Total Quality Management (TQM) refers to management methods used to enhance quality and productivity in business organizations. TQM is a comprehensive management approach that works horizontally across an organization, involving all departments and employees and extending backward and forward to include both suppliers and clients/customers.
TQM is only one of many acronyms used to label management systems that focus on quality. Other acronyms include CQI (continuous quality improvement), SQC (statistical quality control), QFD (quality function deployment), QIDW (quality in daily work), TQC (total quality control), etc. Like many of these other systems, TQM provides a framework for implementing effective quality and productivity initiatives that can increase the profitability and competitiveness of organizations.
TQM, in the form of statistical quality control, was invented by Walter A. Shewhart. It was initially implemented at Western Electric Company, in the form developed by Joseph Juran who had worked there with the method. TQM was demonstrated on a grand scale by Japanese industry through the intervention of W. Edwards Deming—who, in consequence, and thanks to his missionary labors in the U.S. and across the world, has come to be viewed as the "father" of quality control, quality circles, and the quality movement generally.
Walter Shewhart, then working at Bell Telephone Laboratories first devised a statistical control chart in 1923; it is still named after him. He published his method in 1931 as Economic Control of Quality of Manufactured Product. The method was first introduced at Western Electric Company's Hawthorn plant in 1926. Joseph Juran was one of the people trained in the technique. In 1928 he wrote a pamphlet entitled Statistical Methods Applied to Manufacturing Problems. This pamphlet was later incorporated into the AT&T Statistical Quality Control Handbook, still in print. In 1951 Juran published his very influential Quality Control Handbook.
W. Edwards Deming, trained as a mathematician and statistician, went to Japan at the behest of the U.S. State Department to help Japan in the preparation of the 1951 Japanese Census. The Japanese were already aware of Shewhart's methods of statistical quality control. They invited Deming to lecture on the subject. A series of lectures took place in 1950 under the auspices of the Japanese Union of Scientists and Engineers (JUSE). Deming had developed a critical view of production methods in the U.S. during the war, particularly methods of quality control. Management and engineers controlled the process; line workers played a small role. In his lectures on SQC Deming promoted his own ideas along with the technique, namely a much greater involvement of the ordinary worker in the quality process and the application of the new statistical tools. He found Japanese executive receptive to his ideas. Japan began a process of implementing what came to be known as TQM. They also invited Joseph Juran to lecture in 1954; Juran was also enthusiastically received.
Japanese application of the method had significant and undeniable results manifesting as dramatic increases in Japanese product quality—and Japanese success in exports. This led to the spread of the quality movement across the world. In the late 1970s and 1980s, U.S. producers scrambled to adopt quality and productivity techniques that might restore their competitiveness. Deming's approach to quality control came to be recognized in the United States, and Deming himself became a sought-after lecturer and author. Total Quality Management, the phrase applied to quality initiatives proffered by Deming and other management gurus, became a staple of American enterprise by the late 1980s. But while the quality movement has continued to evolve beyond its beginnings, many of Deming's particular emphases, particularly those associated with management principles and employee relations, were not adopted in Deming's sense but continued as changing fads, including, for example, the movement to "empower" employees and to make "teams" central to all activities.
Different consultants and schools of thought emphasize different aspects of TQM as it has developed over time. These aspects may be technical, operational, or social/managerial.
The basic elements of TQM, as expounded by the American Society for Quality Control, are 1) policy, planning, and administration; 2) product design and design change control; 3) control of purchased material; 4) production quality control; 5) user contact and field performance; 6) corrective action; and 7) employee selection, training, and motivation.
The real root of the quality movement, the "invention" on which it really rests, is statistical quality control. SQC is retained in TQM in the fourth element, above, "production quality control." It may also be reflected in the third element, "control of purchased material," because SQC may be imposed on vendors by contract.
In a nutshell, this core method requires that quality standards are first set by establishing measurements for a particular item and thus defining what constitutes quality. The measurements may be dimensions, chemical composition, reflectivity, etc.—in effect any measurable feature of the object. Test runs are made to establish divergences from a base measurement (up or down) which are still acceptable. This "band" of acceptable outcomes is then recorded on one or several Shewhart charts. Quality control then begins during the production process itself. Samples are continuously taken and immediately measured, the measurements recorded on the chart(s). If measurements begin to fall outside the band or show an undesirable trend (up or down), the process is stopped and production discontinued until the causes of divergence are found and corrected. Thus SQC, as distinct from TQM, is based on continuous sampling and measurement against a standard and immediate corrective action if measurements deviate from an acceptable range.
