a measure of goodness to understand
how a product meets its specifications. Usually, when the expression “quality” is used, we think in the
terms of an excellent product or service that meets or even exceeds our expectations. These
expectations are based on the price and the intended use of the goods or services. In simple words,
when a product or service exceeds our expectations, we consider it to be of good quality. Therefore, it
is somewhat of an intangible expression based upon perception.

Quality can be defined from six different perspectives:

Transcendent, product, value, user, manufacturing, and customer.

1. Transcendent (Judgmental) Perspective. One common nation quality often used by

consumers, is that it is synonymous with superiority or excellence. In 1931, Walter Shewhart,
who was one of the pioneers of quality control, first defined quality as the goodness of a
product. This view is referred to as the transcendent (transcend, “to rise above or extend
notably beyond ordinary limits”), or judgmental definition of quality. In this sense, quality is
“both absolute and universally recognizable, a mark of uncompromising standards and high
achievement.” Common examples of products associated with an image of excellence are
Rolex watches, Ritz Carlton hotel’s, and Lexus automobiles. From this perspective, quality
cannot be defined precisely-you just know it when you see it. It is often loosely related to the
aesthetic characteristics of products that are promoted by marketing and advertising. Product
excellence is also often associated with higher process. However, high quality is not
 necessarily correlated with price. Just consider the Florida man who purchased, albeit quite
some time ago, a $262,000 Lamborghini only to find a leaky roof, a battery that quit without
notice, a sunroof that detached when the car hit a bump, and doors that jammed!
2. Product Perspective. Another definition of quality is that it is related to the quantity of some
product attribute, such as the thread count of a shirt or bed sheet, or the number of different
features in an automobile or a cell phone. This assessment implies that larger numbers of
product attributes are equivalent to higher quality, so designers often try to incorporate more
features into products, whether the customers want them or not. As with the transcendent
notion of quality, the assessment of product attributes may vary considerably among
individuals. Thus, good marketing research is needed to understand what features customers
want in a product.
3. User Perspective. Individuals have different wants and needs and, hence, different
expectations of a product. This leads to a user-based definition of quality-fitness for intended
use, or how well the product performs its intended function. Both a Cadillac CTS and a Honda
Civic are fit for use; they simply serve different needs and different groups of customers. If you
want a highway-touring vehicle with luxury amenities, then a Cadillac may better satisfy your
needs. If you want a vehicle for commuting in a congested urban environment, a Civic might
be preferable.
4. Value Perspective. A fourth approach to defining quality is based on value; that is,
relationship of product benefits to price. Consumers no longer buy solely based on price. They
compare the quality of the total package of goods and services that a business offers
(sometimes called the customer benefit package) with price and with competitive offerings.
The customer benefit package includes the physical product and its quality dimensions;
presale support, such as ease of ordering; rapid, on-time, and accurate delivery; and post-sale
support, such as field service, warranties, and technical support. If competitors offer better
choices for a similar price, consumers will rationally select the package with the highest
perceived quality. If a competitor offers the same quality package of goods and services at a
lower price, customers will generally choose the one having the lower price. From this
perspective, a quality product is one that provides similar benefits as competing products a
lower price, or one that offers greater benefits at a comparable price. A good example is
generic pharmaceuticals, which usually provide the same medical benefits at a lower price.
5. Manufacturing Perspective. Consumers and organizations want consistency in goods and
services. When you frequent a Chipotle restaurant, you expect the same amount of ingredients
and taste in every burrito. For the Coca-Cola Company, quality is “about manufacturing a
product that people can depend on every time they reach for it,” according to Donald R.
Keough, former president and chief operations officer. Through rigorous quality and packaging
standards. Coca-Cola strives to ensure that customers will enjoy the taste of its products
anywhere in the world. Service organizations likewise strive for consistency in performance.

Having standards for goods and services and meeting these standards leads to the fifth definition
of quality; conformance to specifications. Specifications are targets and tolerances determined by
designers of goods and services. Targets (formally called nominal specifications) are the ideal values
for which production is to strive; tolerances are necessary because it is impossible to meet targets all
the time.
 6. Customer Perspective. The American National Standards Institute (ANSI) and the American
Society for Quality (ASQ) standardized official definitions of quality terminology in 1978. They
defined quality as the totality of features and characteristics of a product or service that bears
on its ability to satisfy given needs. This definition draws heavily on the product and user
definitions and is driven by the need to create satisfied customers. By the end of the 1980s,
many organizations had begun using a simpler, yet powerful, customer-based definition of
quality that remains popular today; meeting or exceeding customer expectations.

