1

Introduction
Definition
Total Quality Management (TQM) is an enhancement to the traditional way of doing business. It is a proven technique to guarantee survival in world-class competition. Only by changing the actions of management will the culture and actions of an entire organization be transformed. TQM is for the most part common sense. Analyzing the three words, we have

Total-Made up of the whole. Quality-Degree of excellence a product or service provides. Management-Act,

art, or manner of handling, controlling, directing, etc.

Therefore, TQM is the art of managing the whole to achieve excellence. The Golden Rule is a simple but effective way to explain it: Do unto others as you would have them do unto you. TQM is defined as both a philosophy and a set of guiding principles that represent the foundation of a continuously improving organization. It 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 integrates fundamental management techniques, existing improvement efforts, and technical tools under a disciplined approach.

1S

Basic Approach
TQM requires six basic concepts: 1. A committed and involved management to provide long-term top-to-bottom organizational support. 2. An unwaveringQ:ocus on the customer, both internally and externally. 3. Effective involvement and utilization of the entire work force. 4. Continuous improvement of the business and production process. 5. Treating suppliers as partners. 6. Establish performance measures for the processes. These concepts outline an excellent way to run an organization. A brief paragraph on each of them is given here. The next six chapters cover these concepts in greater detail. 1. Management must participate in the quality program. J( quality council must be established to develop a clear vision, set long-term &,oals,and direct the program. Quality goals are included in the business plan. An annual quality improvement program is established and involves input from the entire work force. Managers participate on quality improvement teams and also act as coaches to other teams. TQM is a continual activity that must be entrenched in the culture-it is not just a one-shot program. TQM must be communicated to all people. 2. The key to an effective TQM program is its focus on the customer. An excellent place to start is by satisfying internal customers. We must listen to the "voice of the customer" and emphasize design quality and defect prevention. Do it right the first time and every time, for customer satisfaction is the most important consideration. 3. TQM is an organization-wide challenge that is everyone's responsibility. All personnel must be trained in TQM, statistical process control (SPC), and other appropriate quality improvement skills so they can effectively participate on project teams. Including internal customers and, for that matter, internal suppliers on project teams is an excellent approach. Those affected by the plan must be involved in its development and implementation. They understand the process better than anyone else. Changing behavior is the goal. People must come to work not only to do their jobs, but also to think about how to improve their jobs. People must be empowered at the lowest possible level to perform processes in an optimum manner. 4. There must be a continual striving to improve all business and production processes. Quality improvement projects, such as on-time delivery, order entry effilency, billing error rate, customer satisfaction, cycle time, scrap reduction, and supplier management, are good places to begin. Technical techniques such as SPC, benchmark-

ing, quality function deployment, ISO 9000, and designed experiments are excellent for problem solving. 5. On the average 40% of the sales dollar is purchased product or service; therefore, the supplier quality must be outstanding. A partnering relationship rather than an adversarial one must be developed. Both parties ilm"eas much to gain or lose based on the success or failure of the proClUct or service. The focus should be on quality and life-cycle costs rather than price. Suppliers should be few in number so that tnTe partnering can occur. 6. Performance measures such as uptime, percent nonconforming, absenteeism, and customer satisfaction should be determined for eilc)1 functional area. These measures should be posted for everyone to see. Quantitative Mta are necessary to measure the continuous quality improvement activity. The purpose of TQM is to provide a quality product and/or service to customers, which will, in turn, increase productivity and lower cost. With a higher quality product and lower price, competitive position in the marketplace will be enhanced. This series of events will allow the organization to achieve the objectives of profit and growth with greater ease. In addition, the work force will have job security, which will create a satisfying place to work. As previously stated, TQM requires a cultural change. Table 1-1 compares the previous state with the TQM state for typical quality elements. This change is substantial and will not be accomplished in a short period of time. Small organizations will be able to make the transformation much faster than large organizations.

TABLE 1-1

New and Old Cultures

Quality Element and enforce Previous State Price Short-term Detection Second to service and cost Product-oriented Managers Operations Quality control Plan, assign, control,
TQM

ment s r's Role m sibility Solving sis ns

Customer-oriented First among equals of service and cost Long-term Prevention System Everyone Teams Life-cycle costs, partnership Delegate, coach, facilitate, and mentor

zo.

