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Total Quality Management (TQM): A Complete Overview and Practical Implementation
Business Essentials · Chapter 7: Organizational Design and BehaviorSection 7.5 · lesson 40 of 10514 min · free with a free account
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In this lesson
A complete overview and practical implementation: improve the system, don't blame the people.
- State the principles of Total Quality Management
- Describe the quality pioneers and the core quality tools
- Distinguish common cause from special cause variation
- Explain how TQM is implemented, and why it fails
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Organizational Design and Behavior
Total Quality Management (TQM)
When a defect appears, the natural question is, who did this? Total Quality Management asks a different question first. What in the process allowed it? This section treats TQM as a philosophy, not a toolkit. We'll set out its eight principles, and what each one asks of a manager. We'll meet the pioneers, and their most important idea, the difference between common and special cause variation. Then the cost of quality, the plan-do-check-act cycle, and the core tools. And we'll see why so many implementations fail, and finish with a machine that never seems to settle. Along the way, notice how often the fix is to change the system, not the person.
TQM as a Philosophy
A Way of Running the Organization
Start with quality itself. Quality is how far a product or service meets or exceeds what customers require and expect. It's judged by the customer, not only by the producer's specification. Total Quality Management is a management philosophy. It commits the whole organization to continually improving its products, services, and processes. It does that by focusing on customers, and by involving every employee. The word philosophy is chosen deliberately. TQM uses tools, but it isn't a toolkit you can install. And it isn't a program with a start and a finish. It's a way of deciding how the organization is run. That has a direct consequence. It can't be delegated to a quality department. A quality department can teach methods, gather data, and audit results. But quality is decided by the people who operate a process, and the managers who design and resource it. Make quality a specialist unit's job, and everyone else is relieved of it.
The Principles, 1 to 3
Customers, Everyone, and the Process
TQM is usually described by eight principles. The first is customer focus. The customer's requirements define quality. So a manager must find out what customers actually want, through surveys, complaint analysis, and direct contact. The internal customer concept extends this. The next person in a workflow is the customer of the one before. A billing clerk who gets an incomplete order form is the internal customer of the order-entry clerk. That makes handoffs visible. But units can perfect their service to one another, while the actual buyer is neglected. The second principle is total employee involvement. Everyone improves quality, because those who do the work know it best. That means giving people the authority, training, and time to act on what they see. The third is process orientation. Results are produced by processes, linked activities that turn inputs into outputs. This is the philosophical core of TQM. It shifts the response to a defect from blaming individuals to examining systems. It isn't a refusal to hold anyone accountable. It reflects an observation. A well-designed process gets good results from ordinary people. A poor one gets defects from excellent people.
The Principles, 4 to 8
What Each Asks of a Manager
The other five principles follow. An integrated system means units are linked and managed as a whole, since improving one part can harm another. When it's missing, units meet their own targets while the whole organization suffers. A strategic and systematic approach builds quality into strategy, using planned methods. Without it, quality drives appear as one-off campaigns that fade. Continual improvement means no process is ever finished. Without it, effort stops once a target is met. Fact-based decision making rests decisions on data, rather than impression or seniority. So a manager asks what the evidence is, and invests in collecting it. Communication means information about goals, results, and problems flows in every direction. When it's absent, customers discover problems first, and bad news is delayed. Here's the practical point. An organization can claim all eight principles while lacking most of them. So look for the signs of absence. They're a more reliable test than the claims.
The Quality Pioneers
4 Pioneers, 1 Key Distinction
Several people shaped these ideas. Walter Shewhart, an American engineer and statistician in the nineteen twenties, developed the control chart. W. Edwards Deming, an American statistician, taught statistical quality methods in Japan after the Second World War. He argued that most performance problems originate in the system, which management controls, not in the worker. Joseph Juran framed quality management as three linked activities, and is associated with the Pareto principle. Kaoru Ishikawa popularized the cause-and-effect diagram, and quality control involving workers at every level. The most important idea comes from the statistical tradition. Common cause variation is inherent in a process. Many small influences mean no two outputs are exactly alike. Nothing has gone wrong. And it can only be reduced by changing the process itself, which is management's task. Special cause variation comes from an identifiable source outside the normal process. A machine fault, a defective batch of material, or a new untrained operator. Here something has changed. So the cause should be found, and eliminated.
Figure 7.5.1
Reading a Control Chart
A control chart makes that distinction visible. The values here are illustrative. Measurements are plotted in order, around a center line. The limits sit three standard deviations from the center, by the usual convention. Almost all the points scatter between the limits. That's common cause variation. It calls for improving the system, not reacting to each point. One point, sample eighteen, lies outside. That justifies a search for a specific cause. Now the warning the literature states plainly. Responding to common cause variation as if it were special makes performance worse. Each adjustment to a normal result adds a new disturbance on top of the existing one. Say a supervisor reprimands an operator whenever this hour's output is lower than last hour's. That adds variation. So is one who resets a machine after every reading slightly off target. A well-known illustration, the funnel experiment, shows that adjusting a stable process after each result widens the spread.
