Definition and Explanation of the Concept of Total Quality Management System :

Total quality management (TQM) is an improvement program which provides tools and techniques for continuous improvement based on facts and analysis; and if properly implemented, it avoids counterproductive organizational infighting. The most popular approach to continuous improvement is known as total quality management (TQM). There are two major characteristics of total quality management (TQM) (1) a focus on serving customers and (2) systemic problem solving teams made up of front line workers. A variety of specific tools are available to aid teams in their problems solving. One of these tools is benchmarking which involves studying organizations that are among the best in the world at performing a particular task. Perhaps the most important and pervasive TQM problem solving tool is Plan-do-Check-Act (PDCA) Cycle. The plan do check act cycle is a systematic fact based approach to continuous improvement.

Advantages of Total Quality Management:

1. Improves reputation- faults and problems are spotted and sorted quicker (zero defects) 2. Higher employee morale workers motivated by extra responsibility, team work and involvement in decisions of TQM 3. Lower costs Decrease waste as fewer defective products and no need for separate 4. Quality Control inspectors

5. The advantages are higher Quality product. A workforce that is commonly focused at all levels. Higher Customer satisfaction, In the long term it should also be more profitable.

Disadvantages of Total Quality Management:

1. Initial introduction costs- training workers and disrupting current production whilst being implemented 2. Benefits may not be seen for several years 3. Workers may be resistant to change may feel less secure in jobs

4. The disadvantages are: Initially higher cost of production as more is recognized as rejects. Cost of training personnel, cost of implementing stages of feedback for employees.

Using TQM for a Competitive Advantage in Business

The Total Quality Management (TQM) philosophy of doing business emphasizes lowering costs by reducing waste, helping suppliers provide quality products and satisfying the customer with quality goods and services. Companies that can produce goods at lower costs than their competitors, while delivering quality products that satisfy their customers will have an advantage over those companies that do not duplicate those feats. Implementing TQM can help a company gain a competitive advantage in their business. Questions you may have include:

How can a company reduce costs? What does helping suppliers and workers do? How does customer satisfaction give an advantage?

This lesson will answer those questions. There is a mini-quiz near the end of the lesson.

Reducing costs
Achieving lower costs for getting or making products gives a company a great competitive advantage over their competition.

Getting products - case study

Wal-Mart has formed alliances with their suppliers, such that they are able to purchase goods at a discount that their competitors cannot achieve. The result is that Wal-Mart is able to offer products at such low prices that have actually driven many competitors out of business.

Making products - case study

Japanese automobile manufacturers Toyota and Honda have greatly lower worker pension and healthcare costs than the "Big-3" American manufacturers, General Motors (GM), Ford and Chrysler. This is true even for the Toyota and Honda facilities in the United States. The cost per car for worker benefits paid by is $1360 for GM, $735 for Ford and $630 for Chrysler. Meanwhile, it costs Toyota $180 and Honda $106 per car. This results in much higher profits or lower prices for the Japanese autos. Also, the Big-3 each have about 18,000 in "excess workers" that drive up their costs.

The Japanese auto manufacturers are winning the competition in terms of reduced costs.

Manufacturing cost reduction

Companies want to reduce the cost of getting or making their products. A major portion of the cost of goods involves wasteful practices that result in scrapped parts and returned goods from dissatisfied customers. By continually improving the processes involved in making the product or delivering the service, a company can be more effective in reducing losses due to waste. This will allow the business to deliver products at lower prices while still achieving a good profit. Competitors may not be able to meet those prices. Eliminating errors is a major goal. An extension of TQM is the Six-Sigma approach that seeks to eliminate errors to 6 parts in a million (six sigma deviation). Getting lower cost, quality good from suppliers will also reduce costs.

Helping suppliers
A company's workers and suppliers provide the input that determined the cost and quality of the products being made. The company that empowers its workers and suppliers and helps them achieve these goals will have a competitive advantage over the company that browbeats its workers or suppliers. This is a concept that was developed for the U.S. Air Force and is explained in the Three Phase Approach to TQM in the Air Force's SDI Programs.

