Total quality management may be defined as “managing the entire organization so that it excels on all dimensions of products and services that area important to the customer.” It has two fundamental operational goals, namely 1. Careful design of the product of service.
2. Ensuring that the organization’s systems can consistently produce the design. These two goals can only be achieved if the entire organization is oriented toward them – hence the term total quality management. TQM became a national concern in the United States in the 1980s primarily as a response to Japanese quality superiority in manufacturing automobiles and other durable goods such as room air conditioners. A widely cited study of Japanese and US air-conditioning manufacturers showed that the best quality American products had higher average defect rates than those of the poorest Japanese manufacturers. So severe was the quality shortfall in the United States that improving it throughout industry became a national priority, with the Department of Commerce establishing the Malcolm Baldridge National Quality Award in 1987 to help companies review and structure their quality programs. Also gaining major attention at this time was the requirement that suppliers demonstrate that they are measuring and documenting their quality practices, according to specified criteria, called ISO standards, if they wish to compete for international contracts.
The philosophical leaders of the quality movement, notably Philip Crosby, W. Edwards Deming.and Joseph M. Juran – the so-called Quality Gurus – had slightly different definitions of what quality is and how to achieve it but they all had the same general message. To achieve out-standing quality requires quality leadership from senior management, a customer focus, total involvement of the workforce, and continuous improvement based upon rigorous analysis of processes. WE will now turn to some fundamental concepts that underlie any quality effort: quality specifications and quality costs.
QUALITY SPECIFICATION AND QUALITY COSTS
Fundamental to any quality program is the determination of quality specifications and the costs of achieving (or not achieving) those specifications.
Developing Quality Specifications
The quality specifications of a product or service derive from decisions and actions made relative to the quality of its design and the quality of its conformance to that design.
Design quality refers to the inherent value of the product in the market place and is thus a strategic decision for the firm. The dimensions of quality are listed below. These dimensions refer to features of the product or service that relate directly to design issues. A firm designs a product or service to address the need of a particular market.
A firm designs a product or service with certain performance characteristics and features based on what the intended market expects. Materials and manufacturing process attributes can greatly impact the reliability and durability of a product. Here the company attempts to design a product or service that can be produced or delivered at reasonable cost. The serviceability of the product may have a great impact on the cost of the product or service to the customer after the initial purchase is made. It also may impact the warranty and repair cost to the firm. Aesthetics may greatly impact the desirability of the product or service, in particular consumer products. Especially when a brand name is involved, the design often represents the next generation of an ongoing stream of products or services. Consistency in the relative performance of the product compared to the state of the art, for example, may have a great impact on how the quality of the product is perceived. This may be very important to the long run success of the product or service.
The quality Gurus Compared,