Total Quality Management (TQM) Framework In A Nutshell

The Total Quality Management (TQM) framework is a technique based on the premise that employees continuously work on their ability to provide value to customers. Importantly, the word “total” means that all employees are involved in the process – regardless of whether they work in development, production, or fulfillment.

Component	Description
Origin	Total Quality Management emerged in the mid-20th century and was popularized by thought leaders such as W. Edwards Deming and Joseph Juran.
Overview	Total Quality Management is a comprehensive approach to improving the quality of products, services, and processes within an organization. It emphasizes a customer-centric focus, continuous improvement, and employee involvement to achieve excellence in all aspects of operations.
Key Elements	– Customer Focus: TQM places a strong emphasis on understanding and meeting customer needs and expectations. Customer satisfaction is a central goal.
	– Continuous Improvement: Organizations practicing TQM are committed to ongoing enhancement of processes and products through incremental changes.
	– Employee Involvement: TQM encourages active participation and empowerment of employees at all levels to contribute to quality improvement.
	– Process Orientation: TQM promotes a process-centric approach, with a focus on identifying, analyzing, and improving key processes.
	– Data-Driven Decision Making: Data and metrics play a crucial role in TQM, guiding decision-making and performance measurement.
	– Supplier Relationships: Collaboration with suppliers is essential to ensure the quality of incoming materials and components.
How It Works	TQM involves the following principles and practices:
	1. Leadership Commitment: Top management demonstrates a strong commitment to quality and sets the tone for the organization.
	2. Employee Training: Continuous training and skill development ensure that employees can contribute effectively to quality improvement.
	3. Process Improvement: Identify processes, analyze them for inefficiencies, and implement changes to enhance quality and efficiency.
	4. Customer Feedback: Regularly gather and analyze customer feedback to make improvements based on their needs and preferences.
	5. Supplier Collaboration: Collaborate closely with suppliers to ensure the quality of materials and components.
	6. Data Collection: Collect and analyze data to identify trends, monitor performance, and make informed decisions.
Applications	– Manufacturing: TQM has been widely applied in manufacturing industries to enhance product quality and reduce defects.
	– Service Industries: It is also used in service sectors like healthcare, hospitality, and finance to improve customer experiences.
	– Public Sector: Government agencies adopt TQM principles to enhance efficiency and service delivery.
Benefits	– Improved Quality: TQM leads to higher-quality products and services, reducing defects and errors.
	– Customer Satisfaction: Enhanced customer focus results in improved customer satisfaction and loyalty.
	– Efficiency: Streamlined processes and reduced waste lead to greater operational efficiency.
	– Competitive Advantage: TQM can provide a competitive edge by delivering superior quality.
Drawbacks	– Resource-Intensive: Implementing TQM requires significant time, effort, and resources.
	– Resistance to Change: Employees may resist changes associated with TQM initiatives.
	– Complexity: TQM can be complex to implement and sustain in large organizations.
Key Takeaway	Total Quality Management is a holistic approach to achieving excellence in quality, focusing on customer satisfaction, continuous improvement, and employee involvement. It is applied in various industries to enhance quality, efficiency, and competitiveness. While it offers numerous benefits, it demands commitment and resources for successful implementation. TQM is a dynamic process that adapts to changing customer needs and market conditions.

Table of Contents

Understanding the TQM framework

The TQM framework was developed by management consultant William Deming who introduced it to the Japanese manufacturing industry.

Today, Toyota is perhaps the best example of the TQM framework in action. The carmaker has a “customer first” focus and a commitment to continuous improvement through “total participation”.

The focus of the TQM framework is the continual improvement of all processes with an organization, irrespective of whether they have a direct impact on customer satisfaction.

Improvement comes from identifying and then removing or reducing errors that commonly occur in supply chain management, manufacturing, employee training, and customer experience.

The process of problem-solving and adding value to the customer experience is one where every individual takes an active role.

8 principles of Total Quality Management

While there is no universal approach to implementing a TQM framework, many businesses use the following eight principles. These are evergreen principles that can be applied to any industry and are incorporated in more modern management techniques.

1. Customer-focused

The TQM framework acknowledges that the customer is the final determiner of whether company processes are sufficiently high quality.

If the customer is not satisfied, then the company must refocus its efforts on understanding consumer needs and expectations on a deeper level.