CHAPTER

quality. Thus, it is somewhat of an intangible based on perception. Quality can be quantified as follows: Q=PIE where Q = quality = perfonnance E = expectations
P

If Q is greater than 1.0, then the customer has a good feelli ..; about the product or service. Of course, the determination of P and E will most likely be based on perception with the organization determining perfonnance and the customer detennining expectations. A more definitive definition of quality is given in ISO 9000: 2000. It is defined as the degree to which a set of inherent characteristics fulfills requirements. Degree means that quality can be used with adjectives such as poor, good, and excellent. Inherent is defined as existing in something, especially as a pennanent characteristic. Characteristics can be quantitative or qualitative. Requirement is a need or expectation that is stated; generally implied by the organization, its customers, and other interested parties; or obligatory. Quality has nine different dimensions. Table 1-3 shows these nine dimensions of quality with their meanings and explanations in tenns of a slide projector. These ~mensions are somewhat independent; therefore, a product can be excellent in one dimension and average or poor ill another. Very few, if any, products excel in all nine dimensions. For example, the Japanese were cited for high-quality cars in the 1970s
JA1!.LE1-3

.-Dlmens.ons of Q..amy
Dimension Performa'1ce Features

,
Meaning and Example

Primary, product characteristics, such as the brightness of the picture Secondary characteristics, added features, such as remote control

,~

..

Conformance ReliabilitY DurabilitY ServiCe Response

,~,

..

Meeting spec1fications.or industry standards, workmanship Consistency of performance over time, average time for the uriit to fail Useful life, includes repair Resolution of problems and complaints, ease of repair Human-to-human interface, such as the courtesy of the dealer Sensory characteristics, such as exterior finish "'. Past performance and other intangibles, such as being ranked first
A. Garvin, Managing Quality: The Strategic and Competitive Edge (New York: Free

.'~.Aesthetics "<t? ~[!l;U_fT"

tlRrffbrfFDavid

~ yr:\1'\~~: p 1~1~}~ep~t;~ion 1-f~.~j.~;,

22 .

=----

CHAPTER

In the late 1980s the l1utDmDtiveindustry began tD emphasize statistical process CDntrDI(SPC). Suppliers ~.ndtheir suppliers were required tD use these techniques. Other industries and the Department .of Defense alSDimplemented SPC. The MalcDlm Baldrige NatiDnal Quality Award was established and became the means tD measure TQM. Genechi Taguchi introduced his concepts .of parameter and tDlerance design and brDught abDut a resurgence .of design .of experiments (DOE) as a valuable quality improvement
tDDI.

Emphasis on quality cDntinued in the autD industry in the 1990s when the Saturn . tDmobile ranked fIrst in customer satisfactiDn (1996). In additiDn, ISO 9000 became wDridwide model fDr a quality management system .. ISO 14000 was approved as worldwid~ mudel fDr envirDnmental management systems. The new millenium brought about increased emphasis .onwDridwide quality and Internet.

authe the the

---

ObStacles
Implementation of TQM is described in the next chapter, .on leadership. This sectiDn gives infonnation cDncerning the Db~acles associated with implementatiDn. Many DrganizatiDns, especially small .ones with a niche, are cDmfDrtable with their current state. They are satisfIed with the amDunt .of wDrkbeing perfonned, the prDfIts realized, and the perceptiDn that the custDmers are satisfIed. Organizations with this culture will see little need fDrTQM until they begin tD lDse market share. Once an organizatiDn embarks .onTQM, there will be .obstacles to its successful implementation. The fIrst eight most CDmmonwere determined by RDbert J. Masters aftec an extensive literature search and the last obstacle added by the authDrs.2 They are given " below.

Lack

of. Management

Commitment

f.
.<

In .order for any organizatiDnal effDrt tD succeed, there must be a substantial management cominitment of mapagement time and grgll1l@!ijonal resources. The purpose must be clearly and cDnt:iKtiDus1y communicate(l1~alt]Jers6ftBel. M8Bag.ement must consistently apply the principles DfTQM. Robert Galvin of MotDrola said that only the CEO can. ensure, even in times of g(~l,l( pressure, that quality and custDmer satisfaction are preserved. In a survey of 188 quality professiDnals, 66% repDrte(J that management's compensation is not linked to quality gDa13such as failure CDStS, customer complaints, and cycle time reduction.~
2 ,():J

Robert J. M~sters, "Overcoming

the Barriers,to TQM's Success," .Quality Progress (May 1996): 53-55. 'The Barriers to Total Quality Management," Quality Progress (June

.j Nabil

Tarnimi ~d Rose Sebastianelli, c(998): 57-60.

