Roee Ganot August 12, 2021 In today’s highly competitive landscape, acquiring new customers is the natural focus of many businesses. Considering how the market fluctuates, however, customer retention should also be at the top of everyone’s list. The pandemic has made every consumer conscious about the money they spend on basic necessities and even small luxuries like fashion accessories and gadgets. Acquiring and retaining customers today means providing high levels of quality in the provision of products and services, and having a TQM (Total Quality Management) program in place will help you ensure quality from production to distribution.
TQM is an organizational management approach focused on maintaining sustainable levels of excellence in production to provide enhanced levels of customer satisfaction. It’s an overall approach that involves workers across an organization, helping improve employee productivity and, consequently, providing the business a competitive edge. Because customer satisfaction is the main focus, it’s important to align quality standards with customer expectations. Customers are satisfied if you’re able to meet these expectations; more so if you exceed them. Below are the three main components that help you achieve this.
- An understanding of what customers expect from a certain product, industry, or field
- The expertise and resources needed to consistently deliver what customers expect
- A way to communicate to customers what you intend to deliver and how you intend to deliver it
What Are the Benefits of TQM for Business?
While it may seem that TQM is a program that should stay in production, its benefits are more far-reaching. It helps businesses reach a middle ground between meeting customer expectations and operating in a way that’s sustainable to the business.
TQM Improves Business Efficiency
Focusing on the customer is good, but making customers happy without regard for the business is self-defeating in the long run. A business should also evaluate the way it operates and gain a deeper understanding of its own processes. A TQM program can help you do this by helping you understand:
- how processes work together to produce the desired outcomes;
- how processes consistently deliver the desired outcomes or their effectiveness; and
- how processes are productive based on resources used or their efficiency.
While focusing on the customer is critical to success, it isn’t the only factor. A business can go broke sparing no expense to make customers happy. So not only does a business need to satisfy customers, but it needs to do it in a way that is. A business also has to look within and understand its own operations, another important role of a quality management system.
Ultimately, the goal of a TQM program is to meet customer expectations by consistently producing high-quality products as intended without wasting resources.
TQM Provides a Competitive Edge for the Long-term
Successfully implementing a TQM program in your organization means being able to make customers happy while operating at the highest level of efficiency. The key behind the program’s success is its focus on how the entire organization operates and not just on the final product or outcome. This ensures that quality is ensured in every step of production and distribution. This requires the active participation of all employees and teams involved in the production process. While it can be a challenge to get everyone on board the program, achieving organizational cooperation is an achievement that will provide a large payoff in the long term. Moreover, a TQM program promotes teamwork and provides opportunities for self-development.
TQM Identifies Non-productive and Wasteful Processes
TQM programs endeavor to provide continuous improvement where necessary, and this can’t be achieved if non-productive processes remain in the production process. By checking and evaluating the overall quality of business processes, the program helps identify processes that fail to meet set standards and they can then either be improved or removed completely from the equation. Consequently, it also helps provide insight on what processes are missing that will help the organization reach the desired levels of quality and excellence. It also helps improve communication between different teams because they are the ones responsible for carefully planning and implementing processes that will help bring about substantial improvements in overall quality.
The Cost of Poor Quality
The true cost of poor quality is not limited to costs that result from producing defective or sub-standard products, but also covers the costs of non-productive or inefficient business processes. Inefficient and wasteful processes negatively affect the quality of final products and can damage brand reputation and weaken customer relationships as a result. According to the American Society for Quality, poor quality can cost a business up to 20% of sales revenue and 40% of total operations. Moreover, the ASQ also states that, as a rule of thumb, even thriving companies will have a cost of poor quality equal to 10%-15% of operations. The major categories of the cost of poor quality are the following:
- Freight costs
- Rework costs
- Chargebacks
- Product returns
- Lost sales
The TQM Challenge
The challenge of TQM is commitment. It’s not simply a task or process you disseminate to employees and expect them to carry out. It takes commitment from top to bottom; management must commit to adhering to processes and practices that ensure the highest levels of quality through the entire process, while also helping employees get a deeper understanding of the program and its goals. This will ensure that they understand the benefits gained from their efforts and take their cue from management on deciding what to prioritize. The true value of TQM is only gained through complete involvement and cooperation of everyone in the organization. This can only be achieved if they truly understand the value of TQM and how it’s a valuable element of a company’s culture.
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