2. Employee engagement

Engaged employees are empowered employees who are not fearful of losing their jobs. As a result, they have the confidence and experience to suggest and implement continuous improvement across many systems.

3. Process approach

Refining process is a fundamental component of the TQM framework. Here, refinement means processes are followed in a logical order to ensure consistency and increased productivity.

Flowcharts and visual action plans can be produced so that employees understand their responsibilities.

4. System integration

System integration means that every single employee in a company has a reasonable understanding of policies, standards, and objectives.

It is vital employees understand their roles and how they contribute to the greater success of the company – no matter how insignificant those contributions may seem.

5. Strategic and systematic approach

A business must develop strategies that are quality-centric.

Company mission statements and their associated goals and values should also reflect the quality-first approach to customer satisfaction.

6. Continual improvement

Continual improvement is important in developing a competitive advantage and also in meeting stakeholder expectations.

Toyota’s model for continual improvement places a high emphasis on employee participation, eliminating waste, and reducing bureaucracy.

These factors increase innovation and reduce costs, which ultimately flow to the consumer.

7. Decision-making based on facts

Informed decisions are derived from a deep understanding of a business’s market and its target audience.

Wherever possible, data should be collected to support employee experience and intuition concerning creating value for consumers.

8. Communication

Communication is an often overlooked yet vitally important part of any successful company.

It plays a key role in clarifying expectations while also increasing employee morale and motivation.

Communication also increases collaboration and innovation between previously separate departments in a single company.

How is TQM implemented?

TQM is implemented by following the PDCA cycle, a model that originated in the 1920s that is a core component of many modern quality frameworks.

Although the model was created by engineer and statistician Walter Shewhart, Deming was the one who was responsible for its wide distribution and so it is often called the Deming cycle.

With that said, below is a look at each of the four stages that comprise this cycle:

Plan (P)

The most important stage where affected stakeholders come together to determine the root cause of a problem via detailed research or analysis such as the Fishbone diagram, 5 Whys, or Failure Mode and Effects Analysis (FMEA).

Do (D)

In the second stage, the stakeholders develop solutions to the problems identified in the planning stage.

Unlike Six Sigma, the PDCA cycle focuses more on whether employees deem a solution to be effective and less on measuring concrete gains.

Check (C)

Where a before-and-after check is performed to determine the effectiveness of the solution.

Any data can be compared to expected outcomes to ensure objectives are being met. Successful solutions should then be incorporated into broader processes and procedures to avoid problem recurrence.

Act (A)

In the context of the TQM framework, the fourth and final stage encourages decision-makers to present the results of the test to relevant stakeholders to tell them what has occurred and to chart a way forward.

TQM and the costs of quality

A fundamental component of the Total Quality Management framework is that the cost of doing something the right way is far less than doing it the wrong way and having to fix the mistake.

Nevertheless, some critics of the framework consider that the process of maintaining quality has an associated cost that cannot be recouped by the business.

To counter this view, Deming along with colleagues Joseph M. Juran and Armand V. Feigenbaum reframed the cost of quality as the cost of not producing a quality deliverable. These costs, they posited, were applicable across four categories:

Prevention costs – or costs related to the creation of work areas that are safe and efficient. Prevention costs also encompass planning, training, and the conducting of regular reviews. The researchers noted that activities related to prevention were often allocated a minuscule amount of the company’s budget.
External failure costs – these are costs incurred once a product has been released in the market, such as returns, repairs, recalls, or warranty claims.
Internal failure costs – or the cost of any failure before the product has been released. Typical internal failures include faulty machinery, improper or poor quality raw materials, product design that requires multiple revisions, and scrapped product runs.
Appraisal costs – these cover the cost of inspection and testing during the product development lifecycle, such as the evaluation of supplier materials.

Total Quality Management vs. Six Sigma

Similar to total quality management, Six Sigma also seeks to reduce errors.

The specificity of Six Sigma is that if limits govern a process error that separates good and bad process outcomes, the Six Sigma approach has a process mean (average) that is six standard deviations from each limit.

This, Motorola found, provided enough buffer for natural variation in process outcomes to fall within the lower and upper limits.

