CHAPTER 9:

Quality And Total Quality Management

(TQM)

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 What is quality

 Quality is the totality of

features and characteristics
of a product or service that
bear on its ability to satisfy
stated or implied needs. ( The
American Society For Quality
Control )
2
 What is TQM?

 TQM is an organization wide

approach to continuously
improving the quality of all
the organization’s process,
products, and services.

3
 Fundamentals of Quality
Slide 1 of 3

 Consumer Perspective
• Quality can be defined as the degree to
which the product or service meets the
expectations of the customer.
 Producer Perspective
• Quality can be defined as the degree to
which the product or service conforms
to design specifications.

4
 Factors for Assessing Quality

 Product Factors
• Aesthetics, features, performance,
reliability, serviceability, durability,
conformance, and perceived quality.
 Service Factors
• Responsiveness, reliability, assurance,
empathy, and tangibles.

5
 Cost of Quality

 Prevention Costs
 Appraisal Costs
 Internal-Failure Costs
 External-Failure Costs

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 Prevention cost -Costs to prevent defective
output from occurring.
 Appraisal cost – Cost to assess the quality of
the product
 Internal-failure cost – Cost to repair or
dispose the defective output before delivery to
the customer.
 External-failure cost -Cost resulting from
defective output that is not detected prior to
delivery to the customer.

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 Two primary
responsibilities of
managers in a quality
centered company
 1.Participate in formulating
strategies and policies to help
the company win through
total quality excellence
 2.To deliver marketing quality
alongside production quality
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 Manager’s roles in
delivering high quality
goods and service
 1.Identify customer needs in well
defined target market
 2.Communicate customer
expectation accurately to the product
designers
 3.Make sure customer orders are
filled in correctly and the products
deliver on time
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 Manager’s roles in delivering high
quality goods and service

 4.Make sure customers receive

proper instructions and training
on how to use the products
 5.Measure company/product
image and customer satisfaction
on a continuous basis
 6.Continuously improve product
quality
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 Basic premises about
quality improvement
 1.Quality must be perceived by customers
 2.Quality must be reflected in every company activity, not
just in its products
 3.Quality requires total employee commitment
 4.Quality requires high quality partners
 5.Quality can always be improved
 6.Quality improvement requires quantum leaps.
 7.Quality does not cost more

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 How establish companies
achieve high standards of
quality
 1.They formulated a vision of quality in their mission
statement
 2.Top mgt involvement from the start of the quality drive
 3.Focused on customer needs
 4.Develop effective planning and implementation to achieve
the goal
 5.They trained their employees to use statistical process
control tools
 6.Provide empowerment
 7.Reward their employees for quality performance
 8.Made quality improvement an on going challenge

12
 What is TQM?

 TQM is an organization wide

approach to continuously
improving the quality of all
the organization’s process,
products, and services.

13
 The Key Ideas of TQM

1. A System Approach
2. The Tools of TQM
3. A customer orientation
4. The role of management
5. Employee participation

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 A System Approach

TQM focus on improving three

organizational systems :
a) The cultural/social system
b) The technical system
c) The management system

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 The Tools Of TQM

1.The fishbone diagram- also

known as the cause-and-
effect diagram that helps
shows possible causes of a
problem.
2.Benchmarking-Comparing
your products and processes
against the best in the world.
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 A Customer Orientation

A Focus on identifying
customer needs and
deliver customer
satisfaction

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 The role of
management
 1.Identify customer needs in well defined target market
 2.Communicate customer expectation accurately to the
product designers
 3.Make sure customer orders are filled in correctly and the
products deliver on time
 4.Make customers receive proper instructions and training
on how to use the products
 5.Measure company/product image and customer
satisfaction on a continuous basis
 6.Continuously improve product quality

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 Employee participation

TQM requires active employees

involvement.TQM also
requires empowerment –
letting employees make
decisions without asking for
approval from managers

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 Hurdles in implementing
TQM
1.Managers reluctance to
implement TQM e.g fear of failure
or lack of knowledge
2.Employee resistance to change
3.Interdepartmental conflicts
4.Lack of understanding on the
basic principles of TQM
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