TQM is SQC—plus all the other elements. Deming saw all of the elements as vital in achieving TQM. In his 1982 book, Out of the Crisis, he contended that companies needed to create an overarching business environment that emphasized improvement of products and services over short-term financial goals—a common strategy of Japanese business. He argued that if management adhered to such a philosophy, various aspects of business—ranging from training to system improvement to manager-worker relationships—would become far healthier and, ultimately, more profitable. But while Deming was contemptuous of companies that based their business decisions on numbers that emphasized quantity over quality, he firmly believed that a well-conceived system of statistical process control could be an invaluable TQM tool. Only through the use of statistics, Deming argued, can managers know exactly what their problems are, learn how to fix them, and gauge the company's progress in achieving quality and other organizational objectives.
In the modern context TQM is thought to require participative management; continuous process improvement; and the utilization of teams. Participative management refers to the intimate involvement of all members of a company in the management process, thus de-emphasizing traditional top-down management methods. In other words, managers set policies and make key decisions only with the input and guidance of the subordinates who will have to implement and adhere to the directives. This technique improves upper management's grasp of operations and, more importantly, is an important motivator for workers who begin to feel like they have control and ownership of the process in which they participate.
Continuous process improvement, the second characteristic, entails the recognition of small, incremental gains toward the goal of total quality. Large gains are accomplished by small, sustainable improvements over a long term. This concept necessitates a long-term approach by managers and the willingness to invest in the present for benefits that manifest themselves in the future. A corollary of continuous improvement is that workers and managers develop an appreciation for, and confidence in, TQM over a period of time.
Teamwork, the third necessary ingredient for TQM, involves the organization of cross-functional teams within the company. This multidisciplinary team approach helps workers to share knowledge, identify problems and opportunities, derive a comprehensive understanding of their role in the overall process, and align their work goals with those of the organization. The modern "team" was once the "quality circle," a type of unit promoted by Deming. Quality circles are discussed elsewhere in this volume.
For best results TQM requires a long-term, cooperative, planned, holistic approach to business, what some have dubbed a "market share" rather than a "profitability" approach. Thus a company strives to control its market by gaining and holding market share through continuous cost and quality improvements—and will shave profits to achieve control. The profitability approach, on the other hand, emphasizes short-term stockholder returns—and the higher the better. TQM thus suits Japanese corporate culture better than American corporate culture. In the corporate environment of the U.S., the short-term is very important; quarterly results are closely watched and impact the value of stocks; for this reason financial incentives are used to achieve short term results and to reward managers at all levels. Managers are therefore much more empowered than employees—despite attempts to change the corporate culture. For these reasons, possibly, TQM has undergone various changes in emphasis so that different implementations of it are sometimes unrecognizable as the same thing. In fact, the quality movement in the U.S. has moved on to other things: the lean corporation (based on just-in-time sourcing), Six Sigma (a quality measure and related programs of achieving it), and other techniques.
As evident from all of the foregoing, TQM, while emphasizing "quality" in its name, is really a philosophy of management. Quality and price are central in this philosophy because they are seen as effective methods of gaining the customer's attention and holding consumer loyalty. A somewhat discriminating public is thus part of the equation. In an environment where only price matters and consumers meekly put up with the successive removal of services or features in order to get products as cheaply as possible, the strategy will be less successful. Not surprisingly, in the auto sector, where the investment is large and failure can be very costly, the Japanese have made great gains in market share; but trends in other sectors—in retailing, for instance, where labor is imposed on customers through self-service stratagems—a quality orientation seems less obviously rewarding.
For these reasons, the small business looking at an approach to business ideal for its own environment may well adapt TQM if it can see that its clientele will reward this approach. The technique can be applied in service and retail settings as readily as in manufacturing, although measurement of quality will be achieved differently. TQM may, indeed, be a good way for a small business, surrounded by "Big Box" outlets, to reach precisely that small segment of the consuming public that, like the business itself, appreciates a high level of service and high quality products delivered at the most reasonable prices possible.
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