Six Sigma usually goes through the following process:

And with the help of the following implementation roles:

Drawbacks of Using Total Quality Management (TQM):

While TQM is a powerful approach to quality improvement, it has some limitations and potential drawbacks:

1. Time-Consuming:

Implementing TQM requires a significant time investment to develop, implement, and sustain quality improvement initiatives.

2. Cultural Resistance:

Organizational culture may resist changes associated with TQM, leading to resistance from employees and management.

3. Resource-Intensive:

TQM often requires additional resources, including training, technology, and quality control processes, which can strain budgets and operational efficiency.

4. Complex Implementation:

TQM implementation can be complex, especially in larger organizations with multiple departments, making it challenging to coordinate efforts effectively.

5. Potential for Overemphasis on Metrics:

Overemphasis on metrics and data collection in TQM may lead to a focus on quantity over quality in some cases.

When to Use Total Quality Management (TQM):

TQM is valuable in various scenarios within an organization:

1. Quality Improvement:

Use TQM when aiming to improve product or service quality, reduce defects, and enhance customer satisfaction.

2. Process Optimization:

Implement TQM to optimize internal processes, increase efficiency, and reduce waste.

3. Cultural Transformation:

TQM is beneficial when an organization seeks to foster a culture of continuous improvement and quality excellence.

4. Customer-Centric Approach:

TQM helps organizations prioritize a customer-centric approach by meeting or exceeding customer expectations.

How to Use Total Quality Management (TQM):

Implementing TQM effectively involves several key steps:

1. Leadership Commitment:

Top management must commit to TQM principles and lead by example to drive cultural change.

2. Employee Involvement:

Involve all employees in quality improvement efforts, encouraging them to identify and address issues.

3. Customer Focus:

Understand customer needs and expectations, and use them as a basis for quality improvement initiatives.

4. Data-Driven Decisions:

Collect and analyze data to identify areas for improvement and make informed decisions.

5. Continuous Improvement:

Promote a culture of continuous improvement, where employees actively seek ways to enhance processes and products.

6. Training and Education:

Provide training and education to employees to ensure they have the necessary skills and knowledge for quality improvement initiatives.

7. Quality Tools and Techniques:

Utilize quality management tools and techniques such as Six Sigma, Lean, and the PDCA (Plan-Do-Check-Act) cycle.

8. Standardization:

Standardize processes and procedures to reduce variability and improve consistency.

9. Communication:

Maintain open and effective communication channels throughout the organization to share information and progress on quality initiatives.

What to Expect from Implementing Total Quality Management (TQM):

Implementing TQM can lead to several outcomes and benefits:

1. Improved Quality:

TQM initiatives lead to improved product or service quality, reduced defects, and higher customer satisfaction.

2. Increased Efficiency:

Optimized processes and reduced waste result in increased operational efficiency and cost savings.

3. Cultural Transformation:

TQM fosters a culture of continuous improvement, empowering employees to take ownership of quality.

4. Enhanced Customer Loyalty:

Meeting or exceeding customer expectations through TQM efforts builds customer loyalty and brand reputation.

5. Competitive Advantage:

TQM can provide a significant competitive advantage by delivering high-quality products and services.

6. Data-Driven Decision-Making:

TQM encourages data-driven decision-making, leading to better-informed and more effective strategies.

In conclusion, Total Quality Management (TQM) is a powerful approach to quality improvement and organizational excellence.

While it has its drawbacks and challenges, understanding when to use it and how to apply it effectively can lead to improved quality, customer satisfaction, and operational efficiency.

By following the steps outlined in the framework and recognizing its potential benefits and drawbacks, organizations can leverage TQM to achieve continuous improvement and maintain a competitive edge in their industries.

Case Studies

Automotive Industry:

Toyota’s Lean Manufacturing: Toyota’s successful implementation of TQM principles through Lean Manufacturing has not only improved product quality but also reduced waste and increased production efficiency.
Ford’s Six Sigma Initiatives: Ford extensively utilizes Six Sigma methodologies to enhance product quality, eliminate defects, and optimize manufacturing processes.
Honda’s Quality Circles: Honda’s commitment to quality circles allows employees to actively participate in identifying and resolving quality-related issues, contributing to continuous improvement.

Hospitality Industry:

Marriott International’s Customer-Centric Approach: Marriott’s TQM approach revolves around ensuring exceptional customer experiences, personalized services, and high levels of customer satisfaction.
Ritz-Carlton’s Service Excellence: Ritz-Carlton has set industry standards for service quality by emphasizing attention to detail, employee training, and service consistency.

