Total Quality Management

Total Quality Management – TQM
Introduction
In the eighties and faced with the expansionism of the free market in the middle of the Cold War,
the companies of the Capitalist Bloc discovered the importance of Quality, although many years
ago it was already sought under the name of standardization.
It was in Japan in the 1950s that the Production Process Approach emerged based on the final
Quality that reached the consumer, placing the Consumer's opinion as the central axis of this
Model.
When the 90's arrived, competition began as a result of globalization that led many companies to
adopt this model in order to continue with adequate productivity levels.
For many of them it meant a total commitment to this philosophy, for others it still occupied a
secondary level.
In any case, we can affirm that currently all organizations are aware of its importance and we see
how they are recognizing the strategic role of both product quality and quality management or
total quality management (TQM).
6.- Total Quality Management
Total Quality Management (TQM), or Total Quality Management, consists of applying the concept
of “Total Quality” to the company's management systems. The aim is to integrate quality into all
the organization's processes.
The implementation of a TQM system serves to help the organization achieve maximum efficiency
and flexibility in all its processes, focusing it on achieving short and medium-term objectives.
Within this concept we group terms such as “customer satisfaction”, applying both to the
organization and to the product or service itself. The aim is to obtain benefits for all members
within the organization, which is why it is not based solely on the idea of selling a product but on
expanding the range of action, introducing aspects such as improving working conditions, staff
training. , employee empowerment.
6.1 Processes and Waste

Processes are a series of interrelated tasks to transform inputs into outputs. To do this, techniques
directed towards the interior of a company are used that tend to maximize production, improve
and eliminate waste. On the other hand, they shore up costs and time, emphasizing increasing
value, reducing waste and simultaneously adopting a philosophy of continuous improvement.
Quality costs are those that the company incurs in meeting customer requirements.
There is a culture that accepts failure as something inevitable that cannot be prevented, which is
why complex 'quality control' organizations, inspectors, etc. are oversized. and in many cases it is
the clients themselves who act as detectors of this non-conformity.
Phil Crosby has defined quality costs as the contribution of two factors: Conformity costs and
nonconformity costs.
Compliance costs:
Reducing quality costs is possible by investing in preventive activities that focus on meeting
customer requirements (internal and external) the first time. It is about searching for root causes
of failures, analyzing them and implementing preventive solutions that definitively avoid their
recurrence.
There is a group of tasks associated with prevention that have a cost to carry them out, hence this
so-called compliance cost arises:
1. Investment in preventive activities

2. Operating Procedures Manuals
3. Operations planning
4. Statistical Process Control
5. Equipment calibration and testing
6. Provider development
7. Audits and quality systems
Non-conformity costs:
In order to draw attention to the cost incurred in not doing things right the first time and the need
for continuous improvement, they are measured as “Costs of Non-Conformity” (CONC).
The costs of non-conformity are all those that are incurred because errors occur. Without errors,
evaluation and correction tasks would not be necessary. These costs are basically produced by: a)
The proper work is not done: for example, a task that is superfluous to the client's requirements or
a report that no one reads and b) An activity is performed incorrectly the first time (defective
products, reprocessing). The main sources to identify CONC can be Failure Costs, Inspection Costs
and Costs of not doing the right things.
Failure costs:
Warranty repairs, product returns, waste, products sold as others of lower value, excessive after-
sales support, complaints management, rework, loss of efficiency and production capacity, excess
stock, delay in collections, overtime due to poor planning , idle capacity, loss of sales and image in
front of customers.
Inspection costs:
To find the economic value of the inspection costs, the costs of direct and indirect labor involved,
materials consumed, costs of services (electricity, gas, telephone, etc.), depreciation and
maintenance of equipment, financial effects will be considered. and extraordinary expenses or
losses (sale at lower value, waste treatment, etc.).
6.2.- FIFO method

The FIFO method gets its name from the English acronym for Party In First Out. That is, what has
entered our warehouse first must be what is first released. It is one of the most used logistics
management methods when handling perishable products, since it seeks to prevent the products
from reaching their expiration date in our facilities and thus reduce our losses for this reason.
How is a warehouse valued using the FIFO method?

A very important part of maintaining good inventory control is knowing exactly what the value of
the merchandise is. This assessment is something that is needed, not only to optimize logistics
processes, but also to comply with accounting legislation. To do this, it is necessary to always have
a series of parameters correctly registered:
 Date of acquisition or sale of our products

 Number of units sold or acquired
 Purchase price of each unit
With this data, a document is prepared (the most common thing is to have a computer program
that generates it automatically) in which each movement into or out of our warehouse is reflected.
6.3 Processes to Identify Problems

