Total Quality Management

The philosophy underlying TQM, as articulated by W. Edwards Deming, is based on the following five-step chain reaction:

1. Improved quality means that costs decrease because of less rework, fewer mistakes, fewer delays, and better use of time and materials.
2. As a result, productivity improves.
3. Better quality leads to higher market share and allows the company to raise prices.
4. This increases the company's profitability and allows it to stay in business.
5. Thus the company creates more jobs.

Deming identified a number of steps that should be part of any quality improvement program:

• A company should have a clear business model to specify where it is going and how it is going to get there.
• Management should embrace the philosophy that mistakes, defects, and poor-quality materials are not acceptable and should be eliminated.
• Quality of supervision should be improved by allowing more time for supervisors to work with employees and giving them appropriate skills for the job.
• Management should create an environment in which employees will not fear reporting problems or recommending improvements.
• Work standards should not only be defined as numbers or quotas but should also include some notion of quality to promote the production of defect-free output.
• Management is responsible for training employees in new skills to keep pace with changes in the workplace.
• Achieving better quality requires the commitment of everyone in the company.

Hill, Charles W. L., and Gareth R. Jones. Strategic Management Theory, 7th ed. Boston: Houghton Mifflin,2007. 128.