Total quality management is the introduction of quality in all activities in an organization and it is done by the entire organization. This is done through small continuous improvements on a daily basis. It has a target of a zero percent defect rate. This was created because the environment that businesses worked in got so competitive that people though the only way to achieve success was to introduce high quality products.
It improves the business
By introducing total quality you can improve business cash flow. When this improves it means that their liquidity is increasing and it can pay off its debts better. It will also mean that businesses can reinvest and then provide more profit to their shareholders or they can pay for their future expenses and provide them with safety.
This can also reduce overhead costs. These are costs that are seen on the income statement except for some direct costs such as expenses, labor and materials. This type of expenditure cannot be identified with any particular cost unit.
The way total quality management is incorporated into the business
Total quality management is incorporated into the business by using quality groups. These are groups of six to twelve employees who are assigned to improve the quality of their own work. They meet frequently and discuss things that influence the quality of their work and how to solve problems. The idea of using quality groups is to make sure that the workers themselves identify ways to improve quality in the tasks that they perform.
Empowerment of employees is very crucial to the success of this type of management. Manages should encourage employees to talk to customers and to suppliers so that employees will learn how to cater to their needs.
Benchmarking is another important step in this process. Managers compare the current products, services and practices of a business and compares it a competitors standards to make sure that the standards are better or at least equal to their competitors.
This means that managers only compare the practices, services and products that they think or worth copying from their competitors. Ideally a company wants to be the benchmark that other companies compare themselves to.
Techniques of total quality management
International quality standards are a very common technique used. This refers to guidelines of business processes that are used internationally. It acts as a framework for business processes and if they are followed then businesses will meet customer requirements. This means their quality will be of international standards so more people will by their products.