What is the importance of total quality management to acheiving competitive advantage?

Answer 1

Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company. TQM looks at the overall quality measures used by a company including managing quality design and development, quality control and maintenance, quality improvement, and quality assurance. TQM takes into account all quality measures taken at all levels and involving all company employees.

TQM focuses strongly on the importance of the relationship between customers (internal and external) and supplier. These are known as the "quality chains" and they can be broken at any point by one person or one piece of equipment not meeting the requirements of the customer. Failure to meet the requirements in any part of a quality chain has a way of multiplying, and failure in one part of the system creates problems elsewhere, leading to yet more failure and problems, and so the situation is exacerbated.

Product quality

Quality management ensures product quality. Some primary aspects of product quality include: performance, reliability and durability. Through the use of a quality management program, the company can produce a product that performs according to its stated promises. The will endure normal, everyday use. Use quality management programs to improve the quality of a product and to design new products. Six Sigma has a specific component called DFSS (Design for Six Sigma) which is a methodology to build Six Sigma quality into a product or service.

Customer Satisfaction

Quality management ensures customer satisfaction. Conduct customer satisfaction surveys to understand the qualities of the product important to the customer. Also conduct surveys with those who are not the company's customers. This will also provide insight into why these businesses use the services of the competitor. Use customer surveys to target those features of a product or service that need improvement. The quality management program provides a methodology to use to create the type of product the customer desires.

Increased Revenues

Quality products and services give the company a spotless reputation in the industry. This reputation allows the company to gain new customers and sell additional products and services to existing customers. A quality management program also removes inefficient processes within the system. By removing unnecessary processes, employee productivity increases. The employee is spending less time on activities that do not contribute to the product's quality. As a result, the employee is producing more work in less time while the company has not increased the salary. Quality management programs help recapture lost monies due to inefficiencies.

Reduce Waste

A quality management program helps companies reduce waste. Companies that house inventory are paying for the storage, management and tracking of the inventory. The costs of having the inventory are built into the price of the product. Implementing a quality management program reduces the amount of inventory that costs the company money and occupies valuable space. Quality management means that there is a systematic approach to keeping inventories at acceptable levels without incurring waste. Work closely with suppliers to manage inventory using a Just-in-Time (JIT) philosophy. In short, a JIT inventory system helps the suppliers and manufacturer remain in close communication to become more responsive to the customer.

Teamwork

Quality management systems force company departments to work as a team. Different areas of the company become reliant upon one another to produce a quality product that meets and exceeds the customers' expectations. A quality system incorporates measures that affect sales, finance, operations, customer service and marketing. The balanced scorecard is a one-stop-shop for evaluating how various departments are operating against their performance expectations. Use the balanced scorecard to show how close the company is to the financial, operational, customer service and learning/growth targets.