Total quality management – for excellent companies

Definition: what is total quality management?

Behind TQM are principles that particularly support SMEs in the continuous improvement of the quality of their own performance and products. Across all business areas. Another benefit: the methods work regardless of the sector or size of the company. However, it is particularly important that as many people as possible in the company play their part. Therefore, the company management should set a good example.

The American physicist and statistician William Edwards Deming came up with this holistic quality management concept in the 1940s, but it was initially Japan, rather than the USA, where total quality management became very popular. There, manufacturing companies quickly understood how to deliver the best possible output with continuous checks at all levels. The aim was maximum customer satisfaction – and thus a secured leading market position. ‘Made in Japan’ soon became a seal of approval for the highest quality, even outside of automotive manufacturing.

Today, total quality management is considered the most far-reaching approach when it comes to corporate excellence. In this context, each letter of TQM stands for content important for improvement.

How does total quality management differ from quality management?

A direct comparison of the key features makes clear to what extent the principles of total quality overlap with classical quality management (CQM):

1. Dealing with errors

TQM: Errors are caused by processes.

CQM: Errors are caused by people.

2. Taking on responsibility

TQM: All employees bear responsibility, including for errors.

CQM: Only individual employees are responsible.

3. Aim/philosophy

TQM: The declared aim is to make no mistakes.

CQM: Making no mistakes is impossible.

4. Partners/suppliers

TQM: Only selected suppliers are partners.

CQM: Partnership with any, and any number of, suppliers.

5. Quality promise

TQM: Quality is oriented towards the customer expectations.

CQM: The customers have to take the quality the company supplies.

 

Infographic total quality management

Total quality management in Europe

Following the global success of high-quality, economical products ‘made in Japan’, the European economy also became aware of total quality management in the 1980s. As many as 14 well-known companies, including Bosch and Philips, founded the European Foundation for Quality Management (EFQM). The foundation used Deming’s approach as the basis for its own European model. In 1991 the EFQM Global Excellence Award was established.

Since then, the implementation of total quality management has allowed European companies to maintain a holistic overview of their organisations, too. Companies use TQM as a tool to determine their own strengths and potential for improvement, to convert that into specific measures and to further improve their business success.

The EFQM concept, revised in 2010, now also defines eight basic quality principles:

1. Principle: Achieve balanced results

Organisations with the highest standards for the quality of their work complete their tasks in such a way that they satisfy both the long-term and short-term needs of their stakeholders.

2. Principle: Increase customer benefits

Top companies are always there for their customers. They work on value creation by understanding the expectations and requirements on the market and anticipating them as far as possible.

3. Principle: Lead with vision, inspiration and integrity

Excellent companies have managers who actively shape the future and are role models in terms of values and ethics.

4. Principle: Steer with the help of processes

The management of companies that excel implement structured and strategically oriented processes. Decisions are based on facts and the focus is on long-term success and lasting and balanced results. This way it is possible to implement organisational

5. Principle: Be successful through people

Exemplary organisations pay attention to their employees and create a culture of responsibility. In this way, personal and organisational aims can be achieved in an integrated way.

6. Principle: Promote innovation and creativity

Excellent companies increase value creation and performance through continuous improvement and systematic renovation. To this end, they make use of the creativity of their stakeholders.

7. Principle: Build partnerships

Trusting relationships with various partners need to be developed and maintained. They are the basis for mutual success. Potential partners are customers, suppliers and educational institutes, as well as NGOs and society.

8. Principle: Take on responsibility for a sustainable future

Anyone who is serious about these matters integrates an ethical attitude, clear values and the highest standards of conduct into their own corporate culture. The emphasis lies on economic, social and ecological sustainability.

Four steps to your own TQM

Now for the practical implementation. Fundamentally, the concept can be implemented by any company, although small and medium-sized enterprises have a proven advantage. This has been demonstrated by studies in Switzerland. However, the same basic rule applies to everyone: take your time. While large organisations should expect a development period of more than six years, the transition in smaller companies can also take several years. You should always follow the four steps below when introducing your TQM:

Step 1: Project preparation

Prepare carefully. Determine framework conditions to define the scope and workflow of the project. The first intermediate aims are a clearly demarcated area of investigation and guidelines for further steps.

Step 2: The status quo analysis

Find your weak points. Analyse with the focus on organisational, management and controlling systems. Also check market, employee and, of course, customer requirements.

Step 3: Create the TQM concept

Interdisciplinary workshops with your employees will help you with the development. The end result is company-specific recommended actions, initial subprojects and a detailed target concept.

Step 4: Implementation of the TQM concept

To ensure your implementation is successful in the long term, you should pay attention to continued application of the measures through quality management. Institutionalised project controlling will help you in this.

What challenges do you need to be aware of and what opportunities for success are there?

A project like the introduction of total quality management that takes up so much time and is so wide-ranging is sure to cause major challenges for a company.

• Some of the changes go all the way into the corporate culture.
• In fast-moving times, when everyone seems to rely on agility and flexibility, it can be difficult to try and firmly anchor quality in particular in the company philosophy.
• Problems can also be caused by errors in preparation, such as excessive targets or a lack of commitment from the company management.
• Once again: if you expect quick success, you are sure to soon be disappointed – TQM is a long-term process.

But your patience may pay off: long-term studies in the USA have proven the success of the TQM ‘excellence model’. Sales and profits have been shown to increase, as has productivity. In companies listed on the stock market, share performance has also improved. At the same time, jobs have also been secured or job numbers have increased further, because success strengthens the employer brand, too – so, all in all, ideal future prospects.