To understand this definition, one must first understand the meanings of “customer”. Most people
think of a customer as the ultimate purchaser of a product or service for instance, the person who
buys an automobile for personal use or the guest who registers at a hotel is considered an ultimate
purchaser. These customers are more precisely referred to as consumers. Clearly, meeting the
expectations of consumers is the goal of any business. Before a product reaches consumers,
however, it may flow through a chain of many firms or departments, each of which adds some value
to the product. For example, an automobile engine plant may purchase steel from a steel company,
produce engines, and then transport the engines to an assembly plant. The steel company is a
supplier to the engine plant; the engine plant is a supplier to the assembly plant. The engine plant is
thus a customer of the steel company, and the assembly plant is a customer of the engine plant.
These customers are called external customers.

7 Definition of Quality
1. Fit for purpose – a quality process or products is fit for its purpose.
2. Conformance to Requirements – a quality process or product conforms to requirements.
3. Quality is Cost – a quality product costs more to produce.
4. Quality is Price – quality is the price consumers are willing to pay for a product or service.
5. Quality is Standard – quality is compliance to best known standards, processes, and
specifications.
6. Quality is Value for Performance – quality is value for price.
7. Quality is an Experience – quality is satisfying experience.

Dimensions of Quality

1. Performance

Of course, performance refers to a product’s primary operating characteristics. For an automobile,

performance would include traits like acceleration, handling, cruising speed, and comfort; for a
television set, performance means sound and picture clarity, color, and the ability to receive distant
stations. In service businesses—say, fast food and airlines—performance often means prompt
service.
 Because this dimension of quality involves measurable attributes, brands can usually be ranked
objectively on individual aspects of performance. Overall performance rankings, however, are more
difficult to develop, especially when they involve benefits that not every consumer needs.

2. Features

Similar thinking can be applied to features, a second dimension of quality that is often a secondary
aspect of performance. Features are the “bells and whistles” of products and services, those
characteristics that supplement their basic functioning. Examples include free drinks on a plane,
permanent-press cycles on a washing machine, and automatic tuners on a color television set. The
line separating primary performance characteristics from secondary features is often difficult to draw.
What is crucial, again, is that features involve objective and measurable attributes; objective
individual needs, not prejudices, affect their translation into quality differences.

3. Reliability

This dimension reflects the probability of a product malfunctioning or failing within a specified time.
Among the most common measures of reliability are the mean time to first failure, the mean time
between failures, and the failure rate per unit time. Because these measures require a product to be
in use for a specified period, they are more relevant to durable goods than to products and services
that are consumed instantly.

The product’s surviving over a specified period under stated conditions use. A car’s ability to start
on cold days and frequency of failures are reliability factors.

4. Conformance

A related dimension of quality is conformance, or the degree to which a product’s design and
operating characteristics meet established standards. This dimension owes the most to the traditional
approaches to quality pioneered by experts like Juran. A car’s ability fit and finish and freedom from
noises and squeaks can reflect this dimension.

5. Durability

A measure of product life, durability has both economic and technical dimensions. Technically,
durability can be defined as the amount of use one gets from a product before it deteriorates. After so
many hours of use, the filament of a light bulb burns up and the bulb must be replaced. Repair is
impossible.

The amount of use one gets from a product before it physically deteriorates or until replacement is
preferable. For a car it might include corrosion resistance and the long wear of upholstery fabric.

6. Serviceability

A sixth dimension of quality is serviceability, or the speed, courtesy, competence, and ease of
repair. Consumers are concerned not only about a product breaking down but also about the time
before service is restored, the timeliness with which service appointments are kept, the nature of
dealings with service personnel, and the frequency with which service calls or repairs fail to correct
outstanding problems. In those cases where problems are not immediately resolved and complaints
are filed, a company’s complaint-handling procedures are also likely to affect customers’ ultimate
evaluation of product and service quality.

7. Aesthetics

The final two dimensions of quality are the most subjective. Aesthetics—how a product looks,
feels, sounds, tastes, or smells—is clearly a matter of personal judgment and a reflection of individual
preference. Nevertheless, there appear to be some patterns in consumers’ rankings of products
based on taste. A recent study of quality in 33 food categories, for example, found that high quality
was most often associated with “rich and full flavor, tastes natural, tastes fresh, good aroma, and
looks appetizing.”

The aesthetics dimension differs from subjective criteria pertaining to “performance”—the quiet car
engine, say—in that aesthetic choices are not nearly universal. Not all people prefer “rich and full”
flavor or even agree on what it means. Companies therefore must search for a niche. On this
dimension of quality, it is impossible to please everyone.

