Higher Business Management - TQM: Total Quality Management

This is a quality management process likened to a philosophy championed by the likes of W. Edwards Deming in Japan which focuses on preventative measures in quality and getting it right first time.

To simplify it for Higher students the key issues are:

Everyone is involved in quality. Everyone works together to solve quality problems. A quality chain is used, whereby workers treat each other like customers.

This leads on to zero defects. The aim of TQM is that there will be no flaws in the finished product. The customer is the focus of TQM and we want to keep them happy. TQM aims for 100% customer satisfaction.

TQM encourages Kaizen which means continuous improvement. Firms will focus on the weakest part of the product and strengthen it and then begin the process all over again.

Quality Circles are used in TQM whereby small teams of workers from different disciplines (engineering, production and sales) and from different levels of the organisation come together to identify and solve quality problems.

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Higher Business Management - Stock Control Diagram

A business which holds stock will implement the following stock levels in order to meet customer demand at all times.

Minimum Level: this is the minimum amount of stock needed in case the required supply were to be delivered late. The business will never allow the stock level to drop below a certain point in order to prevent a resource shortage.

Maximum Level: this is the maximum amount of stock which can be held in the warehouse at any given time. This level is restricted by factors such as space; cost; and, delivery time.

Re-Order Level: this is when the stock level drops to a certain point and the process will automatically re-order the required stock. In order to decide at what point to re-order, businesses must consider the following: how long is the delivery time? how reliable is the supplier?

Lead Time is the time taken between making an order and its delivery, which replenishes stock.

Quality Methods

A common exam question is based on describing the different Quality Methods available to organisations. Here are some key points for each:

Benchmarking

• Copying the best techniques used by other organisations
• Products/services taken apart and re-engineered.
• Can result in a better product than the original.
• However if it takes time, competition may have moved on from what was the original best practice.

Quality Circles

• Small groups of employees from different departments and at different levels of management who meet to discuss and solve quality issues.
• Improves the workforces motivation as they feel more valued as their opinions are taken into consideration.
• Suggestions are made to management for approval

Quality assurance

• Products are checked at various stages during production
• Unacceptable products are discarded

TQM (Total Quality Management)

• No errors tolerated
• Treat everyone in the production chain as a customer therefore creating a Quality Chain.
• Based on Kaizen philosophy (Continuous improvement)
• All staff involved and committed to ensuring high quality (unlike Quality Circles where only small groups are targeted)
• Work processes scrutinised
• Constant strive to make processes more efficient and reduce waste
• Focus on teamwork
• Training provided

BSI

• A national standard for certain products
• When a business meets the standard its product can carry the BS Kitemark
• Other quality standard symbols also exist (Lion marks on eggs)

Quality Control

• Product quality checked at the end of the production process
• Traditional method
• Use of Quality Inspectors
• Can result in high wastage and reworks