6 Mar 2012
TQM, or Total Quality Management, is a management technique that focuses on continuous process improvement. The idea is that everyone in an organisation has a part to play in improving quality, from executive leadership all the way through to the end user or customer. Everything from product or service design to implementation and customer feedback is utilised in a feedback circle, and then that feedback is integrated into improvements to the product or service. When the new product or service is put into production, the cycle starts again.
TQM and the Six Sigma management strategy are similar, with TQM focusing on the feedback cycle, and Six Sigma focusing on the removal of defects or errors. TQM is often referred to as a Business Excellence Model, and many organisations that utilise TQM will call it by this more modern name. Because TQM has worked so well at such a wide variety of organisations, there are several models in place throughout the world, each with minor modifications to the base concept. However, each has as its focus the utilisation and implementation of information obtained via feedback from a wide variety of sources.
Companies as diverse as Ford Motor Company, Toyota, Motorola, and the Xerox Corporation use this methodology. With its focus on the customer, it can create or deepen customer loyalty to the organisation. Profits can increase because the cost of attracting a new customer is so much higher than the cost of retaining an existing customer. When customers realise that their opinions matter and that the company responds to their feedback, they feel valued and their estimation of the organisation rises. TQM can also help a company produce services and products of a higher quality, with fewer defects or problems that will require the customer to contact the company for resolution.
However, moving to a TQM methodology requires time and training, which represents a cost to the company. In early iterations, TQM training was given throughout the organisation – whether or not the employee had any first-line or even second-line customer contact. Many companies have pulled back from this strategy, extending TQM training only to employees who will have the ability to gather feedback or who have a direct stake in the product or service. This creates a value-added definition of TQM within the company, and utilises the Bell Curve Model, where training is given to employees until the organisation reaches the point of diminishing returns. This has been a highly effective TQM implementation strategy, and is increasingly popular with many companies that are just starting to embrace TQM.
As noted in the journal Business Management Dynamics, teamwork is central to TQM. Without a well-functioning team, or at least one that has received instruction and support for TQM implementation, the results will be varied at best. W Edwards Deming, generally considered to be the father of the quality movement, famously stated: “The result of long-term relationships is better and better quality, and lower and lower costs.” With a well-functioning team concentrating on product or process improvement, customers will remain loyal over the long-term, costs will fall, and profits will rise.