What is Total Quality Management(TQM) in Business Management?

What is Total Quality Management (TQM)?

Total quality management is modern concept in management accounting. It aims to eliminate defects (zero defects), so there is no allowances are available for wastages and idle time. It attempts to manufacture goods of required quality in first attempt. There is no need to rework products which increases cost and time to deliver products. Total quality management is the need of just in time (JIT) to reduce delivery time.
In TQM production and inspection takes place at the same time. Quality is checked at each stage of production process so defects can be identified and corrected where it has occurred before it proceeds to the next stage. It is consistent with the old maxim 'prevention is better than cure'
TQM recognizes the need for inter-departmental communication, so that workers know their work falls in the overall process. Ex, delivery department can know how to handle the goods by communicating with packaging department. Workers need to be trained enough undertake the maintenance work and fix the machinery on their own to prevent idle time due to machine breakdowns.
In TQM focus is on quality from the eyes of the customer. It recognizes the need for decentralization as customers can be entertained according to the requirements of the customers regarding product quality and specification in different locations.

What is Benefits of Total Quality Management (TQM)?

• TQM saves money by eliminating reworking of finished goods that uses more resources and time.
• Training provided to workers increases their motivation because of increase in employability.
• Workers are aware of the end result of their jobs helps them perform their job more effectively by keeping the required result in mind.
• TQM help business products to be certified for quality from the organizations like ISO (international standardized organization) which increase marketability of products.
• Reduces cost of after sales services and warranty claims. Warranty claims expenses pickup, rework and again delivery of goods.
• Non-value added (Do increases value to the customer) activities like finished goods inspection are eliminated as goods are inspected for quality at each production stage.

What is Limitations of Total Quality Management (TQM)?

• TQM has unrealistic policy of 'doing things right' which is not possible as human being is not perfect.
• Quality checks at each stage may increase the length of production process resulting in more cost.
• TQM needs cultural changes like line of communication, production process and so on. Employs do not accept these changes as they were get familiar with existing work processes and may not like to learn new way of doing things.
• Training can result in costs and idle time. The time in which workers can produce products, will now be spent of attending classes and money paid on behalf of workers to teachers can be substantial which can used elsewhere to gain competitive advantage.
• TQM can increase many fixed costs recruitment of full-time skilled labour on salaried basis in place of part-time semi-skilled labour on hourly wages and more money will be spent on machine maintenance to avoid machine breakdowns which can exceed the cost of breakdowns.
• Production processes may need to be automated to get consistency in product quality. It needs substantial investment in plant and machinery.

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