A core definition of total quality management (TQM) describes a management approach to long–term success through customer satisfaction. In a TQM effort, all member of an organization participate in improving processes, products, services, and the culture in which they work.
The four Ps and three Cs of TQM
Processes are the key to delivering quality of products and services to customers. Processes are a key linkage between the enablers of planning (leadership driving policy and strategy, partnerships and resources), through people into the performance (measured by people, society, customers, and key outcomes).
Any business venture should go through the “3Cs and 4Ps” exercise. It is incredibly valuable and insightful exercise. It may seem simple, but the “3Cs and 4Ps” exercise really allows you to think about a business venture in a structured way. Once you force yourself to really go through this exercise, you’ll realize how much you didn’t know about the business idea you had in mind.
The 3 Cs are – Company, Customer and Competition. The 4 Ps are Product, Price, Promotion and Place (distribution). They are explained as
Company – You first need to think about what type of company you plan to operate. What will it look like? What values will you aspire to? What is your company’s mission? Will it be a corporation, an LLC or a sole proprietorship? Where will it be located? What will you name it? Basically, you need to think about anything that that defines the type of company you plan to run.
Customer – Next, you need to think about your target audience. What type of customer will most likely be interested in your product or service? What are the demographics? Where will they live? To what income brackets will they belong?
Competition – Last but not least, you really need to consider your competition. Believe me, if you leave this part out, you’ll get eaten alive. There’s a famous poker saying that sums this up nicely. It basically says that if you don’t know who the sucker is on the table, then it’s probably you. The same holds true in the business world. You need to know your competition very well. You need to learn how they operate, what marketing tactics they use, who their supplier’s are, what financial position they are in and anything else you can dig up.
Product – This is where you define your product or service. If you’re selling something, then define exactly what it will do. But equally important, you need to define exactly what it won’t do. What will it look like? How will it be packaged? Will it need special certifications such as a UL listing?
If you’re offering a service, then the same applies. Your service needs to be really well defined. You need to clearly articulate what you do offer and what you don’t offer. If this is not clear, then you may fall victim to “scope creep” where customers will keep expanding the scope of what you had originally promised them.
Price – How will you price your product or service? If you are selling a product, what price can your target market pay? Do you have any pricing power? That is, if you’re a famous coffee house, then you may be able to sell coffee at higher prices than a local coffee shop.
If you’re offering a service, how will you charge for your work? Will it be hourly, fixed bid or some other combination? You will look much more professional if you can clearly define your services and your prices to a customer. You don’t want to look like you’re winging it during a sales call.
Promotion – How will you market your product? What advertising channels will you use? What social marketing strategies will you deploy? Will you consider pay-per-click advertising? Will you attend any trade shows? What is your marketing budget? What return on investment (ROI) do you want to achieve from the money you plan to invest in marketing?
Place (Distribution) – How will you store and distribute your product? Basically, you need to figure out how you’re going to get your product from your supplier to your warehouse and then to your customer. What shipping methods will these steps require? Will you have a warehouse or will you use a public warehouse? Perhaps you plan to have everything drop-shipped for you so you don’t have to carry any inventory. What distribution channels will you use? Will you sell through distributors or are you planning on sell direct to your customers?
Performance is achieved, using a business excellence approach, and by planning the involvement of people in the improvement of processes. This has to include:
- Planning – the development and deployment of policies and strategies; setting up appropriate partnerships and resources; and designing in quality.
- Performance – establishing a performance measure framework – a ‘balanced scorecard’ for the organization; carrying out self-assessment, audits, reviews and benchmarking.
- Processes – understanding, management, design and redesign; quality management systems; continuous improvement.
- People – managing the human resources; culture change; teamwork; communications; innovation and learning.
The Primary Elements of TQM
- Customer-focused: The customer ultimately determines the level of quality. No matter what an organization does to foster quality improvement—training employees, integrating quality into the design process, upgrading computers or software, or buying new measuring tools—the customer determines whether the efforts were worthwhile.
- Total employee involvement: All employees participate in working toward common goals. Total employee commitment can only be obtained after fear has been driven from the workplace, when empowerment has occurred, and management has provided the proper environment.
- Process-centered: A fundamental part of TQM is a focus on process thinking. A process is a series of steps that take inputs from suppliers (internal or external) and transforms them into outputs that are delivered to customers (again, either internal or external). The steps required to carry out the process are defined, and performance measures are continuously monitored in order to detect unexpected variation.
- Integrated system: Although an organization may consist of many different functional specialties often organized into vertically structured departments, it is the horizontal processes interconnecting these functions that are the focus of TQM.
- Everyone must understand the vision, mission, and guiding principles as well as the quality policies, objectives, and critical processes of the organization. Business performance must be monitored and communicated continuously.
- Every organization has a unique work culture, and it is virtually impossible to achieve excellence in its products and services unless a good quality culture has been fostered. Thus, an integrated system connects business improvement elements in an attempt to continually improve and exceed the expectations of customers, employees, and other stakeholders.
- Strategic and systematic approach: This process, called strategic planning or strategic management, includes the formulation of a strategic plan that integrates quality as a core component.
- Continual improvement: Continual improvement drives an organization to be both analytical and creative in finding ways to become more competitive and more effective at meeting stakeholder expectations.
- Fact-based decision making: TQM requires that an organization continually collect and analyze data in order to improve decision making accuracy, achieve consensus, and allow prediction based on past history.
- Communication: During times of organizational change, as well as part of day-to-day operation, effective communications plays a large part in maintaining morale and in motivating employees at all levels. Communications involve strategies, method, and timeliness.
Today merely SQA is not enough to achieve the quality of software product demanded by the customer. One must apply the TQM methods to the entire software development organization, not just the development processes themselves. Such practice is known as “software total quality management” (STQM). The STQM is a fundamental cultural change from the traditional quality perspective to an organizational philosophy that incorporates quality improvements in every aspect of the organization. Therefore, SQA provides a methodology to assure quality while STQM provides a framework to continually improve it. By instilling TQM’s continuous improvement strategy in every aspect of the software development, an organization never settles for the level that it has reached, no matter how good the product, continually challenging the status quo for new concepts and strategies helps to furnish the software industry with continually better products.