TOTAL QUALITY MANAGEMENT (TQM) AND PURCHASING

 TOTAL QUALITY MANAGEMENT (TQM) AND PURCHASING

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Today is about Total Quality Management (TQM)

Total quality management (TQM) is both a philosophy and a set of guiding principles that represent the foundation for continuous organizational improvement. TQM is the application of not only quantitative methods but also human resource management principles to improve the materials and services supplied to an organization, all the processes within that organization, and the degree to which the needs of customers are met. The research discussed in this article integrates the concepts, ideas, and findings that have emerged from ongoing multi-phase studies of purchasing role in TQM. From this research, sponsored by the centre for Advanced Purchasing Studies (CAPS), the investigators have developed several ideas about what purchasing organizations should do to attain total quality management goals. Besides, TQM is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company. TQM looks at the overall quality measures used by a company including managing quality design and development, quality control and maintenance, quality improvement, and quality assurance. TQM takes into account all quality measures taken at all levels and involving all company employees.

The Origin Of TQM

Total quality management has evolved from the quality assurance methods that were first developed around the time of the First World War. The war effort led to large scale manufacturing efforts that often produced poor quality. To help correct this, quality inspectors were introduced on the production line to ensure that the level of failures due to quality was minimized. 

After the First World War, quality inspection became more commonplace in manufacturing environments and this led to the introduction of Statistical Quality Control (SQC), a theory developed by Dr. W. Edwards Deming. This quality method provided a statistical method of quality based on sampling. Where it was not possible to inspect every item, a sample was tested for quality. The theory of SQC was based on the notion that a variation in the production process leads to variation in the end product. If the variation in the process could be removed this would lead to a higher level of quality in the end product. 

After World War Two, the industrial manufacturers in Japan produced poor quality items. In a response to this, the Japanese Union of Scientists and Engineers invited Dr. Deming to train engineers in quality processes. By the 1950’s quality control was an integral part of Japanese manufacturing and was adopted by all levels of workers within an organization. 

By the 1970’s the notion of total quality was being discussed. This was seen as company-wide quality control that involves all employees from top management to the workers, in quality control. In the next decade more non-Japanese companies were introducing quality management procedures that based on the results seen in Japan. The new wave of quality control became known as Total Quality Management, which was used to describe the many quality-focused strategies and techniques that became the centre of focus for the quality movement. 

The positive relationship between perceived quality and profitability has been well documented. The Profit Impact of Market Strategy (PIMS) data base shows this correlation unequivocally. Analysis of the PIMS data has shown that in the long term, the most important factor affecting a business unit's performance and market share is the quality of its products compared with that of its competitors. Superior relative quality is the most effective way for a business to grow. Improved quality leads directly to market expansion and increased market share. 

In the short term, superior quality leads to increased profitability and even the ability to charge a premium price relative to a firm's competitors. As quality increases, cost per unit invariably decreases at both the buying and the supplying firms.