Total Quality Management (TQM) in

volkswagen
Introduction

It seems to be obvious that when we get our hands on a product that we spent money on, we
expect something of it. We expect that the product we bought fulfills a certain need that we have.
But that’s not all there is in a product because if it was we could have chosen one of the approx-
imately thousand alternative products that would have fulfilled the same need just as good. So
maybe there was not even a reason why we choose that one special good, but maybe it was due to
a very simple reason: because of the very good and promising quality of the product.
So if good quality is a characteristic that can make a product stand out of other competitive goods
then how can a company ensure that an extraordinary output quality is achieved? One possible
solution and an often used methodology is to integrate Total Quality Management (TQM) along-
side the supply chain. In the following report I will try to describe, analyze and discuss this ap-
proach and will give my own opinion on why I think TQM is a very important component of
Supply Chain Management.

The TQM approach

TQM describes not only a methodology but also a philosophy that a company follows, in that all
departments, levels and divisions try to value and focus on product (and service) quality. It is seen
as a tool to achieve a main strategic goal namely complete customer satisfaction. The approach
can only work when all employees alongside the whole value adding process are involved by
integrating them into the decision making process. This can be achieved by teaching them a
different way of perceiving their personal workplace in order to have them come up with ideas of
improvement and thus ensure a continuous exchange between employee and management. This
bottom-up communication leads to avoidance and reduction of errors and mistakes which again
results not only in higher product quality but also in higher process quality and with that higher
efficiency. A key and also a requirement for this promising improvement is to implement process
thinking in the mind of every employee, which can only be achieved by regular on- and off-the-
job-trainings. It is furthermore very important to mention that the TQM approach is not a change
of system of the existing manufacturing process or supply chain. It rather is a system that works
hand in hand with existing proceedings and runs alongside all present processes by trying to
continuously improve them.

To implement that system into a company’s manufacturing line might indeed seem possible and
will take a closer look at that idea in the following part of the report. But as we all know good
output quality can only result when there also is good input quality. The question now is, how a
company can integrate such an enormous systematic and strategic approach in let us say a sup-
pliers manufacturing. How can it expand the idea to further parts of the supply chain that on the
first glance seem to be out of its influence.

Out of my own experience from working at the Volkswagen Group Purchasing Department in
Wolfsburg, Germany, I know that there are certain tools and ideas on how to build a relationship
with important suppliers that on the one hand might base on control and leverages but on the other
hand also on trust and long years of business experiences and knowledge exchange.

When a potential supplier makes an offer in order to get mandated by the Volkswagen Group it is
by far not only the price he can offer that matters in the decision making. A whole department
within the quality assurance division gets activated in such a case. To start with the supplier gets
visited by auditors, who examine and undermine literally the whole company. Not only production

wise, but also process wise and regarding their administration. In order to get the go from the
Volkswagen Quality Assurance, the supplier himself needs to implement a functioning and result
promising quality management fulfilling Volkswagen standardized requirements for suppliers.
When the supplier is able to fulfill this handbook (Formula Q) he officially can be taken into con-
sideration to get an order. Even after starting the business the quality auditors regularly visit the
supplier and make sure that he can show evidence of qualitative improvement.

Surely it has to be mentioned that not all companies have the market power to influence their
suppliers in the manner Volkswagen does, but still it shows that a complete TQM approach CAN
be expanded even to a company’s suppliers and thus guaranteeing not only a high manufacturing
quality but also an extraordinary quality of the input components.

TQM in manufacturing

To go even a little deeper into that topic I want to briefly outline how the Volkswagen Group and
more specific the production plant in Wolfsburg, Germany interprets and realizes this approach
in their daily manufacturing business.

The idea I am referring to is known as CIP, “Continuous Improvement Process” and was estab-
lished precisely with the goal to increase efficiency and to identify weaknesses within the produc-
tion process. The general thought hereby was that there actually could be no one that is more
capable of identifying weaknesses and therefore potential than the manufacturer himself. In order
to get reliable results the initiative starts with teaching the staff in the production plants on how to
perceive their workplace and how to spot these potentials. After preparing and sensitizing eyes
and ears of the employees there was a clear structure introduced on how they can inform super-
visors and managers about improvement potentials. And yet these supervisors were trained in
finding and immediately implementing solutions to the problems the manufacturers identified. Cal-
culation models were part of the CIP approach as well and they were supposed to show when a
solution amortizes itself in the long run. As the word continuously suggests the training of manu-
facturers and managers the same are being held over and over again to ensure that employees do
not lose their ability to spot mistakes and avoid errors and critically analyze their place of work.
Conclusion

Summing up this report I wanted to outline the methodology of Total Quality Management in gen-
eral and show that is not only a scientific but also a practically proven approach to increase prod-
uct and process quality. Furthermore I wanted to highlight the value it has to global players suchas
the Volkswagen Group. It does not only play a role in their own worldwide rolled out manufac-
turing, but also right in the beginning of the supply chain by enhancing the quality of input goods
and supplier relationships.I hope that I could make the reader grasp the fact that in a dynamic and
changing world, where customer needs change drastically, even just in this instant, an approach
that secures continuous improvement and adaptation on every business level with the help of
employees and suppliers is of a grave importance and severe relevance to ensure optimal customer
satisfaction