Total Quality Management (TQM) – A Practicable Philosophy

T, Q and M: three letters that in combination result in a long history, a deep meaning and great relevance in the present and the future. Read here about the philosophy behind the term “Total Quality Management”, what a practicable version of it looks like and what incentive there is to successfully anchor TQM in the company.

Total Quality Management, or TQM for short, basically means comprehensive quality management. TQM can be understood as a management strategy that involves the entire company and all employees. It supports companies in setting and meeting quality targets derived from customer requirements.

But why is it advisable to focus on the creation of quality with such a method? Quite simply, quality is not a stable quantity. In order to create quality, the company must be aware of what the customer benefit is and will be in the future. To ensure this, the quality objective must be a continuous management focus. The achievement of quality goals leads to market success. Through TQM, the company’s success should ultimately also be increased through higher productivity, lower defective performance costs and lower costs in general.

Total

Comprehensive view of quality that includes all business units, the customer base and the entire supply network without exception

Quality

Product quality, which results from the quality of processes, valuable materials, equipment and the work performed

Management

Quality as a management task that brings about a corresponding corporate policy and goals aligned with it

When we speak of a management strategy, we expect a model that tells us how to proceed. But that is not exactly what Total Quality Management is on its own. Rather, it is a kind of philosophy. Any philosophy stands or falls with those who believe in it and let it resonate in their approach to certain issues. That someone, in terms of TQM, was W. Edwards Deming, whose history and basic ideas we have already addressed in one of our blog articles. Between 1940 and 1980, he worked out principles that first took hold in Japan, then in America and finally in Europe – his thoughts are the basis for today’s Total Quality Management.

According to the American Society for Quality, the TQM we speak of today consists of eight basic building blocks:

1. Customer focus
   Customer satisfaction is elementary and determines the success of the TQM strategy.
2. Employee involvement
   TQM involves all areas of the company, so that each employee participates in the continuous optimization.
3. Process focus
   Process thinking plays an important role in TQM: strategies are developed based on feedback from internal and external customers.
4. Integration
   TQM looks at all the small processes within a company and ensures that they are in line with the company’s overall strategy.
5. Strategic and systemic approach
   In order to integrate quality in the sense of TQM as a core component of the company’s success, a strategic plan must be drawn up accordingly.
6. Continuous optimization
   Processes should never be considered complete, but should be subject to ongoing optimization.
7. Decision-making based on facts
   The TQM strategy should be based on data and facts in order to make effective decisions.
8. Communication
   To some extent, TQM is always associated with change, which is why sustained communication is critical to success.

One model based on the fundamental idea of Total Quality Management is the EFQM Model for Business Excellence developed in 1988 by the European Foundation for Quality Management (EFQM), a foundation of well-known European industrial companies. The currently valid version of this is from November 2019.

The EFQM model is a tool to drive the establishment and further development of a comprehensive management system. It helps companies to identify their own strengths, weaknesses and potential for improvement. For individual hurdles in the different phases of change, it offers solution options and orientation. In this way, progress is made and the company’s performance is improved. The goal of the model is to align companies in an agile manner in accordance with the TQM concept. Developed in collaboration with change management experts, executives, various organizations and academia, it can now be easily used by companies of any size and in any industry.

The EFQM model describes the way to establish the idea of Total Quality Management as a philosophy for the company management. The entire company must then be aligned with this philosophy – which results in a change. And this is a cultural change that can be quite difficult for employees. Because, as we know, people are creatures of habit. In other words, the TQM philosophy becomes more practical in the form of a concrete model, but the change still represents a major challenge.

The EFQM model accompanies this change and divides it into the three main criteria of alignment, realization and results. These are each assigned individual sub-criteria which are taken into account in the course of the change. Further information on the EFQM model can be found on the EFQM website.

In order to focus more on quality as a competitive factor, various prizes are now awarded for quality management systems. In addition to the Deming Application Prize, which has been awarded in Japan since 1951, and the Malcom Baldrige National Award, which was introduced in America in 1987, Europe is also involved with the European Excellence Award. This is intended to promote the idea of quality in Europe and has been awarded by the European Foundation for Quality Management since 1992. The award is presented in various categories depending on the size of the company.

German organizations and companies have another opportunity at the national level: the Ludwig Erhard Prize, awarded since 1997 by the Initiative Ludwig Erhard Preis e.V. (ILEP) is considered the oldest German Excellence Award. After an intensive evaluation process based on the EFQM’s “Levels of Excellence,” it is awarded to organizations that stand out for their holistic management system and the sustainable success of their business activities.