TOTAL QUALITY MANAGEMENT (TQM)

COST OF QUALITY

WHAT IS QUALITY

according to Merriam Webster :

  • how good or bad something is
  • a characteristic or feature that someone or something has, something that can be noticed as a part of a person or thing
  • a high level of value or excellence

WHAT IS QUALITY

Meeting and exceeding the expectation of users. 

QUALITY IN 

SERVICES

QUALITY IN 

MANUFACTURING

DIFFERENT : QUALITY IN SERVICES & MANUFACTURING

  1. Intangibles.
  2. Must experience in order to know the right quality standards. ex: hospitality
  3. Difficult to define since perception can be highly subjective.
  1. Tangibles.
  2. Can touch, feel and directly measured. ex: car, foods and etc.
  3. Conformance.
  4. Performance. 
  5. Reliability.
  6. Features.
  7. Durability.
  8. Serviceability.

WHAT IS TOTAL QUALITY MANAGEMENT [TQM] ?

TQM is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services. 

The goal is customer satisfaction. 

OBJECTIVES OF TQM

  • To make sure that the firm would do the right thing at the first time and continuously doing the right thing.
  • To increase production and reduce losses.
  • To ensure the firm is effective and efficient in daily operation.
  • To place proper internal control system and scrutiny the performance. 

FEATURES OF TQM

1. Customer-focused

2. Total employee involvement

3. Process-centered

4. Integrated system

5. Strategic and systematic approach

6. Continual improvement

7. Fact-based decision making

8. Communications

PROS

CONS

TQM : PROS AND CONS

  1. Lower production costs.
  2. Increase customer satisfaction.
  3. Continuous review of the progress.
  4. Increase employee morale.
  5. Helpful in meeting the competition.
  1. Demands a change in culture.
  2. Change attitude and re-prioritization of daily operations. 
  3. Time and cost consuming - implementation.
  4. Focus only on task standardization.

INDICATORS FOR CUSTOMER SATISFACTION

  • Frontline empowerment
  • Excellent hiring, training, attitude and morale for front line employees
  • Proactive customer service system
  • Proactive management of relationship with customers
  • Use of all listening posts
  • Quality requirements of market segment
  • Commitment to customers
  • Understanding customer requirements
  • Service standards meeting customers requirements

QUALITY COSTS

Quality costs are the costs associated with preventing, detecting, and re-mediating product issues related to quality.

CATEGORIES COSTS OF QUALITY

COMPLIANCE COST

CONFORMANCE COST

COMPLIANCE COST

PREVENTION COST

  • Cost of designed, implementing and maintenance to prevent defect from occurring in TQM system.
  • All costs incurred before the real commencement of the actual operation.
  • It is include quality planning costs in the first stage.

COMPLIANCE COST

APPRAISAL COST

  • Cost incurred in the process of determine whether defect exists in the TQM system.
  • Include cost of quality inspection, product testing, and audits to ensure the quality standards are been met. 



CONFORMANCE COST

INTERNAL FAILURE COST

  • Associate with discovering poor quality before product reaches customer site.
  • Ex: Scarp work, re-work cost, process failure cost, process downtime cost and etc.

CONFORMANCE COST

EXTERNAL FAILURE COST

  • Associate with quality problem that occur at the customer site or defective product reach customer.
  • Ex: Customer complaint cost, product return cost, warranty claim cost, product liability cost, lost sale cost and etc.

PROCESS OF COSTS

DETAILS EXAMPLE

QUALITY COST REPORT

  • Report of the costs incurred in ensuring that the time maintain a high level of quality and the costs arising from having poor quality product.
  • Report containing the details of prevention cost, appraisal cost, internal failure cost and external failure cost.

HIDDEN QUALITY COST

CONCLUSION

  • TQM can meet customer's satisfaction and reduce cost in scrap part or obsolete stocks.
  • TQM can improve quality of product, quality of employee and quality in management.
  • So, TQM is reliable to implement and assess in organization.
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TQM

by mizalmizari

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Public - 10/12/16, 2:20 PM