Quality supplies
The first part of providing the customers with quality goods involves purchasing those products from suppliers or getting quality parts to make your own product. An important aspect of Kurtusian TQM is to help the supplier provide quality to your company. Often companies browbeat their suppliers into providing goods at low costs. Wal-Mart has been known to be very tough on suppliers, even driving some out of business if they did not bend to Wal-Mart's demands. Other companies have also used such negative tactics. By working closely with suppliers, you can provide a partnership where you get the quality supplies needed to gain your competitive advantage.

Quality workers
Your workers proved services that allow you to make quality products. Others deal with the customers and provide quality service to those customers. Courteous sales representatives can make for a pleasant buying experience for the customers. Some companies demand much from their workers and even if they pay them well, they do not have a truly motivated staff. Some companies even demand that the sales people smile and act friendly, even if they don't feel like it. Making the workers part of the team and helping them provide quality work can give you a good competitive advantage on competition that may have an unhappy workforce.

Customer satisfaction
A customer that is satisfied or even pleased with the products and services received, sees them as value-added. They will be glad to return to the company to purchase other items. They will refer others to the company. This is not only true in sales to individuals, but it is also vital in corporate sales. In selling product or providing supplies to another company, you need to make sure the material is to specification and gives them the assurance that they can count on your company to provide such quality good in the future. Customer satisfaction is the ultimate advantage a company can have over their competitors.

Summary
A company that can produce goods at lower costs than their competitors, while delivering quality products that satisfy their customers will have an advantage over those companies that do not duplicate those feats. The Total Quality Management (TQM) business philosophy of satisfying the customer with quality goods and services, reducing waste and empowering workers and suppliers is a method to achieve those goals.

Total Quality Management (TQM) is a management style that implies non-stop process of quality improvement of products, processes and personnel work. This is a bunch of methodologies that drive company to strategic goals achievement through unceasing quality development. It is focused on production of goods and services that possess highquality from viewpoint of customers. TQM was elaborated on basis of Edward Deming's theory. This philosophy has successfully started many years ago in Japan and USA . TQM has shown phenomenal results and now it is used in many successful enterprises all across the world. It allows obtaining faster, fundamental and more efficient business development, because it stimulates production of much better products for better prices. There are 5 "sicknesses" or mistakes that should be driven out of organization for successful implementation of TQM. If these "sicknesses" are not eliminated, they can entail failure of TQM and gradually destroy a company. Here are these "sicknesses":

Management of only basic line. Organization that takes care only about basic line of development and manages only numeric results is doomed to failure. Management is a hard work and manager that works only with numbers lightens his/her task. Actually manager should know all process workflow and being involved into the process, understand what can be the source of problems and be an example for subordinates. Evaluating of activity with a help of quantitative rates system . Evaluating of activity with a help of quantitative rates system. Evaluating that uses system of quantitative rates, reports, annual reviews of attainments, etc. can cause forced quotes, classification and ratings that entail unhealthy competition, break of team collaboration within company. Instead of such systems managers should personally comment employees' work, advice and help to improve it. Stress on receiving of short-term benefits. If employees have experience of getting fast profits they will try to work in the same way. Management should convince workers that it is better to prefer long-term and stable growth and improvement than quick, short-term profits. Lack of strategy. If there is no any sequence of realizing goals in a company, employees will feel uncertainty about possibility of constant professional and carrier growth. Organization should have continuously realizing strategic plan where considerable part should be devoted to questions of quality improvement. Staff turnover. If high staff turnover within organization is apparent, this indicates serious problems. Eliminating of previous four sicknesses will help to solve this one. Management should assume the proper arrangement to make employee feel as an important part of one consolidated team.

