Total Quality Management

The other day I was speaking with a business owner and without thinking twice wove the term TQM into the discussion. Upon hearing me refer to it for the second and third time, the owner stopped me mid sentence and with a puzzled look asked, "Just what is TQM?"

Considering myself a victim of jargonitis, it dawned on me that it is time for the Service Edge to address that same question.

Quality in Business

If we consider the most common meaning of quality, one that has been reinforced many, many times in our daily lives, we typically think of something of excellence or possessing superior attributes. We often hear it in advertising and slogans such as "Quality at affordable prices."

While this meaning is undeniably correct, it is not accurate nor is it practical to describe the many uses and understandings of quality in business and industry.

A more relevant definition, especially from a managerial perspective, is quite simply to meet or exceed customer expectations. In this sense, if a product or service meets the needs and intended use of those that receive them, it is considered a quality product or service. It can reflect value in terms of cost, functionality, reliability and how well it fits the image the customer had in mind.

Quality and TQM

Total Quality Management, commonly reffered to as TQM, was pioneered by an American named W. Edwards Demming. It is an integrated management system for enabling organizations to apply quality throughout everything they do.

TQM focuses on building quality into all activities, products and services that the organization is involved with through the participation of all levels and functions of the organization. And challenging conventional wisdom, it emphasizes continually improving things that aren't yet broken.

Some key elements of TQM include a strong customer focus, top management commitment, performance measurement and reporting systems, systems and process orientation, employee involvement and a proactive, long-term perspective.

The benefits of TQM

Businesses have realized significant benefits by adopting some or all elements of TQM. Proven benefits include improvements in customer satisfaction and retention, product and service quality, cost reduction efforts, and productivity.

TQM assists in fostering a cultural change in organizations from one that is reactive and restricted by departmental barriers to one that emphasizes working together at all levels and areas on the common goal of meeting and exceeding stakeholder expectations the first time around.

Organizations also find that given the proper tools, training and opportunity, employees will seize the chance to measure and improve the performance of the processes they are involved in. This often creates an energized and invigorated work climate that continues to breed ideas, opportunities and innovation.

On the National Institute of Standards and Technology Web site, there is an explanation of NIST's Malcolm Baldrige National Quality Award information, an award presented to organizations that lead the Nation in their Quality practices. The following improvements were documented and attributed directly to TQM initiatives of various large and small companies:

** IBM experienced market-to-market cycle time reductions of 23 percent and manufacturing cycle time reductions of 160 percent. Their on-time shipment performance improved by 63 percent with 1997 levels at 99 percent.

**3M Dental Products achieved a doubling of global sales and market share from 1991 to 1996.

**Milliken & Company's Employee Involvement program resulted in each associate submitting an average of 50-60 Opportunities for Improvement reviews per year.

**Custom Research Inc.'s surprise and delight strategy allowed the small business to exceed client expectations on 73 percent of its projects in 1996.

**75 percent of the customers of the Ritz-Carlton Hotel Company would not use a competitor regardless of the offer.

**Merrill Lynch Credit Corporation increased its return on equity by approximately 74 percent between 1994 and 1996 and had a net income increase of 100 percent over the same time period.

**Employee productivity at Motorola increased by 223 percent in 10 years.

**Trident Precision Manufacturing empowered its employees to make process improvements and implemented 98 percent of its employees' suggestions. The small business received over 2200 suggestions in 1996.

**The Revenue per employee at ADAC Laboratories has gone from $175,000 per employee to over $325,000 per employee in the last several years.

**Over a five year period, the Federal Express Corporation increased operating income by 147 percent, while reducing costs per parcel (its primary indicator of efficiency) by 20 percent.

A common stock comparison study showed that companies that won the Malcolm Baldrige National Quality Award outperformed the Standard & Poor's 500 by approximately 2.5 to 1. It has become apparent that quality pays.

Why Isn't Everyone Doing It?

Many successful organizations are. Although it was adopted early on by larger, manufacturing based businesses such as Xerox, Motorola and Ford, it has gained significant recognition and acceptance in the service sectors. It is now quickly moving into small business, healthcare, government and educational sectors.

Federal and state governments have also recognized the role of TQM in improving competitiveness and overall quality of life. In 1993 fewer than 25 states adopted a formal quality program to encourage and recognize organizations that are TQM role models within that state. Now over 42 states have formal quality programs.

As a small business or organization operating in Southwest Florida, consider the benefits outlined above -- which one(s) apply to you? It may be the right time to find out what Total Quality Management can do for you.

For free information about Total Quality Management and Quality Awards programs you can contact:

**Quality Improvement Network of Southwest Florida at the Chamber of Southwest Florida (941) 278-4001

**Florida Sterling Council (850) 922-5316 or www.floridasterling.com

** National Institute of Standard's and Technology www.quality.nist.gov

The Florida Governor Sterling Award was one of the earlier programs initiated in the late 1980's. The vision of the Florida Sterling Council is for Florida to lead the nation in Quality.

There has been a dramatic increase in the number of companies that have applied to be examined with the goal of winning a quality award. The number of applications received at the state level has increased from fewer than 150 in 1991 to over 950 in 1997.

Rorie Wilson's firm, BPM International, is a Southwest Fl