8. Perceived Quality

Consumers do not always have complete information about a product’s or service’s attributes;
indirect measures may be their only basis for comparing brands. A product’s durability, for example,
can seldom be observed directly; it usually must be inferred from various tangible and intangible
aspects of the product. In such circumstances, images, advertising, and brand names—inferences
about quality rather than the reality itself—can be critical. For this reason, both Honda— which makes
cars in Marysville, Ohio—and Sony—which builds color televisions in San Diego—have been
reluctant to publicize that their products are “made in America.”

Key Principles of Quality Management

Derived from the ISO 9001:2000 standard,

these eight principles are:

1. Customer Focus: Management should understand (and anticipate) the customers’ needs and
requirements, and strive to exceed customer expectations in meeting them;
 2. Leadership: Management should establish unity of purpose and direction, and create and
maintain an environment in which everyone can participate in achieving the organization’s
objectives;
3. Involvement of people: Management should involve all people at all levels so that they
willingly contribute their abilities in achieving the organization’s goals;
4. Process approach: Management should recognize that an objective is achieved more
efficiently when activities and associated resources are managed together as a process;
5. Systems approach: Management should recognize that identifying and understanding
interrelated processes, and managing them as a system, is more efficient and effective in
achieving the organization’s objectives;
6. Continual Improvement: Management should aim at steady, incremental improvement in the
organization’s overall performance as a permanent objective;
7. Factual approach to decision making: Management should base its decisions solely on the
analysis of data and information;
8. Mutually beneficial supplier relationships: Management should enhance the
interdependent relationship with its suppliers for mutual benefit and in creation of value.

Total Quality Management Wheel

No single accepted body of

knowledge exists for total quality
management, as does, for example, the
Project Management Body of Knowledge
(PMBOK) for the Project Management
Institute. Similarly, no prescribed actions
exist for implementing TQM methods and
tools.

Organizations have been free to deploy and adapt TQM as they see fit, giving way too many
definitions of the methodology. Despite these challenges to standardization, it’s possible to describe
generally accepted principles:

 Customer Satisfaction
 Employee Commitment: This creates empowerment through training and suggestion
mechanisms.
 Fact-Based Decision Making: Teams collect data and process statistics to ensure that work
meets specifications.
 Effective Communications: There should be an open dialogue throughout an organization.
 Strategic Thinking: Quality must be part of an organization’s long-term vision.
 Integrated System: A shared vision, including knowledge of and commitment to principles of
quality, keep everyone in a company connected. Taiichi Ohno recognized that even suppliers
are an important part of the system.
 Process-Centered: You can deconstruct every activity into processes, and, therefore, locate
and repeat the best process.
 Continuous Improvement: Every employee should always be thinking about how to better
perform their job.
THE EVOLUTION OF TOTAL QUALITY MANAGEMENT (TQM)
The concept of quality has existed for many years, though it’s meaning has changed and
evolved over time.
• Early 20th century - Quality management meant inspecting products to ensure that they met
specifications.
• 1940’s - During World War II, quality became more statistical in nature. Statistical sampling
techniques were used to evaluate quality, and quality control charts were used to monitor the
production process.
• 1960’s - With the help of so-called “quality gurus,” the concept took on a broader meaning.
Quality began to be viewed as something that encompassed the entire organization, not only
the production process.
• Late 1970’s – 1980’s - Many U.S. industries lost market share to foreign competition. In the
auto industry, manufacturers such as Toyota and Honda became major players. In the
consumer goods market, companies such as Toshiba and Sony led the way. These foreign
competitors were producing lower-priced products with considerably higher quality. To survive,
companies had to make major changes in their quality programs.
• Since then, companies in every line of business are focusing on improving quality in order to
be more competitive.
• The term used for today’s new concept of quality is total quality management or TQM.

QUALITY GURUS

• To fully understand the TQM movement, we need to look at the philosophies of notable
individuals who have shaped the evolution of TQM. Their philosophies and teachings have
contributed to our knowledge and understanding of quality today. Their individual contributions
are summarized Table 1.

Quality Guru Main Contribution

Walter A. Shewhart Contributed to understanding of process variability.

–Developed concept of statistical control charts.

W. Edwards Deming –Stressed management’s responsibility for quality.

–Developed “14 Points” to guide companies in quality
improvement

Joseph M. Juran –Defined quality as “fitness for use.”

–Developed concept of cost of quality.
 Armand V. Feigenbaum
–Introduced concept of total quality control.

Philip B. Crosby –Coined phrase “quality is free.”

–Introduced concept of zero defects.

Kaoru Ishikawa –Developed cause-and-effect diagrams.

–Identified concept of “internal customer.”

Genichi Taguchi –Focused on product design quality.

–Developed Taguchi loss function.

