Contemporary Issues of Management Accounting

Topics: Management, Total quality management, Balanced scorecard Pages: 14 (3915 words) Published: July 3, 2011
I. Total Quality Management(TQM)

* Definition:
TQM is a set of management practices throughout the organization, geared to ensure the organization consistently meets or exceeds customer requirements. TQM places strong focus on process measurement and controls as means of continuous improvement. TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is involved with the creation or consumption of the products or services offered by an organization. In other words, TQM capitalizes on the involvement of management, workforce, suppliers, and even customers, in order to meet or exceed customer expectations. Considering the practices of TQM as discussed in six empirical studies, Cua, McKone, and Schroeder (2001) identified the nine common TQM practices as cross-functional product design, process management, supplier quality management, customer involvement, information and feedback, committed leadership, strategic planning, cross-functional training, and employee involvement. Figure 1: Model of TQM

Some useful messages from results of TQM implementations:
* If you want to be a first-rate company, don't focus on the second-rate companies who can't handle TQM, look at the world-class companies that have adopted it * The most effective way to spend TQM introduction funds is by training top management, people involved in new product development, and people involved with customers * It's much easier to introduce EDM/PDM in a company with a TQM culture than in one without TQM. People in companies that have implemented TQM are more likely to have the basic understanding necessary for implementing EDM/PDM. For example, they are more likely to view EDM/PDM as an information and workflow management system supporting the entire product life cycle then as a departmental solution for the management of CAD data.

Figure 2: The wheel of TQM runs this way

* Principles of TQM
TQM can be defined as the management of initiatives and procedures that are aimed at achieving the delivery of quality products and services. A number of key principles can be identified in defining TQM, including: * Executive Management – Top management should act as the main driver for TQM and create an environment that ensures its success. * Training – Employees should receive regular training on the methods and concepts of quality. * Customer Focus – Improvements in quality should improve customer satisfaction. * Decision Making – Quality decisions should be made based on measurements. * Methodology and Tools – Use of appropriate methodology and tools ensures that non-conformances are identified, measured and responded to consistently. * Continuous Improvement – Companies should continuously work towards improving manufacturing and quality procedures. * Company Culture – The culture of the company should aim at developing employees ability to work together to improve quality. * Employee Involvement – Employees should be encouraged to be pro-active in identifying and addressing quality related problems.

By these we can figure out the TQM through this way

Figure 3: Factors of TQM
* Important aspects of TQM:

* TQM leadership from top management: TQM is a way of life for a company. It has to be introduced and led by top management. This is a key point. Attempts to implement TQM often fail because top management doesn't lead and get committed - instead it delegates and pays lip service.

* Continuous improvement: Continuous improvement of all operations and activities is at the heart of TQM. Once it is recognized that customer satisfaction can only be obtained by providing a high-quality product, continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction.

* Fast response: To achieve customer satisfaction, the company has to respond rapidly to customer needs....
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