CHAPTER 2

TOTAL QUALITY MANAGEMENT

1. Introduction

(1) Customer Oriented Method

• In a long run, a firm needs satisfied customers to survive.

• Customers are satisfied when they receive the total product quality they desire (including
ancillary and support goods and services) at a price they can afford and accept. If
organizations fail to provide the satisfaction and customers have alternative ways of
satisfying their needs, the customers will migrate and the firm will fail.
• It is important for every organization (including non-business organizations as well) to
recognize the central position (occupied by its customers) and the needs to have (as its
primary) aim their satisfaction.

(2) Selected Definitions

• Quality management is “all activity of the overall management function that determine
the quality policy, objectives and responsibilities …… within the quality system” (ISO
9001)

• TQM is a philosophy advocating four basic principles (i) intense focus on customer
satisfaction, (ii) accurate measurement of activities, (iii) continuous improvement of
products and processes, and (iv) empowerment of people. (Noori & Radford, 1995)

• TQM is a management philosophy that builds a customer driven, learning organization

dedicated to total customer satisfaction through continuous improvement in the
effectiveness and efficiency of the organization and its processes. (Corrigan, 1995)

• TQM is a system of management that gauges a company’s dedication to consistent

improvement and a sincere effort to serve its customers with what they expect all the
time. It is a philosophy of management to achieve greater productivity and a total
awareness of quality as an increasingly important element in competitiveness (Gould,
1992).
 TOTAL Everyone and everything that we do

QUALITY Giving the customer what they expect all the time

MANAGEMENT The way we act and operate our policies and

procedures, and our training and instruction to all
of our employees

Figure 2.1. Broken down of the simple meaning of total quality management (Gould, 1992)

(3) Total quality management

Total quality management is defined as both a philosophy and a set of guiding principles that
represent the foundation of a continuously improving organization. It is the application of
quantitative methods and human resources to improve all the processes within an organization
and exceed customer needs now and in the future. TQM integrates fundamental management
techniques, existing improvement efforts, and technical tools under a disciplined approach. TQM
consists of:

• Total: Made up of the whole

• Quality: Degree of excellence a product or service provides
• Management: Act, art, or manner of handling, controlling, directing, etc.

Therefore, total quality management is the art of managing the whole to achieve excellence.

2. THE MANAGEMENT OF TQM

(1) Basic Approach

• A committed and involved management to provide long-term top-to-bottom organization

support
• An unwavering focus on the customer, both internally and externally
• Effective involvement and utilization of the entire work force
• Continuous improvement of the business and production processes
• Treating suppliers as partners
• Establishing performance measures for the processes

Total quality management is not something that will occur at once within a couple of days. There
are no quick shortcuts. It takes a long time to build the appropriate emphasis and techniques into
the culture. Overemphasis on short-term results and profits must be taken aside so long-term
planning and constancy of purpose will prevail. Due to the TQM becomes more effective with
total cultural changes, it is recommended that TQM has to be planned with the cooperated
identity planning (CIP) of whole organization. Among all elements of TQM, the most important
quality maintenance factor is to control persons.

• Golden rule of TQM: Do unto others as you would have them do unto you.

(2) New and Old Cultures of Quality

TQM requires a cultural change. Following table compares the previous state with the new TQM
state for typical quality elements.

Quality Element Previous State TQM

Definition Product-oriented Customer-oriented

Priorities Second to service and cost First among equals of

service and cost

Decisions Short-term Long-term

Emphasis Detection Prevention

Errors Operations System

Responsibility Quality Control Department Everyone

Problem Solving Managers Teams

Procurement Price Life-cycle costs

Manager’s Role Plan, assign, control, and Delegate, coach, facilitate,

enforce and mentor
(This table was adapted from D.H. Besterfield. 1999. Quality Control, 5th Ed. Prentice Hall)

3. LEADERSHIP

(1) Implementation of Leadership

Quality, like cost and service, is the responsibility of everyone in the corporation, especially the
CEO. When a quality plan is made, it becomes part of the corporation’s business strategy and
leads to enhanced profit and an improved competitive position. To achieve never-ending quality
improvement, the CEO must directly involve in the quality improvement activity. Leadership is
also required to the entire management team.

(2) Quality Council

Quality council is the driver for the TQM movement which provides overall direction to build
quality into the culture. General duties of the council are:

• Develop the core values, vision statement, mission statement and quality policy statement
• Develop the strategic long-term plan with goals and the annual quality improvement
program with objectives
• Create the total education and training plan
• Determine and continually monitor the cost of poor quality
• Determine the performance measures for the organization, approve those for the
functional areas and monitor them
• Continually determine those projects that improve the processes, particularly those that
affect external and internal customer satisfaction
• Establish multifunctional project and departmental or work group teams and monitor
their progress
• Establish or revise the recognition and reward system to account for the new way of
doing business

(3) Seven Steps to Strategic Planning

• Discover customer needs

• Customer positioning
• Predict the future
• Gap analysis between current and future states
• Closing the gap by establishing goals and responsibilities
• Alignment of mission, vision and core values of organization
• Implementation

4. CUSTOMER SATISFACTION

(1) Who is the Customer?

Identification of customer is more difficult than it seems. Each individual or group must identify
and satisfy its customers. Customers can be both internal and external.

• Who are my customers?

• What do they need?
 • What are their measures and expectations?
• What is my product or service?
• Does my product exceed expectations?
• How do I satisfy their needs?
• What corrective action is necessary?
• Are customers included on teams?

(2) Customer Feedback

An effective feedback program is necessary to focus on the customer. The objectives of this
feedback program are to:

• Discover customer dissatisfaction

• Discover relative priorities of quality with other attributes like price and delivery
• Compare performance with the competition
• Identify customer needs
• Determine opportunities for improvement

(3) Customer Complaints and Service After the Sales/Operation

Every process, department and company should have a procedure for using customer complaints
which includes complaint acceptance, feedback, analysis, correctional acts and report. An
essential characteristic of customer satisfaction occurs after the product was delivered to and
used by customers. Therefore, the customer service after finishing the operation is very
important. Every company should establish a partnership relationship with its customers.

5. DEGREE OF QUALITY MANAGEMENT PRACTICE OF FOOD INDUSTRY

(1) Quality management system

• Does food industry have well established quality management systems?

• If YES, are the systems effective to improve the quality?
• Is there any problem existing in the system? And how do we modify the system?

(2) Commitment and understanding of total quality management

• Does the system work effectively?

• If NOT, what is the main cause of the malfunctioning of the system toward better quality?
• How do we upgrade the human factors causing some problems?
• Can the quality system fix the human factor problems?
(3) Levels of management

z Top management
z Middle management
z 1st line management

(4) Requirements of quality management for successful TQM

z Awareness of principal job description – quality improvement

z Visible management
z Understanding human relation
z Great cheer leader, communicator, and trainer
z Wide-view of total operation
z Great vision for the firm, its people, its products and its service
z Flexible atmosphere builder