What Is Total Quality Management? (A Complete Guide)

Updated 18 October 2022

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Total quality management (TQM) is a business approach designed to help teams meet and exceed customer satisfaction. It is an organisation-wide effort that allows companies to fulfil customers' requirements with minimum or no errors. Understanding what TQM is can help you use this approach to the benefit of the company. In this article, we discuss what total quality management is, explore its objectives and elements, list its benefits and show you how to implement the TQM approach.

What Is Total Quality Management?

Total quality management (TQM) is a process to identify and remove errors and impediments from manufacturing and supply chain management and increase customer satisfaction. This is an ongoing process and requires continuous efforts to ensure a reduction in errors through every stage of production. TQM requires involvement from all the employees during the production stage to ensure the overall quality of the final service or product. To reduce errors, TQM uses a company's internal process standards and guidelines.

Objective Of TQM

The main aim of TQM is to improve customer satisfaction for an organisation. They can achieve this by ensuring that all the processes, employees and any other organisational elements that are a part of production maintain a level of quality. Every function of the project requires following the quality standards set for that project, along with the company's internal quality standards. To do this, companies may invest in hiring candidates with an extensive skill set, or regularly upskill their employees with relevant training. This can help them achieve the quality outcome for every product or service they develop.

Primary Elements Of TQM

TQM is a customer-focused management system involving all employees in an organised, company-wide improvement. Effective communication, data and strategy are used to incorporate the activities and culture into the organisation. The primary elements of TQM include:

A focus on customer satisfaction

Implementing TQM is a great way to ensure customer satisfaction. Even after a company follows all the quality standards while developing a product, the customer ultimately decides if they find it satisfactory. TQM ensures that the errors are minimal, which can provide maximum customer satisfaction. Companies may do so by revising their quality standard based on the customers' requirements.

Complete employee involvement

Every employee contributes to the goals of the company in some way. Total employee involvement happens when the company empowers its employees and provides them with an environment free of fear. Allowing employees to make contributions without any fear can increase involvement, as they may openly suggest ideas and innovation for the betterment of the company. This may also allow them to suggest solutions to complex problems within the company.

Process-oriented thinking

Just like customer satisfaction, process thinking is also a central focus of TQM. A typical process involves steps to convert internal and external inputs into outputs. This is usually based on customer requirements. A company continuously monitors each step of the process and the performance measures to detect any unwanted deviations. This helps the companies to adhere to the process to achieve the desired outcomes.

A strategic and systematic approach

TQM involves strategic planning and a systematic approach towards achieving the goals of a company. Quality is generally the core component of any plans that a company makes. It integrates quality standards in all the processes of production strategically. This can help the company ensure that quality remains consistent throughout the processes.

Continual improvement

Continual improvement is another major component of TQM. The act of continuously improving encourages the company to self-analyse and constantly improve to be more competitive and effectively meet the expectations of its stakeholders. It can mean making regular improvements in all functions of the company. This can include processes, tools, equipment and employees. It can also help companies stay updated with the current business trends and allow them to adjust their operations accordingly.

Fact-based decision making

Performance data is a necessity to determine how well the organisation is performing. TQM depends on continuous collection and analysis of this data to improve the accuracy of decision-making, allow future forecasting and achieve consensus. This can help companies to predict any potential impediments during production and prepare to overcome them in advance.

Clear communications

Effective communication is integral to motivating employees and maintaining morale. This is true for daily operations and throughout periods of change. Method, strategy and appropriate timing are essential to the TQM approach. Many organisations incorporate these elements into the core values and principles of the business. Effective and open communication can also help build strong teams. Besides, it may help in transferring crucial information accurately at all management levels.

Integrated systems

TQM focuses on processes of the horizontal interconnections within the organisation in contrast to standard, vertically structured departments. Each small process combines to make up the larger processes that become the processes the business relies upon to define and implement the strategy. Maintaining a quality culture is essential for an organisation to achieve excellence in its services and products. The integrated system uses all elements of business improvement to constantly improve upon and exceed the expectations of all stakeholders, including employees and customers.

Benefits Of TQM

If properly implemented, the TQM approach can result in many benefits to the organisation, the stakeholders and employees. Here are some benefits of TQM:

Increased profits

By implementing TQM, companies can significantly reduce costs of quality. TQM aims to reduce errors and defects during production, which helps in ensuring zero errors post-production. This can help in reducing the post-production costs to fix any errors. When the cost to fix errors reduces, it may increase the profitability of the company.

Increased productivity

To ensure quality throughout production, TQM encourages companies to eliminate processes that do not add value. Removing unnecessary processes can allow companies to focus on the important parts of production to ensure higher productivity and improved outcomes. Optimal processes can also ensure the development of high-quality products.

Innovated processes

TQM encourages companies to derive effective solutions to ongoing problems with production by conducting research on them. By doing so, companies usually develop innovative processes to eliminate the problems. It may also help them in building tools to prevent those problems from occurring again. This can further improve the quality of the products.

Improved market appearance

TQM mainly focuses on customer satisfaction. Because of that, it allows companies to develop strategies to understand the market and the needs of their customers. This helps them develop products and services as per the customers' requirements, increasing customer satisfaction. Ultimately, this can create a positive image of a company in the market.

Strong competitive position

With the increase in competition, companies require staying updated with the industry trends and meeting the demands of the market. TQM allows companies to study the competition and develop effective strategies to gain an advantage over other competitors in the same market. It may also enable them to provide innovative products and services to the customers before anyone else. This is also known as the first-mover advantage in business terms.

Greater employee morale

Meeting or exceeding customer requirements and producing optimal outcomes can have positive effects on the employees of a company. They may feel involved and valued because of their contribution to the product. This can help in boosting their morale, which can help in sustaining the overall quality and increasing productivity of the company.

Increased customer retention

Consistently delivering high-quality products to the customers can help in developing a positive relationship between the company and the customers. This can be beneficial to the company, as the customer may do business with that company for a longer time, increasing customer retention. It may also help the companies gain new customers because of the positive experiences that the existing customers may share with others.

How To Implement TQM At An Organisation

The TQM approach has an outline that, when followed closely, can create a happier, more empowered environment. Here are six steps to take to implement TQM:

Evaluate the current process. Once top management decides to adopt the TQM approach, they can evaluate their current quality management systems, customer satisfaction and culture.
Adjust the current process. After identifying and prioritising customer demands, the company can adjust the products and services in response.
Create teams. Management may then outline the critical processes currently in use to meet customer needs and establish teams to focus on process improvement.
Implement the approach. A steering committee manages the momentum of the TQM approach while managers contribute through coaching, training, planning and other methods.
Review and revise the process. The company can conduct process standardisation and management regularly and revise them when necessary.
Request feedback. Communication and feedback for employees and stakeholders can be continual, and the company can set up a recognition and reward process for a total commitment on all levels.