INTRODUCTION

.ZI
::.

Inability to Change Organizational

Culture

Changing an organization's culture is difficult and will require as much as five years. Individuals resist change-they become accustemed to doing a particular process and it oecomes the preferred way. Management'must understand and utilize the basic concepts of change. They are: ~~ 1 I. ,People change when they want to and to meettheir own needs./' 2. Never expect anyone to engage in behavior that serves the organization's values,.;""" unless adequate reason (why) has been given. 3. For change to be accepted, people must be moved from a state of fear to trust. ...c:::: It is difficult for individuals to change their way of doing things; it is much more difficult for an organization to make a~tIltural ch~e. Management by exhortation and inspiration wilrfail. Speches, slogans, and campaigns that are supposed to moti \fate people are only effective for a short period of time. Impediments to a cultural change are the lack of effective communication and emphasis on short-term results. Organizations that spend more time planning for the cultural aspects of implementing a TQM program will improve their chances of success.4 Improper Planning ~f the organization must be involved in the development of the implementation plan and any modifications that occur as' the plan evolves. Of particular importance isihe two-way comniunication of ideas l>yall personnel during th~ development of the plan and its implementation. Customer satisfaction should be the goal rather than' financial, or sales goals. Peterson Products, a' metal stamping firm near Chicago, improved on-time delivery, which resulted in a 25% increase in sales. Focus on quality and the other goals will follow. Lack of Continuous Training and Education Training and education is an ongoing process for everyone in the organization. Needs must 1>e determined and a plan developed to achieve those needs. Training and education are most effective when senior management con<;luctsthe. training on the principles ofTQM. Informal training occurs by communicating the TQM effort to all personnel on a continual basis. In the study by Tamimi and Sebastianelli previously cited, lack of training in group discussion and communication techniques, quality improvement skills, problem identification, and the problem-solving method was the second most important obstacle.

Gar; Salegna and Farzaneh Rasel, "Obstacles 53-57.

to Implementing Quality,"

Quality Progress (July 2000):

24

CHAPTER

Incompatible Organizational Structure and Isolated Individuals and Departments Differenc.es between departments and individuals can create implementation problems. The use of multifunctional teams will help to break down long-standing barriers. /Restrn9.rnring to make the organization more responsive to customer needs may ~eeded. Individuals who do not embrace the new philosophy can be required to leave the orga~zation. Adherence to the six basic concepts will minimize the problems over time. At Spartan Light Metal Products, Inc. in Sparta, IL, product support teams COl!lposed of three members from design, quality, and production are assigned to each customer segment. Ineffective Measurement Techniques and Lack of Access to Data and Results /Key characteristics of the organization should be measured so that effective decisions In order to improve a process you need to measure the effector improvement ideas. Acce!\Sto data and quick retrieval is necessary for effective processes. Peoples Bank of Bridgeport, CT found that extra inspection, training, and management encouragement did not help a high error rate. Finally the bank investigated the root causes of the problem and corrected them, which virtually elirninatedthe problem. Paying Inadequate Attention to Internal and External Customers Organizations need to understand the changing needs and expectations of their customers. Effective feedback mecha..isms that provide data for decisionmakiQg are necessary for this understanding. One way to overcome this obstacle is to give the right people direct access to the customers. Ingersol Rand of Princeton, NJ had its design team of marketing, engineering, aDdmanufacturing conduct focus' groups of customers throughout the country with the result that it was able. to develop a new grinder in onetlifrd -the-usual.-cy~l~ time. 5 Wh~n an "organiiation fails to empower individuals and teams, it cannot hold them responsible for producing results.

"C~;

Ina~e~uateUse

of Empowerment . fnd .Teamwork

Teams need to have the proper traininp and, at least in the beginning, a facilitator. Whenev{f;.pos.sible, the team's recommendations shquld be followed. Individuals should be -.~~IIlpOwered to make decisions that affect the efficiency of their process or the satisfac'o;bf,theit customers. Solar Turbines, Inc. flattened its organization by restructuring
ardJ .Zl!l!gwill. 'Ten Misllifes CEGl's Make about Quality;" Quality Progress (June 1994): 43-48.
J

"";.::'4\\o!~~

INTRODUCTION

25

into work teams and delegating authority to the point of customer contact or to the work performed. Failure to Continually Improve It is tempting to sit back and rest on your laurels. However, a lack of continuous im-. provement of the processes, product, and/or service will even leave the leader of the pack in the dust Will Rogers said itbest, "Even if you're on the right track, you'll get run over if you just sit there." Even though Qlampion Mortgage's 1998 business volume increased 59%, it continues to address culture>, .:>taff, and service issues.6

