Total Quality Management


TQM is a philosophy of quality management that originated in Japan in the 1950s, it seeks to integrate the quality management efforts of all groups in an organisation and is considered to be a significant factor in Japanese global business success. The traditional approach takes the view that less than 100% quality is acceptable because the cost of reaching 100% quality outweighs the benefits. Whilst the TQM principle takes the view that the costs of prevention (getting things right first time) are less than the costs of correction.

There are four categories of TQM costs

Prevention costs                                                                  

Costs incurred in preventing the production of products that do not conform to specification.  They include the costs of preventive maintenance, quality planning & training & the extra costs of acquiring high quality raw materials.

Appraisal costs                                                                    

Costs incurred to ensure that materials & products meet quality conformance standards.  They include the costs of inspecting purchased parts, work in process & finished goods, quality audits & field tests.

Internal failure costs                                                                       

Costs associated with materials & products that fail to meet quality standards.  They include costs incurred before the product is despatched to the customers, such as the costs of scrap, repair, downtime & work stoppages caused by defects.

External failure costs                                                                      

Costs incurred when products or services fail to conform to requirements or satisfy customer needs after they have been delivered. They include the costs of handling customer complaints, warranty replacement, repairs of returned products & the costs arising from a damaged company reputation.  Costs within this category can have a dramatic impact on future sales.

Opportunity costs

Advocates of TQM argue that the impact of less than 100% quality in terms of lost potential for future sales also has to be taken into account.

TQM Implementation 

In any implementation there are two things going on. First is the process being implemented, in this case the TQM process and secondly the process of implementation itself which is a process of change management.

TQM and the management of change

To ensure the succesful implementation of a TQM programme, it is import that TQM tools are used in the process. Due to the fact TQM is process oriented the best way to change is to set up process management teams who will be tasked with solving real business problems. To do this it is necessary to align the team-roles and responsibilities with the process with which they are dealing. In this way the behaviours and attitudes are changed as a result of doing something practical and not the other way round.