This TQM model is also based on continuous improvement, which is why it supports a philosophy
of continuous improvement, managing to optimize all areas and introducing tools that improve
the total quality of the company. For this reason, it is common to hear about internal and external
clients, that is, the former are associated with those who are part of the organization or company,
and the latter are those who have no internal relationship with the organization but who supply its
products. , so global satisfaction is sought.
The PDCA Cycle is the most used system to implement a continuous improvement system , this
translates into a system for identifying and correcting problems.
The name of the PDCA Cycle (or PHVA Cycle) comes from the acronym Plan, Do, Check and Act , in
English “Plan, Do, Check, Act”. It is also known as the Continuous Improvement Cycle or Deming
Circle, after Edwards Deming was its author. This methodology describes the four essential steps
that must be carried out systematically to achieve continuous improvement:
1. Plan (Plan): Activities that can be improved are sought and the objectives to be achieved are
established. To look for possible improvements, work groups can be held, listen to the opinions of
workers, look for new technologies that are better than those currently being used, etc.
2. Do (Do): Changes are made to implement the proposed improvement. It is generally advisable
to do a pilot test to test the operation before making large-scale changes.
3. Control or Verify (Check): Once the improvement has been implemented, a trial period is
allowed to verify its correct operation. If the improvement does not meet the initial expectations,
it will have to be modified to adjust it to the expected objectives.
4. Act (Act): Finally, once the trial period is over,

the results must be studied and compared with
the functioning of the activities before the
improvement was implemented. If the results
are satisfactory, the improvement will be
permanently implemented, and if they are not, it
will be necessary to decide whether to make
changes to adjust the results or whether to
discard it. Once step 4 is completed, you should
return to the first step periodically to study new
improvements to implement.
6.4 Just-In-Time
Just in Time is a system whose objective is to produce the exact quantity of a product. This takes
into account the demand for said item, which allows us to deliver an optimal service at the right
time, without the need to create stock.
The Just in Time method has a great impact on the production chain, since by assigning only the
necessary amount of raw material for the manufacture of a specific product; avoids waste,
additional costs and unnecessary stock.
In general, it is a production model that provides quick responses to the system, while reducing
production time in the process. This is due to the low maintenance of product stock levels, which
can be changed without the risk of presenting large quantities of obsolete items.
How does Just in Time work?

Following the Just in Time philosophy, it is demand that drives production. Therefore, the
company seeks to create a flow that allows the quantity of products required to be satisfied
without excess or missing items.
For this to happen, it is necessary to have precise knowledge of the consumer market and perfect
coordination with suppliers, making it necessary to establish reliable and close relationships.
Suppliers must be able to not only meet and abide by deadlines, but also maintain and guarantee
to customers the quality of the products or services delivered.
In the event that a logistics failure arises, production may be stopped.
6.5 Customer Satisfaction

Customer satisfaction is the basis of quality management systems. Customers need products and
services that meet their needs and expectations. Customer requirements may be specified by the
customer contractually or may be determined by the organization itself, but in either case, it is
ultimately the customer who determines the acceptability of the product.
The orientation of quality management systems to achieve customer satisfaction requires

measuring the degree of satisfaction achieved. To measure customer satisfaction we have
different methodologies and models. Fundamentally we distinguish between qualitative and
quantitative methodologies:
 Qualitative methodologies (focus groups, customer panels, mystery shopping, etc.) do

not require large population samples to analyze, although they normally have a higher
cost and their results are more complicated to treat statistically.
 Quantitative methodologies (surveys) require larger population samples, although
they normally have a lower cost and their results are easier to treat statistically.
Conclusion
Total Quality is then a system that has as its sole objective the full satisfaction of the customer's
needs, not admitting any margin of error, thus avoiding non-conformity. In its implementation, it
involves a high degree of responsibility and without exception to every task performed and to
each individual related to the company, from a production operator to a supplier, from a secretary
to the client himself. It is without a doubt the best competitive tool, offering a guarantee of zero
errors, zero waste, 100 percent first pass rates, and endless productivity. Of course, there are
several factors to take into account when implementing this system successfully. It is essential to
have a broad vision when ensuring that our actions in pursuit of quality are based on the reality of
the market and above all on the customer's point of view.
On the other hand, we can add that quality depends on expectations. The customer does not buy
a product or service, but rather answers to their needs. Therefore, when a customer chooses a
supplier they will take into account impressions about the organization that are based on how
much its performance relates to their own expectations. With the product you also acquire every
aspect of the experience of doing business with the company, which can be considered the quality
of the total transaction. Because although the client is not interested in whether each function
performs well or not, what is important for him will be that, when he needs a service outside of
the product, all functions work correctly, that is, uniformity in the total transaction.

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Total Quality Management – TQM

6.- Total Quality Management

6.1 Processes and Waste

1. Investment in preventive activities

6.2.- FIFO method

How is a warehouse valued using the FIFO method?

 Date of acquisition or sale of our products

6.3 Processes to Identify Problems

4. Act (Act): Finally, once the trial period is over,

How does Just in Time work?

In the event that a logistics failure arises, production may be stopped.

6.5 Customer Satisfaction

The orientation of quality management systems to achieve customer satisfaction requires

 Qualitative methodologies (focus groups, customer panels, mystery shopping, etc.) do

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