Juran and the Cost of Quality
Prevention Is Cheapest
Juran contributed the quality trilogy. Quality planning designs processes that can meet customer needs. Quality control keeps performance at the planned level. Quality improvement deliberately reaches new, better levels. Another contribution is the cost of quality framework, associated with writers such as Armand Feigenbaum and Juran. It sorts quality costs into four categories. Take a fictional bakery, Pellam Bakery. Prevention costs stop defects occurring. Training bakers to follow standard recipes is prevention. Appraisal costs detect defects, like inspecting each batch. Internal failure costs come from defects found before the customer. Throwing out a spoiled batch. External failure costs come from defects the customer finds. Refunding a customer who got stale bread. The claim is that prevention is cheapest. A dollar spent on prevention cuts appraisal and failure costs by more than a dollar. External failure is the most expensive, because it damages the relationship as well as costing the repair. But this is a general argument, not a guarantee. Whether it holds for a process is a question for the organization's own data.
The Improvement Cycle
Plan, Do, Check, Act
The plan-do-check-act cycle is a four-step method for improving a process, by testing a change on a small scale. In plan, the team identifies a problem, analyzes it, and designs a change. In do, it carries out the change on a small trial basis. In check, it compares the actual results with what was expected. In act, it adopts the change if it worked, adjusts it if it partly worked, or abandons it. Then the cycle begins again. It's associated with Shewhart and was popularized by Deming. A common variant replaces check with study. Its central discipline is prediction. At the planning step, the team writes down what it expects the change to accomplish. Without that record, checking becomes interpretation after the fact. And almost any result can be called a success. Recording the prediction is what makes the cycle a test, and not a formality.
The Core Quality Tools
Each Tool Answers a Question
The core tools are best understood by the question each one answers. A check sheet is a structured form for collecting data where it arises. How often does each problem occur? Pareto analysis ranks problems by frequency or cost, because a few causes often produce most of the effect. It answers, which few problems deserve attention first? A run chart plots a measurement in time order, and shows the pattern over time. A cause-and-effect diagram, also called a fishbone, arranges possible causes by category. What might be producing the problem? A control chart plots measurements against limits computed from the process's own behavior. It answers whether the variation is common cause or special cause. A prioritization matrix scores options against agreed criteria, to decide which to take on first. The tools are used in sequence more often than alone. A check sheet gathers the data, Pareto picks the leading problem, and a fishbone explores its causes. Then a control chart shows whether the fix held.
Culture and Certification
Small Steps, Safe Voices, and What a Certificate Proves
Continuous improvement means many small improvements, made steadily, by the people who do the work. It replaces reliance on occasional large changes designed by specialists. The people closest to a process see its problems first, and small changes are cheap to test and easy to reverse. But it depends on psychological safety. That's a shared belief that you can speak up with questions, ideas, or mistakes without being punished or humiliated. Without it, employees won't report the errors and near-misses that improvement feeds on. An organization that welcomes problem reports, but reprimands the person who brings one, has a familiar gap. In the terms of section seven point four, its espoused value is contradicted by its actual culture. Finally, certification. Quality management standards describe how an organization documents, controls, and reviews its processes. Certification is an independent audit confirming that the system meets such a standard. It shows a documented system that is actually followed. It doesn't show that products are excellent, or customers delighted. An organization could follow its process reliably, and still make a mediocre product.
Implementation
4 Supports, 4 Failure Modes
Successful implementation rests on four supports. Leadership commitment means senior managers visibly own the effort, join reviews, and give it time and money. Training gives employees the methods, including the statistical thinking to tell common from special cause. Measurement sets a baseline and tracks results, so claims of improvement can be tested. And a sustaining structure, teams, reviews, and recognition, keeps the effort going after early enthusiasm. Implementations fail in identifiable ways. First, delegation. Leadership hands the program to a quality unit, and line managers conclude quality is someone else's job. Second, no measurement. No one can say whether anything improved, so the effort loses credibility. Third, nothing changes in what's rewarded. If bonuses still depend on volume and speed, people follow the bonuses. Fourth, reversion under deadline pressure. The routines are dropped to ship the product. That teaches everyone that quality is a fair-weather commitment. All four share a root. The philosophy was treated as a toolkit or a program, and the actual management didn't change.
Case Vignette (Composite)
The Adjusted Filler
Here's a composite case, with a fictional company and person. Rosa is a production supervisor at Aldous Packaging, overseeing a machine that fills jars to a target weight. Fill weights vary slightly from jar to jar. Whenever a jar comes out noticeably above or below target, Rosa has the operator adjust the machine. Over several weeks, the spread widens. Customers complain about underfilled jars, and operators are frustrated. She could keep adjusting, which looks responsive. She could tighten the tolerance and inspect more, which raises appraisal costs. Or she could stop adjusting on individual results, chart the weights, and study the process. A customer is watching the complaints. So the trade-off is between appearing to act, and actually reducing variation. The jar-to-jar differences are mostly the machine's normal behavior. So every adjustment adds a new disturbance. The sound decision is to stop reacting, plot a control chart, and remove any special cause it reveals. If the spread is still too wide, change the process, its equipment or material handling. Only a system change reduces common cause variation.
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