Benefits of TQM
According to a survey of manufacturing firms in Georgia, the benefits ofTQM are improvl:d quality, employee participation, teamwork, working relationships, customer satisfaction. employee satisfaction, productivity, communication, profitability, and market share.? TQM is a good investment as shown by a ten-year study by Hendricks andSinghai. They showed that there is a strong link between TQM and [mandal performance. Th(:researchers selected a group of 600 publicly traded organizations that had won awards for effectively implementing TQM. They then selc;x:~ed a control group similar in size and .industry to the award winners. Performance of both groups was compared during the five years prior to the award and five years after winning the award. No difference was shown between the two groups prior to the award. However, as shown below the award group far outstripped the control group during the five-year period after the award. Description Growdt in Operating Income Increase in Sales Increase in Total Assets . Control
43% 32%

Award
91% 69%

37%

79%

The study also showed that stock price performance for the award winners was 114% while the S&P was 80%. In addition, the study showed that small organizations out performed larger organizations. Recent studies have shown that only about 30% of manufacturing o~anizations have successfully implemented '1'QM.8

6
7

Mark R. Hagan, "Complacency-the

Enemy of Quality," Quality Progress (October

1999): 37-44.

Christopher M. Lowery, et aI., "TQM's Human Resource Component,"

QUality Progress (February 2(00): (April 1999): 35-42.

55-58.
8

Kevin B. Hendricks and Vinod R. Singhai, "Don't Count TQMOut,"

Quality Progress

26

CHAPTER

TQM Exemplary Organization9

Employing 99,000 workers at 53 major facilities worldwide and baSed in Schaumburg, illinois, Motorola is an integrated company that produces an array of electronic products, distributing most through direct sales and service operations. Products include two.way radios and pagers; wireless telephones; semiconductors; and equipment for defense and aerospace applications, data communications, information processing, and automotive and industrial uses: In 1981, Motorola launched an ambitious drive for a tenfold improvement in the quality of its products and services. They succeeded, and now many of its products are the best in their class. The company's quality goal is simply stated: "Zero defects in everything we do." Motorola's managers literally carry with them the corporate objective of "total customer satisfaction"-it's on a printed card in their pockets. Corporate officials and business managers wear pagers to make themselves available to customers, and they regularly visit customers' businesses to find out their likes and dislikes about Motorola products and services. The information, along with data gathered through an extensive network of customer surveys, complaint hotlines, field audits, and other customer feedbllck measures, guides planning for quality improvement and product development. Pagers supplied to Nippon Telegraph and Telephone is a major share of that market. Key initiatives are six-sigma quality and reducing total cycle time. Six sigma is a statistical measure that translates into a target of no more than 3.4 defects per million products and includes customer service. Motorola's cycle-time reduction is even more ambitious; the clock starts ticking the moment the product is conceived. This calls for an examination of the total system, ~~!9~tn.E.i1esign, manufacturing, marketing, and administration. EI<lployees contribute directly through Motorola's Participative Management Prograin (PMP), which is composed of employees who work in the same area or are . assigned to achieve a specific aim. PMP teams meet often to assess progress toward meeting quality goals, identify-new initiatives, and work on problems. To reward high quality work, savings that stem from team recommendations are shared. PMP bonuses over the past four years have averaged about three percent of Motorola's payroll. About 40 percent of worker training is devoted to quality matters, ranging from general. principles of quality improvement to designing for manufacturability.

9 Malcolm Baldrige National Qnality Award, 1988 Manufacturing,!:::ategory page: Internet.

Recipient. NlSTlBaldrige

Home-

INTRODUCTION

'.

Z7

1. Describe how the golden rule does or does not influence each of the six concepts ofTQM. 2. Of the six basic TQM concepts, which were the most effective in World War II? . Explain. 3. Which of the gurus would be the father of quality control? Which had the greatest impact on management? Which is noted fot robust design? 4. Select a product or service and describe how the dimensions of quality influence its acceptance. 5. Working as an individual or in a team of three or more people, determine two or more obstacles to implementing TQM in one or more of the organizations listed below: (a) (b) (c) (d) (e) (f) (g) (h) Large bank Health-care facility University academic department University nonacademic department Large department store Grade school Manufacturing facility Large grocery store