Total quality management (TQM) was one of the earliest management ‘fashions’. Its peak of popularity was in the late 1980s and early 1990s. As such it has suffered from something of a backlash in recent years. Yet the general precepts and principles that constitute TQM are still huge. Few, if any, managers have not heard of TQM and its impact on improvement. Indeed, TQM has come to be seen as an approach to the way operations and processes should be managed and improved, generally.
What is TQM?
A.V. Feigenbaum, generally held to be the originator of the term, defines TQM as ‘an effective system for integrating the quality development, quality maintenance and quality improvement efforts of the various groups in an organisation so as to enable production and service at the most economical levels which allow for full customer satisfaction’. However, it was the Japanese who first made the concept work on a wide scale and subsequently popularised the approach and the term TQM. It was then developed further by several, so-called, ‘quality gurus’. Each ‘guru’ stressed a different set of issues, from which emerged the TQM approach to operations improvement (although they rarely used the term TQM). For example, W.E. Deming, considered in Japan to be the father of quality control, asserted that quality starts with top management and is a strategic activity.2 Deming’s basic philosophy is that quality and productivity increase as ‘process variability’ (the unpredictability of the process) decreases. He emphasises the need for statistical control methods, participation, education, openness and purposeful improvement.
The elements of TQM
TQM is best thought of as a philosophy of how to approach the organisation of quality improvement. This philosophy, above everything, stresses the ‘total’ of TQM. It is an approach that puts quality (and indeed improvement generally) at the heart of everything that is done by an operation. This totality can be summarised by the way TQM lays particular stress on the following elements.
Meeting the needs and expectations of customers
TQM was one of the first of the ‘customer-centric’ approaches. In the TQM approach, meeting the expectations of customers means more than simply meeting customer requirements. It involves the whole organisation in understanding the central importance of customers to its success and even to its survival. Customers are seen not as being external to the organisation but as the most important part of it.
Covering all parts of the organisation
One of the most significant elements of TQM is the concept of the internal customer and internal supplier. This means that everyone is a customer within the organisation and consumes goods or services provided by other internal suppliers, and everyone is also an internal supplier of goods and services for other internal customers. The assumption is that errors in the service provided within an organisation will eventually affect the external customer. TQM utilises this concept by stressing that each process in an operation has a responsibility to manage these internal customer–supplier relationships.
Including every person in the organisation
TQM uses the phrase ‘quality at source’, stressing the impact that each individual has on quality. The contribution of all individuals in the organisation is expected to go beyond ‘not make mistakes’. Individuals are expected to bring something positive to improving the way they perform their jobs. The principles of ‘empowerment’ are frequently cited as supporting this aspect of TQM, an idea that seemed radical when it first began to migrate from Japan in the late 1970s. Some Japanese industrialists even thought (mistakenly) that companies in Western economies would never manage to change. Take, for example, a statement by Konosuke Matsushito which, at the time, attracted considerable publicity:
‘We are going to win and the industrial West is going to lose out – there is nothing much you can do about it, because the reasons for your failure are within yourselves. For you, the essence of management is getting the ideas out of the heads of bosses into the hands of labour. For us, the core of management is precisely the art of mobilising and pulling together the intellectual resources of all employees in the service of the firm. Only by drawing on the combined brainpower of all its employees can a firm face up to the turbulence and constraints of today’s environment. That is why our large companies give their employees three to four times more training than yours. This is why they foster within the firm such intensive exchange and communication. This is why they seek constantly everybody’s suggestions and why they demand from the educational system increasing numbers of graduates as well as bright and well-educated generalists, because these people are the lifeblood of industry.’
Examining all costs which are related to quality, especially failure costs
The costs of quality are usually categorised as prevention costs (identifying and preventing potential problems, improving the design of products and services and processes to reduce quality problems, training and development, process control, etc.), appraisal costs (the costs of controlling quality to check to see if problems or errors have occurred during and after production), internal failure costs (costs associated with errors which are dealt with inside the operation, scrap, rework, lost production time, failure-related disruption, etc.) and external failure costs (the loss of customer goodwill, litigation, guarantee and warranty costs, etc.). TQM holds that increasing the costs associated with prevention will bring even greater reductions in the other cost categories.
