Total Quality Management

4.	Total Quality Management Total Quality Management (TQM) requires that the principles of quality management are applied in all aspects and at every level in an organisation (Hill, 2005). TQM has evolved over a number of years from ideas presented by a number of quality Gurus. Deming (1985) proposed an implementation plan consisting of 14 steps which emphasises continuous improvement of the production process to achieve conformance to specification and reduce variability. This is achieved by eliminating common causes of quality problems such as poor design and insufficient training and special causes such as a specific machine or operator. He also places great emphasis on statistical quality control techniques and promotes extensive employee involvement in the quality improvement program. Juran (2001) put forward a 10 step plan in which he emphasises the elements of quality planning - designing the product quality level and ensuring the process can meet this, quality control - using statistical process control methods to ensure quality levels are kept during the production process and quality improvement - tackling quality problems through improvement projects. Crosby (1996) suggested a 14-step programme for the implementation of TQM. He is known for changing perceptions of the cost of quality when he pointed out that the costs of poor quality far outweigh the cost of preventing poor quality, a view not traditionally accepted at the time. Attempting to summarise the main principles of TQM covered in these plans are the following three statements. Firstly the customer defines quality and thus their needs must be met. The organisation should consider quality both from the producer and customer point of view. Thus product design must take into consideration the production process in order that the design specification can be met. Thus it means viewing things from a customer perspective and requires that the implications for customers are considered at all stages in corporate decision making. Secondly quality is the responsibility of all employees in all parts of the organisation. In order to ensure the complete involvement of the whole organisation in quality issues TQM uses the concept of the internal customer and internal supplier. This recognises that everyone in the organisation consumes goods and services provided by other organisational members or internal suppliers. In turn every service provided by an organisational member will have a internal customer. The implication is that poor quality provided within an organisation will, if allowed to go unchecked along the chain of customer/supplier relationships, eventually lead to the external customer. Therefore it is essential that each internal customer’s needs are satisfied. This requires a definition for each internal customer about what constitutes an acceptable quality of service. It is a principle of TQM that the responsibility for quality should rest with the people undertaking the tasks which can either directly or indirectly affect the quality of customer service. This requires not only a commitment to avoid mistakes but actually a capability to improve the ways in which they undertake their jobs. This requires management to adopt an approach of empowerment with people provided with training and the decision making authority necessary in order that they can take responsibility for the work they are involved in and learn from their experiences. Finally a continuous process of improvement culture must be developed to instil a culture which recognises the importance of quality to performance.
	4.1.	The Cost of Quality All areas in the production system will incur costs as part of their TQM program. For example the marketing department will incur the cost of consumer research in trying to establish customer needs. Quality costs are categorised as either the cost of achieving good quality - the cost of quality assurance or the cost of poor-quality products - the cost of not conforming to specifications.
		4.1.1.	The Cost of Achieving Good Quality The costs of maintaining an effective quality management program can be categorised into prevention costs and appraisal costs. Prevention reflects the quality philosophy of “doing it right the first time” and includes those costs incurred in trying to prevent problems occurring in the first place. Examples of prevention costs include :
			-	The cost of designing products with quality control characteristics
			-	The cost of designing processes which conform to quality specifications
			-	The cost of the implementation of staff training programmes
			Appraisal costs are the costs associated with controlling quality through the use of measuring and testing products and processes to ensure that quality specifications are conformed to. Examples of appraisal costs include :
			-	The cost of testing and inspecting products
			-	The costs of maintaining testing equipment
			-	The time spent in gathering data for testing
			-	The time spent adjusting equipment to maintain quality
		4.1.2.	The Cost of Poor Quality This can be seen as the difference between what it actually costs to provide a good or service and what it would cost if there was no poor quality or failures. This can account for 70% to 90% of total quality costs and can be categorised into internal failure costs and external failure costs. Internal failure costs occur before the good is delivered to the customer. Examples of internal failure costs include :
			-	The scrap cost of poor quality parts that must be discarded
			-	The rework cost of fixing defective products
			-	The downtime cost of machine time lost due to fixing equipment or replacing defective product
			External failure costs occur after the customer has received the product and primarily relate to customer service. Examples of external failure costs include:
			-	The cost of responding to customer complaints
			-	The cost of handling and replacing poor-quality products
			-	The litigation cost resulting from product liability
			-	The lost sales incurred because of customer goodwill affecting future business

4.2.	Quality Systems   ISO 9000 provides a standard quality standard between suppliers and a customer that helps to reduce the complexity of managing a number of different quality standards when a customer has many suppliers. ISO 9000 is a series of standards for quality management and assurance and has five major subsections as follows :
	-	ISO 9000	provides guidelines for the use of the following four standards in the series
	-	ISO 9001	applies when the supplier is responsible for the development, design, production, installation, and servicing of the product.
	-	ISO 9002	applies when the supplier is responsible for production and installation
	-	ISO 9003	applies to final inspection and testing of products.
	-	ISO 9004	provides guidelines for managers of organisations to help them to develop their quality systems. It gives suggestions to help organisations meet the requirements of the previous four standards.
	The standard is general enough to apply to almost any good or service, but it is the specific organisation or facility that is registered or certified to the standard. To achieve certification a facility must document its procedures for every element in the standard. These procedures are then audited by a third party periodically. The system thus ensures that the organisation is following a documented, and thus consistent, procedure which makes errors easier to find and correct. However the system does not improve quality in itself and has been criticised for incurring cost in maintaining documentation while not providing guidance in quality improvement techniques such as statistical process control.