Total quality management

QUALITY – Degree to which a set of inherent characteristics fulfill requirements

As it relates to mainly product and service quality, it can be defined as –
“The total composite product and service characteristics of marketing, engineering, manufacturing and maintenance through which a product or service in use will meet the expectations of the customer.”




Quality always refers to CUSTOMER SATISFACTION.

Now customer satisfaction can be achieved through two components:
 Product features
 Freedom from deficiencies

Product features refers to the quality of design It has a major effect on sales income (through market share, premium prices, etc.). Increasing the quality of the design generally leads to higher costs.

Freedom from deficiencies has a major effect on costs through reduction in scrap, rework, complaints, and other results of deficiencies. Freedom from deficiencies refers to quality of conformance usually results in lower costs. In addition, higher conformance means fewer complaints and therefore increased customer satisfaction.

TQM (Total Quality Management)

This concept in quality in quality analysis consists of 3 words TOTAL, QUALITY, AND MANAGEMENT.

Total –- involves everyone and all activities in the company

The following diagram shows total involvement of the management, labour, equipment and supervisory staff in the making of the product.























Quality – as explained in the beginning it means conformance to requirements i.e. meeting customer requirements.

Management – quality can and must be managed.

TQM – A process for managing quality, it must be a continuous way of life, philosophy of perpetual improvement in everything we do. The philosophy of TQM is dynamic, based on continuous improvement and change and usually aims at the highest quality in process, products and services.

QUALITY PLAYS A VERY IMPORTANT PART IN GENERATING SALES INCOME.

In defining quality for goods and services, two components have been identified: product features and freedom from deficiencies. Although both of these components are essential to generating sales, in general the product features is more dominant

For profit making organizations, the contribution of quality to sales income occurs through several means:

 Increasing market share.
 Securing premium prices.
 Achieving economies of scale through increased production.
 Achieving unique competitive advantages that cement brand loyalties.

ACHIEVING A QUALITY SUPERIORITY FOR A PRODUCT

Differences in quality can be either translated into either a higher market share or a premium price. By differences in quality I mean that better quality will lead to more sales because customers want better products and they don’t mind paying a little extra for the same. Increase in sales will lead to a higher market share because more and more customers will now shift to the product which has a relatively better quality than the same kind of products.

The benefit to the manufacturer depends on the nature of their differences and on who is the user. If the quality is low then it might lead to a loss in market share. If the user is more concerned about money then improving the quality by putting a premium price would be painful to the manufacturer.

It is useful to categorize the differences as an aid to developing quality superiority for new or modified products. Some categories of quality differences are as follows:

1. Differences that are obvious to the user:
Products or services which possess a desirable feature which is lacking in competing products will command a premium price (or a higher market share if the price is competitive).

Example: appliances with automatic features that simplify housework and services which provide overnight delivery.


2. Differences that are translatable into user economics:
Some products look alike but are different in operating, maintenance, or other costs. Fuel economy of automobiles is an example of a difference that has become a competitive issue.


3. Differences that are minor but demonstrable:
Sometimes a small but demonstrable superiority can be a forceful selling tool. The expressiveness of the manufacturers or advertisers focusing on a very small but a strong feature of the product can help them gain a substantial amount of market share.

Example 1: The manufacture of antifriction bearings showed that the bearingswere more precise than the competition’s. The competing products were entirely fit for use, so no price differential was feasible. But the fact of greater precision was emphasized and resulted in an increased market share.
Example 2: In a case of candy-coated chocolates, the “superiority” was the lack of chocolate smudge marks on consumers’ hands – a minor quality but one that is demonstrable on television

4. Differences that are accepted on faith:
Sometimes a quality difference cannot easily be verified by a buyer, but a demonstration by a manufacturer can persuade the buyer to accept the difference as true.
Example: A manufacturer of electric razors employed an independent test laboratory to conduct tests. Consumers shaved themselves with two competing razors. The contents of the razors after shaving were weighed precisely. Of course, the contents of the sponsoring company’s razor weighed more than the competition’s.

CONCLUSION:

Achieving quality superiority requires understanding customers’ needs in depth and then translating those needs into specification and resulting in a physical product or service. Search for quality differences may be the means of achieving a unique competitive advantage in the marketplace.

Basic to the effort is observing customer use of the product and then searching for unique product features or characteristics that can increase customer satisfaction. This approach of “stapling ourselves to the product” must, of course, be continuous because the competition is not standing still either.

Examples of such customer needs that can be identified and steps that can be taken to satisfy those needs and thereby increase sales income.

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Product Hidden customer need satisfied by a competitor
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Software Understandable owner’s manual

Commodity Product Delivery of orders within 24 hours rather than the 48 hour standard requirement

Automobile Less effort in closing door, better “sound” when door closes

Photographic Film Fewer process adjustments when processing film due to lower variability

Dishwasher Sense of greater durability due to heavier parts making up the appliance.

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