Getting things ‘right first time’, i.e. designing-in quality rather than inspecting it in
TQM shifts the emphasis from reactive (waiting for something to happen) to proactive (doing something before anything happens). This change in the view of quality costs has come about with a movement from an inspect-in (appraisal-driven) approach to a design-in (getting it right first time) approach.
Developing the systems and procedures that support improvement
Typical of these is the ISO 9000 series, a set of worldwide standards that establishes requirements for companies’ quality management systems. It is different from, but closely associated with, TQM. ISO 9000 registration requires a third-party assessment of a company’s quality standards and procedures, and regular audits are made to ensure that the systems do not deteriorate.
Criticisms of TQM
Many of the criticisms of TQM tend to fall into two slightly conflicting categories. The first is that historically many TQM initiatives fail, or at least are not entirely successful. The second is that, even if TQM is not the label given to improvement initiatives, many of the elements of TQM, such as continuous improvement, have now become routine.
As far as the first criticism is concerned, not all TQM initiatives that are launched, often with high expectations, will go on to have a major impact on performance. Companies who were in the vanguard of the TQM movement, such as HewlettPackard, admit that at one time they pushed quality for its own sake, and have shifted too much responsibility down to the shop floor. Similarly The Economist magazine, reporting on some companies’ disillusionment with their experiences, quoted from several surveys. For example:
- ‘Of 500 US manufacturing and service companies, only a third felt their Total Quality programmes had significant impact on their competitiveness.
- ‘Only a fifth of the 100 British firms surveyed believed their quality programmes had achieved tangible results.
- ‘Of those quality programmes that have been in place for more than two years, two thirds simply grind to a halt because of their failure to produce hoped-for results.’
Also the excessive ‘quality bureaucracy’ associated with TQM, in particular the continued use of standards and procedures, encourages ‘management by manual’ and over-systematised decision making, and is expensive and time-consuming. Furthermore, it is too formulaic, encouraging operations to substitute a ‘recipe’ for a more customised and creative approach to managing operations improvement.
As far as the second criticism (‘We have incorporated much of TQM anyway’) is concerned, it is undoubtedly true that some of the fundamentals of TQM have entered the vernacular of operations improvement. The idea of continuous improvement is perhaps the most obvious example. However, other elements such as the internal customer concept including service level agreements (SLAs), the idea of internal and external failure-related costs, and many aspects of individual staff empowerment, have all become widespread. Yet this is not really a criticism of TQM as such. Rather it is a criticism of the practice of ‘packaging’ individual improvement elements under a single improvement ‘brand’.
Lessons from TQM
The core concept of a ‘total, or holistic, view’ of any issue is both powerful and attractive. At its simplest, it provides an outline ‘checklist’ of how to go about operations improvement. It is also capable of being developed into a more prescriptive form. The best example of this is the EFQM Excellence Model, developed by the European Foundation for Quality Management (EFQM). Originally the European Quality Award (EQA), awarded to the most successful exponent of total quality management in Europe each year, the model on which the award was based was modified and renamed The EFQM Excellence Model or Business Excellence Model. The EFQM Excellence Model is shown in below figure. The five ‘enablers’ are concerned with how results are being achieved, while the four ‘results’ are concerned with what the company has achieved and is achieving. The main advantage of using such models for self-assessment seems to be that companies find it easier to understand some of the more philosophical concepts of TQM when they are translated into specific areas, questions and percentages. Self-assessment also allows organisations to measure their progress in changing their organisation and in achieving the benefits of TQM. An important aspect of self-assessment is an organisation’s ability to judge the relative importance of the assessment categories to its own circumstances.
Source: Nigel Slack & Michael Lewis, 2011, OPERATION STRATEGY, 3rd edition, Pearson Education Limited,