Advantages of TQM: TQM gives some short-term advantages, however majority of advantages is long-termed, and tangible benefits from them appear only after successful realization. In big organizations this process can take few years. Long-term benefits expected from

implementation of TQM - higher productivity, higher moral tonus of personnel, decreasing of costs and increasing of consumers' trust. This will make company popular and increase its status within society. Avoidance of mistakes allows company to save money and time. Extra resources can be used for range of products and services expansion or for other improvements. TQM creates atmosphere of enthusiasm and satisfaction with performed job and welcomes awarding bonuses for creative approach to professional duties. TQM intensively uses team style of work that allows employees share their experience, use their skills effectively and apply joint efforts for solving issues. As far as team members gain experience of team problem solving they can be a part of cross-department "mega teams" that work at tasks that are beyond of local group possibilities. TQM gives to organization more flexibility in work and problem solving and improve work environment for each employee. As we can see team collaboration is an important part of TQM philosophy. In order to be efficient each team should be managed properly. For this purpose special software can be used. VIP Task Manager is intuitive, user friendly team collaboration and small project management software. It is ideal for multiple users real-time collaboration. Features include time and task planning and tracking, reporting, email and in-system notifications, file attachment, access permissions, task tree view, scheduler (calendar), charts and data import/export. VIP Task Manager is easy to use and simple to deploy. It allows team members to access the same database via LAN or Internet and see, edit, and report their tasks. VIP Task Manager includes flexible interface, customizable workflow and task attributes.

Conclusions TQM attempts to have maximum customer satisfaction through providing quality products and services but uncongenial business environment, high cost of production, increasing prices of products unfair competition in market are the major constraints in using TQM. Once the business is profitable, they can develop quality products and services. Absence of breakeven point decline in demand for products, lack of trained manpower are other limiting factors for such use. We should try to have market research to satisfy our customers as well as managerial efficiency and effectiveness sidely side. We should also develop strategic management techniques to stand in open market economy. Once the strategies are appropriate business can see well and further enhance the wide are of TQM devices towards the customer's goals achievement. Academic research on the holistic approach to TQM is in its primitive stage. So, there is a clear need for more precise measures of quality. Endeavour has been paid throughout this paper to find out a comprehensive approach to TQM. The technical tools of quality improvement may be well developed, but its theory and practice lag far behind. The concept of quality is only dimly understood by the practicing managers. Links to market share, cost, and profitability are unclear. Measurement is also complex. Empirical researches on these issues like costs, market share, prices, profitability, employee turnover, and the like, as dependent variable may be conducted in the future. Because of the recent trade globalization, developing countries are in crying needs to increase productivity and elevate the quality of products. More empirical research can be conducted in future to make quality a vital issues in every sector of the economy. Over the past few decades, Information Technology (IT) helps TQM organization achieve its goals. Study may be conducted to reveal the effectiveness of IT application toward quality assurance.

Implementation of Total Quality Management (TQM)

The Concept of Continuous Improvement by TQM: TQM is mainly concerned with continuous improvement in all work, from high level strategic planning and decision-making, to detailed execution of work elements on the shop floor. It stems from the belief that mistakes can be avoided and defects can be prevented. It leads to continuously improving results, in all aspects of work, as a result of continuously improving capabilities, people, processes, technology and machine capabilities. Continuous improvement must deal not only with improving results, but more importantly with improving capabilities to produce better results in the future. The five major areas of focus for capability improvement are demand generation, supply generation, technology, operations and people capability.