Aerospace Industry:

Boeing’s Quality Control: Boeing’s aerospace products adhere to rigorous quality control standards to ensure safety, reliability, and compliance with industry regulations.

E-commerce Industry:

Amazon’s Customer Service Excellence: Amazon’s relentless focus on customer service quality and satisfaction has made it a leader in the e-commerce industry.

Healthcare Industry:

Mayo Clinic’s Patient-Centric Care: Mayo Clinic’s TQM approach prioritizes patient safety, medical excellence, and continuous improvement in healthcare delivery.
Johnson & Johnson’s Product Safety: Johnson & Johnson is dedicated to ensuring the safety and quality of its healthcare products through robust quality assurance practices.

Logistics Industry:

FedEx’s Supply Chain Efficiency: FedEx places a strong emphasis on logistics efficiency, on-time deliveries, and error reduction to maintain its industry-leading position.

Technology Industry:

Microsoft’s Software Quality Assurance: Microsoft’s TQM practices include rigorous software testing, security measures, and continuous improvement to provide reliable and secure products.
Apple’s Product Quality: Apple maintains high product quality standards and user experience by implementing TQM principles in product design, manufacturing, and customer support.

Airline Industry:

Southwest Airlines’ Employee Empowerment: Southwest Airlines promotes employee engagement and empowerment, leading to exceptional customer service and operational efficiency.

Electronics Industry:

Samsung’s Quality Assurance: Samsung ensures the quality, performance, and reliability of its electronic products through comprehensive quality assurance processes.

Coffee Industry:

Starbucks’ Coffee Excellence: Starbucks maintains the quality of its coffee beans, beverage preparation, and customer experience across its global chain of coffeehouses.

Diverse Industry Applications:

General Electric’s Six Sigma Success: General Electric’s extensive use of Six Sigma methodologies has resulted in substantial cost savings, process improvements, and enhanced quality control across its diverse business divisions.
Walmart’s Supply Chain Management: Walmart leverages TQM principles in its supply chain management to reduce costs, minimize errors, and improve inventory control.

Key takeaways

The TQM framework is an approach to long-term success by increasing customer satisfaction through the reduction or elimination of errors.
At its core, the TQM framework emphasizes a total commitment to long-term change through a cohesive and collaborative approach to employee problem-solving.
The TQM framework utilizes eight principles with a focus on customers, communication, employees, and incremental improvements.

Key Highlights

TQM Overview: Total Quality Management (TQM) is a management approach that focuses on continuous improvement and the provision of value to customers. It was developed by management consultant William Deming and introduced to the Japanese manufacturing industry.
Customer-Centric: TQM places the customer at the center of quality determination. Customer satisfaction is the ultimate measure of the effectiveness of company processes.
Employee Engagement: Engaged employees are empowered to contribute to continuous improvement, as they are not afraid of repercussions. They actively participate in identifying and implementing improvements across various systems.
Process Approach: TQM emphasizes refining processes to ensure consistency and increased productivity. Flowcharts and visual action plans are used to ensure logical process order.
System Integration: All employees in a company should understand the policies, standards, and objectives. Each employee’s role and contribution to the company’s success are significant, regardless of their function.
Strategic Approach: TQM encourages the development of quality-centric strategies, ensuring that company goals and values reflect a customer-first approach.
Continual Improvement: TQM promotes a culture of continuous improvement, aiming to gain a competitive advantage, meet stakeholder expectations, and reduce costs.
Data-Driven Decision-Making: Informed decisions are made by collecting data to understand the market, target audience, and customer needs, enhancing the ability to add value to the customer experience.
Communication: Effective communication plays a pivotal role in increasing employee morale, collaboration, and innovation. It fosters a holistic understanding of the company’s objectives.
Implementation Process – PDCA Cycle: TQM is implemented through the Plan-Do-Check-Act (PDCA) cycle, a model introduced by Walter Shewhart and popularized by Deming.
Plan (P): Stakeholders collaborate to identify the root cause of a problem through analysis methods like Fishbone diagrams or 5 Whys.
Do (D): Solutions to identified problems are developed and implemented based on employee feedback and effectiveness.
Check (C): Effectiveness of solutions is assessed through before-and-after comparisons, ensuring objectives are met. Successful solutions are integrated into broader processes.
Act (A): Results of the test are presented to stakeholders, and a plan for moving forward is charted.
Costs of Quality: TQM emphasizes that the cost of ensuring quality is less than fixing mistakes. Critics’ concerns about quality costs are countered by viewing them as the cost of not producing quality deliverables.
Cost Categories: Costs of quality are divided into prevention costs (creating safe and efficient work areas), external failure costs (post-release issues), internal failure costs (pre-release issues), and appraisal costs (inspection and testing).
TQM vs. Six Sigma: TQM and Six Sigma both focus on reducing errors and continuous improvement. Six Sigma is data-driven and aims to reduce defects by setting specific process error limits (Six Sigma level).
Key Benefits: TQM leads to long-term success by enhancing customer satisfaction through error reduction and continuous improvement. It emphasizes a collaborative approach to employee problem-solving and a commitment to change.

