Important/Benefits of TQM

The benefits of TQM include:

 Less product defects. One of the principles of TQM is that creation of products
and services is done right the first time. This means that products ship with fewer
defects, which reduce product recalls, future customer support overhead and
product fixes.

 Satisfied customers. High-quality products that meet customers’ needs results in

higher customer satisfaction. High customer satisfaction, in turn, can lead to
increased market share, revenue growth via upsell and word-of-mouth marketing
initiated by customers.

 Lower costs. As a result of less product defects, companies save cost in customer
support, product replacements, field service and the creation of product fixes. The
cost savings flow to the bottom line, creating higher profit margins.

 Well-defined cultural values. Organizations that practice TQM develop and

nurture core values around quality management and continuous improvement. The
TQM mindset pervades across all aspects of an organization, from hiring to
internal processes to product development.
Examples of TQM

Automobile manufacturer Toyota is one example of TQM. The adoption of TQM and
kaizen at Toyota led to higher product and work quality at all levels of the
organization. Toyota adopted a related practice called statistical quality control (SQC)
in 1949. In 1951, Toyota launched the Creative Idea Suggestion System, which was
based on a suggestion system used at Ford.
Why Is Total Quality Management Important to an Organization?

Nichols says that TQM tools and principles acquire power not when an organization
creates a dedicated quality department, but when it includes the whole company in the
pursuit of high quality. An example is the quality circle, in which workers directly
involved in a process brainstorm to discover solutions. “People are a fabulous resource
that is frequently underutilized. The leadership often doesn’t recognize the value that
they bring to the everyday workplace. Employees know how to fix problems,” asserts
Nichols. In addition to tapping a native resource, implementing a TQM philosophy can
help an organization:

 Ensure customer satisfaction and customer loyalty

 Ensure increased revenues and higher productivity
 Reduce waste and inventory
 Improve design
 Adapt to changing markets and regulatory environments
 Increase productivity
 Enhance market image
 Eliminate defects and waste
 Increase job security
 Improve employee morale
 Reduce costs
 Increase profitability