A central principle of TQM is that mistakes may be made by people, but most of them are caused, or at least permitted, by faulty systems and processes. This means that the root cause of such mistakes can be identified and eliminated, and repetition can be prevented by changing the process.1 There are three major mechanisms of prevention: 1. Preventing mistakes (defects) from occurring (Mistake - proofing or Poka-Yoke). 2. Where mistakes can't be absolutely prevented, detecting them early to prevent them being passed down the value added chain (Inspection at source or by the next operation). 3. Where mistakes recur, stopping production until the process can be corrected, to prevent the production of more defects. (Stop in time). Implementation Principles and Processes: A preliminary step in TQM implementation is to assess the organization's current reality. Relevant preconditions have to do with the organization's history, its current needs, precipitating events leading to TQM, and the existing employee quality of working life. If the current reality does not include important preconditions, TQM implementation should be delayed until the organization is in a state in which TQM is likely to succeed. If an organization has a track record of effective responsiveness to the environment, and if it has been able to successfully change the way it operates when needed, TQM will be easier to implement. If an organization has been historically reactive and has no skill at improving its operating systems, there will be both employee skepticism and a lack of skilled change agents. If this condition prevails, a comprehensive program of management and leadership development may be instituted. A management audit is a good assessment tool to identify current levels of organizational functioning and areas in need of change. An organization should be basically healthy before beginning TQM. If it has significant problems such as a very unstable funding base, weak administrative systems, lack of managerial skill, or poor employee morale, TQM would not be appropriate.5 However, a certain level of stress is probably desirable to initiate TQM. People need to feel a need for a change. Kanter (1983) addresses this phenomenon be describing building blocks which are present in effective organizational change. These forces include departures from tradition, a crisis or galvanizing event, strategic decisions, individual "prime movers," and action vehicles. Departures from tradition are activities, usually at lower levels of the organization, which occur when entrepreneurs move outside the normal ways of operating to solve a problem. A crisis, if it is not too disabling, can also help create a sense of urgency which can mobilize people to act. In the case of TQM, this may be a funding cut or threat, or demands from consumers or other stakeholders for improved quality of service. After a crisis, a leader may intervene strategically by articulating a new vision of the future to help the organization deal with it. A plan to implement TQM may be such a strategic decision. Such a leader may then become a

prime mover, who takes charge in championing the new idea and showing others how it will help them get where they want to go. Finally, action vehicles are needed and mechanisms or structures to enable the change to occur and become institutionalized.8 Steps in Managing the Transition: Beckhard and Pritchard (1992) have outlined the basic steps in managing a transition to a new system such as TQM: identifying tasks to be done, creating necessary management structures, developing strategies for building commitment, designing mechanisms to communicate the change, and assigning resources. Task identification would include a study of present conditions (assessing current reality, as described above); assessing readiness, such as through a force field analysis; creating a model of the desired state, in this case, implementation of TQM; announcing the change goals to the organization; and assigning responsibilities and resources. This final step would include securing outside consultation and training and assigning someone within the organization to oversee the effort. This should be a responsibility of top management. In fact, the next step, designing transition management structures, is also a responsibility of top management. In fact, Cohen and Brand (1993) and Hyde (1992) assert that management must be heavily involved as leaders rather than relying on a separate staff person or function to shepherd the effort. An organization wide steering committee to oversee the effort may be appropriate. Developing commitment strategies was discussed above in the sections on resistance and on visionary leadership.6 To communicate the change, mechanisms beyond existing processes will need to be developed. Special all-staff meetings attended by executives, sometimes designed as input or dialog sessions, may be used to kick off the process, and TQM newsletters may be an effective ongoing communication tool to keep employees aware of activities and accomplishments. Management of resources for the change effort is important with TQM because outside consultants will almost always be required. Choose consultants based on their prior relevant experience and their commitment to adapting the process to fit unique organizational needs. While consultants will be invaluable with initial training of staff and TQM system design, employees (management and others) should be actively involved in TQM implementation, perhaps after receiving training in change management which they can then pass on to other employees. A collaborative relationship with consultants and clear role definitions and specification of activities must be established. In summary, first assess preconditions and the current state of the organization to make sure the need for change is clear and that TQM is an appropriate strategy. Leadership styles and organizational culture must be congruent with TQM. If they are not, this should be worked on or TQM implementation should be avoided or delayed until favorable conditions exist.

Remember that this will be a difficult, comprehensive, and long-term process. Leaders will need to maintain their commitment, keep the process visible, provide necessary support, and hold people accountable for results. Use input from stakeholder (clients, referring agencies, funding sources, etc.) as possible; and, of course, maximize employee involvement in design of the system.7 Always keep in mind that TQM should be purpose driven. Be clear on the organization's vision for the future and stay focused on it. TQM can be a powerful technique for unleashing employee creativity and potential, reducing bureaucracy and costs, and improving service to clients and the community.