Companion/Related Frameworks	Description	Implications
Total Quality Management (TQM)	Total Quality Management (TQM) is a management approach focused on continuously improving the quality of products, services, and processes within an organization. It involves a systematic commitment to quality across all aspects of the organization, including leadership, employee involvement, process improvement, customer focus, and continuous learning and innovation.	TQM emphasizes a culture of quality, customer satisfaction, and continuous improvement throughout the organization. By adopting TQM principles and practices, organizations can enhance product and service quality, increase customer loyalty and satisfaction, reduce costs and waste, and drive sustainable growth and competitiveness in the marketplace.
Six Sigma	Six Sigma is a data-driven methodology for improving business processes and reducing defects or errors in products or services. It focuses on identifying and eliminating variation and defects through rigorous statistical analysis, process optimization, and problem-solving techniques. Six Sigma aims to achieve near-perfect performance by targeting a maximum of 3.4 defects per million opportunities (DPMO).	Six Sigma complements TQM by providing a structured and data-driven approach to process improvement and quality management. By applying Six Sigma methodologies such as DMAIC (Define, Measure, Analyze, Improve, Control), organizations can identify root causes of defects, optimize processes, and achieve measurable improvements in quality, efficiency, and customer satisfaction, aligning with the principles of TQM.
Lean Management	Lean Management, often referred to as Lean Manufacturing or Lean Enterprise, is a management philosophy focused on maximizing value and minimizing waste in operations and processes. It aims to streamline workflows, eliminate non-value-added activities, and optimize resources to deliver products or services more efficiently and effectively. Lean principles include continuous improvement, respect for people, and the pursuit of perfection.	Lean Management complements TQM by providing principles and tools to reduce waste, improve efficiency, and enhance overall organizational performance. By incorporating Lean methodologies such as value stream mapping, 5S (Sort, Set in order, Shine, Standardize, Sustain), and Kaizen (continuous improvement), organizations can achieve greater productivity, flexibility, and customer satisfaction, while aligning with the objectives of TQM.
ISO 9000	ISO 9000 is a series of international standards that provide guidelines and requirements for implementing quality management systems (QMS) in organizations. ISO 9001, the most well-known standard in the series, outlines criteria for establishing, implementing, maintaining, and continuously improving a QMS to ensure consistency, conformity, and customer satisfaction in product and service delivery.	ISO 9000 standards offer a framework for organizations to formalize and standardize their quality management processes and practices. By achieving ISO 9001 certification, organizations demonstrate their commitment to quality and customer satisfaction, enhance their credibility and market competitiveness, and establish a foundation for continuous improvement and organizational excellence, in alignment with the principles of TQM.
Continuous Improvement	Continuous Improvement, also known as Kaizen or incremental improvement, is a philosophy and approach focused on making small, incremental changes to processes, products, or services over time to achieve continuous growth and enhancement. It emphasizes empowering employees, fostering a culture of innovation, and encouraging experimentation and learning to identify and implement improvements at all levels of the organization.	Continuous Improvement is a core principle of TQM, promoting a culture of ongoing learning, innovation, and adaptation to change. By embracing continuous improvement practices such as Kaizen events, quality circles, and suggestion systems, organizations can engage employees, harness their collective knowledge and creativity, and drive incremental improvements in quality, efficiency, and customer satisfaction, in alignment with the objectives of TQM.