Customer satisfaction is often seen as “intangible,” which makes it difficult to pin down, measure, and ultimately achieve. What exactly drives customer satisfaction, and consequently, what makes successful products? This question in the 1970s and 1980s gave rise to total quality management or TQM.
Defining Total Quality Management (TQM)
Total quality management (TQM) is the ongoing process of identifying and minimizing or eliminating faults in production, optimizing supply chain management, enhancing customer experience, and guaranteeing well-trained staff. As per the definition of TQM, the customer’s requirements determine what quality is.
In the late 1970s and 1980s, the developed economies of Western Europe and North America struggled economically, struggling against Japan’s capacity to create high-quality products at affordable prices. Companies began re-examining the quality control approaches developed over 50 years and how the Japanese had effectively implemented them. This was the environment in which TQM came to the fore.
Literature across the period discusses total quality management in multiple ways. Some seminal works referring to the concept include Total Quality Control by American businessman Armand V. Feigenbaum and What Is Total Quality Control? The Japanese Way by Japanese organizational theorist Kaoru Ishikawa. Today, it is primarily adopted by industrial companies, but its principles and approaches can inform a company’s overall culture – with a special focus on customer centricity.
The Core TQM Principles that Drive Total Quality Management
While CX professionals may disagree on the specific meaning of TQM (for some, it refers to a low defect rate, but for others, it’s verified by satisfied customers), there are eight guiding principles for total quality management.
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Customer Focus
Every company pursues a single objective: customer delight by creating high-quality products and services. Consequently, customer focus is the first principle of TQM. It implies that the final product must satisfy the requirements and needs of the customer.
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Employee Accountability
When adopting TQM, organizations must foster an empowering environment for their workforce. Along with the leadership, they become accountable for evaluating the quality of products and services in their different positions. In this situation, organizational communication is crucial in increasing employee morale.
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Connected Systems
An organization must have an integrated system to adopt a TQM strategy throughout its business activities. Consequently, implementing quality standards such as ISO 9000 standardization can aid in producing high-quality products and services. This will likely also result in meeting or surpassing customer expectations.
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Process-First Model
A product or service enters the market after undergoing many stages. This implies that it is monitored and evaluated at every step of the manufacturing and not just at the completion phase. Effective TQM is demonstrated by process-oriented thinking.
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Systematic Flow
TQM is all about preparing strategically to attain quality excellence and business targets. Consequently, establishing a systematic flow would guarantee that the products and services are passed through each phase of the quality manufacturing process.
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Continuous Improvement
Continuous quality improvement should be the gold standard. Once a task is completed, leaving it unattended will only lead to a progressive decline in manufacturing standards. For the TQM strategy to be successful, individuals at all levels must be vigilant and conduct frequent quality checks.
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Data-Driven Decisions
Because every employee participates in quality assessment procedures, the company must make judgments based on evidence and objectivity. Analyzing company performance utilizing performance data and customer indicators, such as sales, profit, and customer retention may lead to better future decisions.
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Communication and Collaboration
A genuine partnership between stakeholders like customers and workers ensures appropriate quality control processes and candid, continuous feedback. With TQM, companies may develop an effective dialogue with all stakeholders and adjust as necessary, focused on achieving desired outcomes.
Benefits of Implementing TQM
By implementing TQM, businesses may:
- Boost Customer Satisfaction – Customers are more satisfied when they receive quality products that fulfill their expectations. In turn, high customer satisfaction may lead to a rise in market dominance, revenue growth via upselling, and customer-led word-of-mouth marketing.
- Reduce Product Defects – One of the tenets of TQM is that companies should produce products and services correctly the first time. This reduces product recalls, customer service costs, and product repairs.
- Strengthen Culture – TQM-compliant organizations develop and foster several fundamental values centered on quality management and continual improvement. The TQM philosophy permeates all elements of a business, including employment, internal operations, and brand development.
- Manage Costs – Companies save on customer assistance, product replacements, field service, and the design of product fixes as a result of decreased production defects. The cost savings are transferred to the bottom line, resulting in increased profit margins.
Sectors Using Total Quality Management
TQM originated in the manufacturing industry, but companies may apply its principles to various sectors. It provides a unified vision for systemic transformation by focusing on long-term rather than short-term objectives. TQM is used in several areas, including, but not restricted to, the industrial, finance and banking, and medical fields. These strategies apply to all divisions within a single organization.
The car company Toyota is a great illustration of TQM. The company’s implementation of TQM and kaizen increased productivity and work delivery efficiency at all organizational levels. The “Toyota Group Executive TQM Training Course” was launched in 1994 to provide incoming executives with training in total quality management. Tata Steel, an Indian steel manufacturing giant, implemented TQM in the 1980s as well.
An effective TQM deployment requires extensive training for all the employees of an organization. With the proper training and tools that provide accurate data to bring about continuous improvement, companies can achieve quality levels geared to earn high customer satisfaction rates.