Deming's Management Principles - 14 Points

Deming developed these fourteen points during his time in Japan, modifying and adding to them
while he worked with American firms in the 70s and 80s.

1. Create constancy of purpose for improvement of product and service.

2. Adopt the new philosophy.
3. Cease dependence on mass inspection.
4. End the practice of awarding business on the price tag alone.
5. Improve constantly and forever the system of production and service.
6. Institute training.
7. Institute leadership.
8. Drive out fear.
9. Break down barriers between staff areas.
10. Eliminate slogans, exhortations and targets for the work force.
11. Eliminate numerical quotas.
12. Remove barriers to pride of workmanship.
13. Institute a vigorous program of education and retraining.
14. Take action to accomplish the transformation.

Deming's Management Principles – 7 Deadly Disease

1. Lack of constancy of purpose

2. Emphasis on short-term profits
3. Evaluation of performance, merit rating, or annual review
4. Mobility of management
5. Management by use of visible figures
6. Excessive medical costs
7. Excessive cost of liability

Juran on Quality

Juran lists the following as essential in understanding quality:

1. Know your client.

2. Know the client's stated and unstated needs.

3. Use unbiased measures to track quality.

4. Develop flowcharts which include your suppliers.

5. Analyze your capabilities.

6. Establish quality goals which are specific, measurable, attainable, realistic and time oriented
One of Juran’s significant contributions is his focus on the definition of quality and the cost of
quality. Juran is credited with defining quality as fitness for use rather than simply conformance to
specifications

THREE ELEMENTS OF JURAN’S QUALITY TRILOGY

1. Quality Planning : A process that identifies the customers, their requirements, the product
and service features the customers expect, and the processes that will deliver those products
and services with the correct attributes and then facilitates the transfer of this knowledge to
the producing arm of the organization.

2. Quality Control: A process in which the product is actually examined and evaluated against
the original requirements expressed by the customer. Problems detected are then corrected.

3. Quality Improvement: A process in which the sustaining mechanisms are put in place so that
quality can be achieved on a continuous basis. This includes allocating resources, assigning
people to pursue quality projects, training those involved in pursuing projects, and in general
establishing a permanent structure to pursue quality and maintain the gains secured.

Four Fundamentals belief of Crosby

1. Crosby defines quality a “conformance to requirements, not elegance”.

2. The quality system for suppliers attempting to meet customers’ requirements is to do it right
the first time – prevention, not inspection.
3. The performance standard is zero defects. Crosby has advocated the notion that zero errors
can and should be a target.
4. The measurement of quality is the cost of quality.

Quality Absolutes
Conventional Wisdom Reality
Definition Goodness Conformance to Requirements
System Appraisal Prevention

Standard That’s close enough Zero defects

Measure Indices Price of Non-conformance

Evolution of Marketing Concepts

• The Production Concept. This approach is based on the assumption that the customer is
always interested in low cost and widely available products and services
• The Product Concept. This approach holds that consumers prefers product that are well made
and contain a full array of features and benefits, and services that are performed properly,
and that these consumers will be loyal to these products and services even when new trends
comes.
• The Selling Concept. This concept is based on the assumption that the customer will not buy a
product or service solely on the merits of the offering by the provider and must therefore be
moved to action – a buying decision – by an aggressive selling strategy.
 • The Marketing Approach. This approach is totally different from the others in that it is based on
the belief that the business objectives of the organization can best be achieved through the
complete satisfaction of the end user – the customer.
Evolution of Total Quality Management Concept
• New operational definition of Quality

Quality: A basic business that provides goods and services that completely satisfy both internal
and external customers by meeting their explicit and implicit expectations.

The strategy uses the talents of all employees, to the benefit of the organization in particular and
society in general, and provides a positive financial return to the shareholders.

What is a Total Quality Management System?

Combining the various teaching of the different quality gurus has led to the development of a simple
but effective model for implementing total quality management (TQM).

Quality Principles
• Customer Focus: quality is based on the concept that everyone has a customer and that the
requirements, needs, and expectations of that customer must be met every time if the
organization as a whole is going to meet the needs of the external customer.
• Process Improvement: The concept of continuous improvement is built on the premise that
work is the result of a series of interrelated steps and activities that result in an output.
Continuous attention to each of these steps in the work process is necessary to reduce the
variability of the output and improve the reliability of the process.
• Total Involvement: This approach begins with the active leadership of the senior
management and includes efforts that utilize the talents of all employees in the organization to
gain a competitive advantage in the market place. Employees in all levels are empowered to
improve their outputs by coming together in new and flexible structures to solve problems,
improve processes, and satisfy customers. Suppliers are also included and become partners
by working with empowered employees.