Understand the impact of Total Quality Management (TQM) on a business and how it influences performance, competitiveness and stakeholder relationships.
Key Concepts
Quality Control (QC): Operational techniques used to detect and correct defects in products or services.
Quality Assurance (QA): Systematic processes that give confidence that quality requirements will be met consistently.
Total Quality Management (TQM): An organisation‑wide philosophy that seeks continuous improvement in all processes, involving every employee.
Quality Control (QC)
Definition & Purpose
QC aims to identify non‑conforming items and eliminate waste before they reach the customer. It is usually carried out at the point of production or during final inspection.
Common QC Methods – Purpose, Typical Use & Business Impact
Continuous monitoring of key dimensions or cycle times
Detects trends early → less scrap & re‑work → lower internal‑failure costs and higher productivity.
Control Charts
Visualise stability of a process
Plotting defect rates, cycle times, etc.
Helps maintain process capability → shorter lead‑times and reduced downtime.
Six‑Sigma DMAIC
Define‑Measure‑Analyse‑Improve‑Control to reduce variation
Complex, high‑volume processes where 3.4 defects per million opportunities is the target
Significant cost savings (often 10‑30% of total production cost) and strong brand reputation.
Quality Costing – The Four Categories
Understanding where money is spent on quality helps managers decide where to invest in improvement.
Category
Description
Typical Examples
How It Is Measured
Prevention Costs
Costs incurred to avoid defects occurring
Training, process design, quality‑planning, supplier qualification
Budgeted expense vs. actual spend; ROI calculated from subsequent failure‑cost reductions.
Appraisal Costs
Costs of evaluating products/services to ensure they meet standards
Inspection, testing, SPC, calibration of equipment
Number of inspections × cost per inspection; percentage of total production cost.
Internal‑Failure Costs
Costs of defects found before delivery to the customer
Scrap, re‑work, downtime, waste, reject handling
Value of scrap + re‑work labour + lost production time.
External‑Failure Costs
Costs of defects discovered after delivery
Warranty claims, returns, recalls, loss of goodwill, legal expenses
Warranty payments + cost of replacements + estimated loss of future sales.
Quality Assurance (QA)
Definition & Purpose
QA builds quality into processes rather than testing for it after the fact. It creates a systematic environment that gives confidence that specifications will be met consistently.
Key Standards
ISO 9001 – Quality Management Systems
ISO 14001 – Environmental Management (often integrated with quality)
ISO/TS 16949 – Automotive industry quality
ISO 13485 – Medical devices
Typical QA Activities
Documented procedures, work instructions and process maps
Reduced Failure Costs: By preventing defects, QA lowers both internal‑ and external‑failure costs.
Improved Reputation & Market Access: ISO certification is often a prerequisite for tendering, opening new markets and attracting quality‑sensitive customers.
Consistent Delivery: Standardised processes lead to predictable lead‑times, supporting better inventory management and customer service.
Enhanced Decision‑Making: Audits and KPI dashboards provide reliable data for strategic planning.
Benchmarking – Learning from the Best
Benchmarking compares a company’s processes and performance with those of leading organisations.
Types
Internal – comparing departments or plants within the same firm.
External – comparing with competitors or best‑in‑class firms.
Typical Metrics: defect rates, lead times, cost per unit, customer‑satisfaction scores.
Example: A car manufacturer reduced its defect rate from 4 % to 1 % after benchmarking its assembly line against a Japanese rival known for “just‑in‑time” quality.
Core Elements of TQM
Element
Description
Typical Tools
Customer Focus
Understanding and meeting customer needs and expectations.
Surveys, Voice of the Customer (VoC), Net Promoter Score (NPS)
Continuous Improvement (Kaizen)
Ongoing effort to enhance products, services and processes.
PDCA cycle, Six‑Sigma, Benchmarking
Employee Involvement
All staff participate in quality activities and decision‑making.
Quality circles, Training programmes, Suggestion schemes
Process‑Centred Approach
Viewing work as interrelated processes rather than isolated tasks.
Process mapping, Flowcharts, Value‑stream analysis
Integrated System
Quality is embedded in the organisation’s strategy, culture and systems.
ISO 9001, Balanced Scorecard, ERP quality modules
Impact of TQM on Business Performance
Link each impact to the four A‑Level business objectives (profitability, growth, market share, stakeholder satisfaction).
Cost Reduction – Elimination of waste and defects lowers production costs.
Profitability: Higher margins.
Improved Product Quality – Fewer returns, warranty claims and re‑work.
Stakeholder Satisfaction: Customers and shareholders gain confidence.
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