total-quality-management

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.

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">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:

  1. 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.
  2. External failure costs – these are costs incurred once a product has been released in the market, such as returns, repairs, recalls, or warranty claims.
  3. 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.
  4. Appraisal costs – these cover the cost of inspection and testing during the product development lifecycle, such as the evaluation of supplier materials.

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.

Connected Business Frameworks

Scientific Management

scientific-management
Scientific Management Theory was created by Frederick Winslow Taylor in 1911 as a means of encouraging industrial companies to switch to mass production. With a background in mechanical engineering, he applied engineering principles to workplace productivity on the factory floor. Scientific Management Theory seeks to find the most efficient way of performing a job in the workplace.

Poka-Yoke

poka-yoke
Poka-yoke is a Japanese quality control technique developed by former Toyota engineer Shigeo Shingo. Translated as “mistake-proofing”, poka-yoke aims to prevent defects in the manufacturing process that are the result of human error. Poka-yoke is a lean manufacturing technique that ensures that the right conditions exist before a step in the process is executed. This makes it a preventative form of quality control since errors are detected and then rectified before they occur.

Gemba Walk

gemba-walk
A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.

Dual Track Agile

dual-track-agile
Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

Scaled Agile

scaled-agile-lean-development
Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.

Kanban Framework

kanban
Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.

Toyota Production System

toyota-production-system
The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Six Sigma

six-sigma
Six Sigma is a data-driven approach and methodology for eliminating errors or defects in a product, service, or process. Six Sigma was developed by Motorola as a management approach based on quality fundamentals in the early 1980s. A decade later, it was popularized by General Electric who estimated that the methodology saved them $12 billion in the first five years of operation.

Supply Chain

data-supply-chain
A classic supply chain moves from upstream to downstream, where the raw material is transformed into products, moved through logistics and distributed to final customers. A data supply chain moves in the opposite direction. The raw data is “sourced” from the customer/user. As it moves downstream, it gets processed and refined by proprietary algorithms and stored in data centers.

Other strategy frameworks

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