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Home » Business Fundamentals » Operations management » Special topic: Total Quality Management

TQM’s seven basic elements

24 February, 2015 - 17:30

Available under Creative Commons-ShareAlike 4.0 International License.

Successful practice of Total Quality Management involves both technical and people aspects that cover
the entire organization and extend to relationships with suppliers and customers. Seven basic elements
capture the essence of the TQM philosophy: customer focus, continuous improvement, employee
empowerment, quality tools, product design, process management, and supplier quality.

Customer focus: Decisions of how to organize resources to best serve customers starts with a clear
understanding of customer needs and the measurement of customer satisfaction. For example, the Red
Cross surveys its blood donors to determine how it can make the blood donation experience more
pleasant and convenient. It collects information on the place, date and time donors came in, and asks
donors questions of whether the donation time was convenient, whether they were treated with
respect and gratitude, how long they had to wait to donate, and whether parking was adequate. By
understanding donors’ needs and experiences, Red Cross managers can determine strengths and
weaknesses of the donation service process and make adjustments if necessary.

Continuous improvement: An organizational culture that promotes continuous learning and problem
solving is essential in the pursuit of zero defects. The Toyota Production System (TPS) is a universal
continuous improvement system that has been effectively applied to many different types of
organizations, including the health care industry. Essential elements of the TPS culture include studying
process flow, collecting data, driving out wasteful non-value-added activities, and making everyone
responsible for quality improvement. In the case of health care, the TPS approach enabled one hospital
to analyze the causes of patient infections from catheters and pneumonia in patients on ventilators.
With simple changes in procedures that prevented patients from getting these secondary illnesses, the
hospital was able to save USD 40,000 per patient in these cases.

Employee involvement: Employees in a TQM environment have very different roles and responsibilities
than in a traditional organization. They are given responsibility, training, and authority to measure and
control the quality of the work they produce, they work together in teams to address quality issues, they
are cross-trained to be able to perform multiple tasks and have a greater understanding of the total
production process, and they have a more intimate understanding of the operation and maintenance of
their equipment. Employees are essential to the building of a continuous improvement organization.

Quality tools: Discussion of the details of quality tools extends beyond the scope of this chapter, but
there are seven basic quality tools that are used by front-line workers and managers in monitoring
quality performance and gathering data for quality improvement activities. These tools include: cause-
and-effect (fishbone) diagrams, flowcharts, checklists, control charts, scatter diagrams, Pareto analysis,
and histograms. The beauty of these tools is that they are easy to understand and apply in on-going
quality efforts.

Product design: Product design is a key activity to avoid costly internal and external failure costs. For
example, when a dental office designs the service process, it might have patients fill out a form that
covers important information on general health issues, allergies, and medications. This helps to avoid
future complications and problems. Staff, hygienists, and dentists are highly trained to follow proper
procedures, the facility is both functional and pleasant, and the equipment and tools are state of the art
to ensure that the patient’s desired outcome is achieved. In a manufacturing setting, products should be
designed to maximize product functionality, reliability, and manufacturability.

Process management: “Quality at the Source” is an important concept in TQM. It means that managers
and employees should be focused on the detailed activities in a process where good or bad quality is
created. For example, in a Toyota plant in the United States in Georgetown, Kentucky, one of the work
stations was responsible for installing seat belts and visors in every vehicle that came along the
assembly line. There were 12 possible combinations of visors and seat belts that would go into any
particular vehicle and the worker had to select the right combination and install the items in the vehicle
in 55 seconds. Even the best workers made several errors during a shift on this activity. After studying
the process, the workers came up with an idea to put all the items for a particular vehicle model in a
blue plastic tote. With this change, the worker only had to make one decision per vehicle. Almost all the
errors from the previous system were eliminated with this simple solution.

Supplier quality: The focus on quality at the source extends to suppliers’ processes as well, since the
quality of a finished product is only as good as the quality of its individual parts and components,
regardless of whether they come from internal or external sources. Sharing your quality and engineering
expertise with your suppliers, having a formal supplier certification program, and including your
suppliers in the product design stage are important measures to take to ensure that quality at the
source extends to the supplier network.

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Front Matter

Preface

Body Matter

The business eco-system: Your path to finding the pot of gold at the end of the rainbow!

The mind of the entrepreneur: Your entrepreneurial journey begins by embarking on your own hero’s
journey!

Business models and marketing: an overview

Learning objectives

How to organize and lead an entrepreneurial venture

Learning objectives

Selecting and managing your team

Learning objectives

Marketing on a global scale

Learning objectives

Operations management

Learning objectives

What is operations management?

One of three strategic functions

Strategic versus tactical operations decisions

Operations management provides competitive advantage!

The input/output transformation model

Operations decisions

Inventory decisions
Capacity decisions

Quality decisions

Scheduling decisions

Process decisions

Technology decisions

Location decisions

Chapter summary

Special topic: Total Quality Management

Quality costs

TQM’s seven basic elements

Quality awards and standards

Special topic: supply chain management

Bullwhip effect

Causes of the bullwhip effect

Counteracting the bullwhip effect

Other factors affecting supply chain management

Supplier selection

Conclusion

Special topic: just-in-time and lean systems

JIT manufacturing principles

Inventory reduction to expose waste

Demand-pull production system

Quick setups to reduce lot sizes

Uniform plant loading

Flexible resources
Line/cellular flow layouts

Total Quality Management

Employee empowerment

Conclusion: The evolution of JIT into “lean operations”

Securing and managing external relationships

Learning objectives

Financial and managerial accounting; financing your organization

Learning objectives

Leveraging with information technology

Learning objectives

Competitive intelligence

Learning objectives

Business ethics in a nutshell

Adding products and services

Learning objectives

International business for the entrepreneur

Growth strategies for start-ups

Learning objectives

Back Matter

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