Practical Perspective on Implementation of TQM in Small Scale Industries

Published by MBA Skool Team, Published on April 21, 2015

Total Quality Management received global attention and appreciation till the early 2000s and has been a buzzword for many small scale and large scale organizations. Total Quality Management is the highest level of 7 Quality Circles and encompasses all the distinguished features and advantages of Quality Inspection, Control, Engineering and Management. Generally, TQM refers to the management philosophy or concept aimed towards building quality, involving the involvement of employees at all levels focusing on continuous process improvement along with customer satisfaction to meet the organizational goals more effectively and efficiently.

Organizations which have implemented TQM in a strategic manner aligned with its business objectives have gained enormously. For example, Tata Steel has decreased its debt to equity ratio from 1.54 to 1.03 & realized higher margins as well as earned a savings of 7.2 Billion INR in net profits after implementing TQM. In Mercedes Benz, the line PPM decreased to 38 from 210 after implementing TQM. In Philips, out of box failure rates dropped to nearly half after TQM implementation. Thus, we can say that the actual three independent and mutually exclusive pillars on which the implementation of TQM is based on any organization are Involvement of employees at all levels, customer focus, and end to end approach in all value adding functions. These three pillars, no matter how generic and easy they sound, pose a serious threat of challenges and issues in TQM implementation in an organization, especially a small scale organization. The difference between small and large scale organization in TQM implementation comes in a manner as small scale organizations normally don’t have enough funds to hire an external consultant which can probe into the root causes of problems in the organization and come up with a roll out plan of TQM implementation customized to the organization’s needs. Also, Small Scale Organizations generally don’t have well defined processes and systems in place related to change management. Both these reasons pose a more serious problem for small scale organizations than large scale organizations.

Before analyzing the implementation of TQM, it is necessary to firstly understand the objective of TQM. The main theme of TQM is to better the quality in an organization. Quality defined in most crude terms relates to the characteristics that meet the latent as well as the expressed needs of the customer. The quality here doesn’t mean only the quality of goods and services that the organization produces, it also refers to the quality of documentation, quality in adherence to processes and systems, quality in dealing with suppliers, quality in making relationship with customers as well as quality of designing and Quality of conformance. So, it is understood that TQM is successful in implementation when it will be able to better the Quality throughout the organization.

The first pillar of TQM implementation as mentioned above is involvement of employees at all levels. One of the reasons that word Total is used in TQM is because it requires participation and responsibility of all employees and that too at all levels. It is generally very difficult as the perception is quality is the responsibility of only Quality Control function. However the eye opener is that it is the responsibility of all functions ranging from R&D, materials, production, distribution and most importantly sales and marketing function. For R&D, it is necessary to have Quality of Design which explains how good the design is? Quality of Conformance explains how well the designed product conforms to its specified requirements? While for materials, it relates to the proper and effective material planning, scheduling and procurement, for production it is about well defined processed and systems which can be replicated any number of times to give consistent and reliable results. Thus, involvement of all employees in this initiative, proper training for new processes and systems and group decision making are key elements for the implementation of TQM. It even incorporates the user documentation team, corporate communication team, pilot and prototype team as well as validation and verification team.

Second pillar in TQM implementation is customer focus. This term customer satisfaction, customer focused or customer delight are used extensively now a days in management jargons but have a much deeper meaning than just the obvious ones. Customer focus implies that the product and services that the organization produces must be able to satisfy the customer needs. This can only be done if each of the value adding activities is directed towards customer needs whether it is R&D, production, marketing or distribution. R&D needs to ensure that product must be ergonomically designed, easy to use, easy to maintain and with improved performance at viable prices. Production needs to ensure that the product is free from out of box defects and shortcomings. Marketing & Distribution needs to ensure that the right product is available at the right place at the right price to the right people. So, all these activities can only be done if every decision making process is guided by the objective to satisfy customer needs.

Third pillar in TQM implementation is an end to end approach in all value adding functions. In small scale organizations, not very well defined roles, processes and systems exist for each of the various functions and because of this, each function behaves in an independent manner. Normally this organizational structure system is one of the widely used systems globally but in change management processes, such systems don’t work properly. This is because change management processes behave in a very iterative fashion. For a decision to be made, first R&D team makes a decision, based on that procurement and production team makes a decision and then goes to marketing and sales team. If sales and marketing team are not in the favor of the decision, then the entire cycle is repeated from R&D, procurement and production to sales and marketing. Because of such behavior, decision making related to change management processes becomes highly time consuming. So, the TQM approach requires that an end to end approach should be followed in all decision making processes. An example is the transition from NPD approach to NPI approach. NPD stands for new product development and NPI stands for new product introduction. The difference between the two is while NPD approach aims to design and launch the product based on the needs of the customer as specified by the marketing team, the NPI approach takes into being an end to end approach meaning that the from design to launch to after sales service to gathering customer feedback, i.e. NPI aims to not just develop the product but to introduce the product that satisfy the customer needs. This can be done by having any decision making process involving participation from all teams. In this manner, all the potential causes of problems are known beforehand and a more exhaustive solution plan is developed which fastens the decision making process and removes unnecessary iterations.

It has been observed in many organizations that although the theory of TQM is well known and easily available, its implementation causes serious challenges. Five major factors in which challenges in implementation of TQM process can be divided is Lack of Vision, Lack of skills, Unavailability of any incentive, Lack of resources and false start plan. These five categories of challenges can be easily dealt with if the three pillars of TQM implementation is well understood and properly followed. TQM approach can turn out to be highly beneficial and can cause a kick start in the quality domain of any organization.

According to W. Edwards Deming, in his research paper on Quality Management, to develop the TQM based system, one can follow any of the following processes: TQM elemental process, Quality thinker or guru process, Japan based TQM process, Reward Criteria process & the Organizational structure process. However, during actual implementation, a combination of these processes is used allowing advantages of one to complement the shortcomings of another. Also, there are certain misconceptions regarding the implementation of TQM like for every project, every job site is different, delays and errors are different and it is very specific to every jobsite.

Thus, to successfully implement the TQM, one should ask the questions: How well the organization delivers what it promises, how often first time right solutions are implemented, how well timeliness is followed, what is the confidence level of the products and services to organization, how quickly request is processed & finally how is the customer satisfied.

This article has been authored by Arush Singhal & Aastha Kumar from FMS Delhi


1. Brian E. Mansir & Nicholas R. Schacht, “TQM: A guide to Implementation”, LMI Report PL 912R1, Logistics Management Institute, Maryland, 1989

2. Dr. K.K. Garg, Pranav Mishra, “The Quest for Excellence: A Case Study of TQM Practice in Tata Steel”, Opinion Vol. 3, No. 1, June 2013

3. Albrecht Koster, "Being Best in the Customer’s Eyes – A Mercedes Benz Perspective", Managing Service Quality: An International Journal, Vol. 4 Is: 5, pp.26 – 29, 1994

4. Hans Ulrich Frehr, "TQM Transforms Philips Germany", TQM Magazine, Vol. 1 Is: 3, 1989

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