Total Quality Management and Business Results

The issues addressed by the total quality management

In the context of the modern business environment, the majority of the companies need to know how to deal with the rapid changes both on the inside and on the outside of the firms. The changes can concern some new competitors in the marketplace or unexpected societal changes. The issues on the inside of the company can also be completely different, but the common ground of such changes is the necessity for the company’s management to be able to reorganize the working process. Total quality management is one of the means of dealing with the rapid and unexpected changes in the business environment (Anjard 239).

The total quality management can address several issues on the different levels of the corporate structure. First of all, even though the competition between different companies can take different forms and directions, the main aspect of it is the quality of their products and services. It is also important to point out that various companies are trying to maintain different levels of quality that is acceptable for their target markets, but the main objective for any business, in the modern context, is to make the quality consistent.

That is the main aim of implementation of the total quality management. Quality programs are nowadays common for any business in any sphere. One of the main issues of the large productions in the competitive markets is the level of responsibility and integrity within the company (Black 160). Introducing different quality programs to the productions, distribution and other stages of goods manufacturing help the employees realize their responsibilities and the significance of the quality of their performance.

Total quality management also addresses the issue of communication in the workplace (Yusof and Aspinwall 291). The approach based on the significance of the job of each employee helps to ensure the more horizontal system of communication (Dale 30). In other words, the objective is to make sure that the people from the different departments of the company and different stages of the production treat each other not as strangers. It ensures that the feedback in the company is continuous between not only the management but also the employees themselves. The service-based approach in workplace communication helps to make it more efficient and allows the employees to feel more integrated.

Main idea and key points

Total quality management comprises the entire managerial philosophy. The main aspect of it is to focus the attention on the individual elements and to nurture every single part of the business process to create a high-quality whole rather than start from the top of the hierarchy (Boaden 153). This principle idea of the total quality management formed the key concepts and basic steps of its practical implementation.

The first key point is the fact that the standard of quality depends on the target market or, in other words, on the customer’s demand. The feedback from the customer is the priority in production, and the improvement of the quality to meet the customer’s expectation is the direct responsibility of the executives. The third point is the fact that the best way to improve the quality standards is to analyze each part of the production stages to find out the precise areas that need improvement. Finally, the optimal way of defining the problematic areas of the production process is to receive feedback from the employees who are involved in it (Anjard 241).

If the communication in the workplace is based on shared responsibility and employees are interested in improving the quality of the products, the process of meeting the customer’s demand is much more efficient.

Summary of the impact of total quality management on business results

When total quality management was applied in the corporation SGS-Thomson, the company that produces different microelectronics, it adopted all the advantages of the holistic approach. The production process was perceived as the whole, and the key to developing it and achieving business results was to improve every single component of it. With each employee and each manager understanding the role of their work in a bigger perspective, it became possible to interest them in improving the quality. The continuous feedback meant that the opinion of each worker mattered. It led to the empowerment amongst the employees and the growth of commitment among the managers since they could relate more to the whole process when they have feedback on each of the stages of production.

In the case of SGS-Thomson, it is also important to point out the fact that the financial aspect of the implementation of total quality management was more than rewarding. The company secured its position among the most powerful semiconductors manufacturers. The net earnings and losses were stabilized, and revenues reached the number of more than $3,5 million allowing the company to enter the international market in a very strong position (Duffin and Pellegrini 166). Moreover, the integrated approach enabled the company to cope with the dangers of downsizing. The concept of employee involvement became an update on the integrative nature of total quality management.

Summary of the graphs

Overall, several factors enabled SGS-Thomson to achieve high performance and business results. The strong position in the marketplace and the successful R&D investments helped the company to find the resources to increase the market share. In particular, the served available market index grew from 3,4 in 1990 to 4,1 in 1994 (Duffin and Pellegrini 169). Another important factor that affected the business results was the correlation between expenses and sales.

The ratio of expenses to the percentage of sales was especially calculated for the situation if the company was not using total quality management. The actual ratio of those two variables was compared to the specially calculated one. The latter was circa 5% higher, which means that the expenses without the total quality management would be higher (Duffin and Pellegrini 172). On the opposite side, the statistics of the manufacturing yield suggests that total quality management helped the company to improve for more than 10% on the global market (Duffin and Pellegrini 173). The inventory turns, when using total quality management, are also bigger, which leads to an increase in the cash flow.

Recommendations

Total quality management is a holistic and integrated approach. This aspect has many advantages in terms of the business results, including the opportunities to reduce the company’s expenses, cope with the dangers of downsizing, and most importantly, install the consistent quality of the product. Nevertheless, the approach is sometimes deemed inefficient. The reason for it is that holistic nature makes it less flexible. Therefore, the main recommendation for using total quality management is the consistency and accuracy of the managerial actions. The most challenging part of this strategy is the implementation and maintenance that require the deep commitment of the executives.

Works Cited

Anjard, Ronald. “Total Quality Management: Key Concepts.” Work Study 47.7 (1998): 238-247. Print.

Black, Sam. “An Empirical Model for Total Quality Management.” Total Quality Management 6.2 (1995): 149-164. Print.

Boaden, Ruth. “What is Total Quality Management… And does it Matter?”Total Quality Management 8.4 (1997): 153-171. Print.

Dale, Barrie. Total Quality Management. London, United Kingdom: John Wiley & Sons, 1999. Print.

Duffin Murray, and George Pellegrini. “SGS-Thomson – the Impact of TQMon business results. “Successful TQM: Inside Stories from European Quality Award Winners. Ed. Klaus Zink. London, United Kingdom: John Wiley & Sons, 1997. Print.

Yusof, Shari Mohd, and Elaine Aspinwall. “Total Quality Management Implementation Frameworks: Comparison and Review.” Total Quality Management 11.3 (2000): 281-294. Print.