TOTAL QUALITY MANAGEMENT

Everyone has had experiences of poor quality of services or even products when dealing business organization. These experiences might involve an airline that has lost a passengers luggage, dealing with the dry cleaner that left the clothes with stained without washing it again, or buying defective items in the supermarket. That is why quality has certain value in the customer as it gives satisfaction for them. A frequently used denition of quality is Delighting the customer by fully meeting their needs and expectations. These may include performance, appearance, availability, delivery, reliability, maintain ability, cost effectiveness and price. It is, therefore, imperative that the organisation knows what these needs and expectations are. In addition, having identied them, the organisation must understand them, and measure its own ability to meet them. Moreover, making quality a priority means putting customer needs rst. It means meeting and exceeding customer expectations by involving everyone in the organization through an integrated effort. TQM which is Total Quality Management is defined as A management approach that centers on meeting customer requirements by achieving continuous improvement in products (Langfield, 2009). Besides that, according to Reid and Sanders, 2010, TQM is An integrated effort designed to improve quality performance at every level of the organization. TQM requirements may be defined separately for a particular organization or may be in adherence to established standards, such as the International Organization for Standardization's ISO 9000 series. TQM can be applied to any type of organization; it originated in the manufacturing sector and has since been adapted for use in almost every type of organization imaginable, including schools, highway maintenance, hotel management, and many more. There are six key features of TQM overall. The first key feature of TQM is would be the organization wide. Organization wide involves everybody in the organization including supplier to integrate all organisation functions to focus on meeting customer needs and organisational objectives. Secondly is customer-driven which requires an awareness of development in technology, rapid, and flexible response to customer and market needs.

Empowerment is the third key features of TQM which developing employees potential to fulfil organisations goal. Other than that, process perspectives which focus on smooth flow of activity across the organisation rather than within functional department also become one of the TQM features. Moreover, the fifth key feature is supported by quality management. It is situation where the implementation of documented quality procedures and practices in order to keep the entire TQM process under control. The last key features would be continuous improvement. The organisation must constantly monitor the effectiveness of their products or services to meet more difficult objectives to satisfy customers. There are several reasons or criteria that make TQM different from quality control. The first criteria that make TQM is different from quality control is in the way of its function. TQM impose quality assurance whereby quality control consist of controlling the quality of the products or services given. Besides that, the objectives are also different from others. TQM emphasizes of improving the effectiveness of the operational processes at every stage and get to a right first time state. Meanwhile, quality control its objective was to established standards of quality which are acceptable to the customer and economical to maintain such standard. Moreover, the other criteria that make these two are different is the person involved. In TQM, everyone in the organisation is involved but in quality control they involve only the Quality System Department or Production Department. There are many different definitions of the Cost of Quality available, and many are lacking in scope or precision. Often these definitions have not kept up with the times and don't account for software costs, supply chain interactions, or more. To remedy these shortcomings, there are two definitions will be provided. According to Joseph Juran, COQ is a financial measure of the quality performance of an organisation. Meanwhile, based on Nameer, 2008, The COQ isnt the price of creating a quality product or service. Its the cost of NOT creating a quality product or service. There has been a lot of research performed in measuring quality costs but Joseph Juran, a.k.a. The Father of Quality has set a significant foundation from which all quality costs can be measured. There are four major categories that can be identified to measure the quality costs. The costs associated with quality are divided into two categories: costs due to poor quality and costs associated with improving quality. Prevention costs and

appraisal costs are costs associated with improving quality, while failure costs result from poor quality. A prevention cost is the costs incurred in the process of preventing poor quality from occurring. For example, quality engineering, quality planning, etc. Meanwhile, the appraisal cost is the costs incurred in the process of uncovering defects. For example, monitoring, inspecting materials, etc. The failure costs can be divided into two which are the internal failure cost and the external failure cost. An internal failure cost is costs associated with discovering poor product quality before the product reaches the customer. The costs include scrap, rework, material disposals, etc. On the other hand, the external failure cost is the cost associated with quality problems that occur at the customer site. For example, sales return, warranty claims, product recall and many more. Management must understand these costs to create quality improvement strategy. An organizations main goal is to survive and maintain high quality goods or services, with a comprehensive understanding of the costs related to quality this goal can be achieved. Based on the case study of Laser News Technology (LNTL), they wanted to implement the TQM program, including cost of quality reporting because the company could no longer afford to ignore the importance of product quality (Langfield Smith, Kim; Throne; Helen; and Hilton, Ronald W., 2009). There are several factors can be identified that should be present for an organisation to successfully implement a TQM program. Firstly, it should be organisation-wide as it needs to infiltrate all aspects. Besides that, it should involve empowerment which giving the employees the responsibility for improvements and authority to make changes to accomplish them provides strong motivation for employees. Moreover, the last factor is it should be customer driven because the customer is believed to be the ultimate judge of quality. The LNTLs TQM program has been successful implemented. It can be seen through the analysis of cost of quality report, the prevention and appraisal costs increase until the third quarter and slightly decrease from fourth quarter. Besides that, the internal and external failure costs continuously decrease until the sixth quarter. Morse (1983) explains that there is an inverse relationship between prevention and appraisal costs and internal and external failure costs.

Therefore, spending money on prevention can reduce the costs of internal and external failure and vice versa. The main point is that prevention is the key to overcome quality problems. It is better to spend money on prevention and appraisal, than to face internal and external failure costs. There are four benefits of TQM which the first one will be the increasing in production. Other than that, it will be less complaint received from the users. Moreover, the revenue generated also increased. Last but not least, the goal of the company can be achieved. In addition, if the company chose of not implementing the TQM program, they can measure the opportunity cost through these few ways. One of it was through the number of sales return. Secondly, will be through the product quality ranking and lastly would be through return on investment. Therefore, we can conclude that total quality management is a broad system that focuses on meeting customer requirements by achieving continuous improvement in products or services. It is a culture that focuses on quality, from top floor to shop floor, across the entire value chain.

http://www.wiley.com/college/sc/reid/chap5.pdf http://searchcio.techtarget.com/definition/Total-Quality-Management http://www.businessballs.com/dtiresources/total_quality_management_TQM.pdf http://www.tqmschool.com/articles/TQM%20-%20Cost%20of%20Quality.pdf http://www.costofquality.org/ http://blog.lnsresearch.com/blog/bid/124741/Cost-of-Quality-Definition