Resource Management.

Resource management is about effectively using people, materials,

INTRODUCTION TO OPERATION MANAGEMENT AND TOTAL QUALITY equipment, and finances. The goal is to maximize productivity while avoiding overuse or
MANAGEMENT underutilization of resources. Recently, Jollibee introduced the use of order buzzers for
customers waiting for their food. Instead of assigning extra staff to keep calling out order
Operations Management numbers or tracking customers, the buzzer system manages the process more efficiently. It saves
employee time, reduces confusion during busy hours, and improves customer experience since
people can wait comfortably until their buzzer notifies them. This shows how technology can be
Operations Management is a vital branch of management that deals with the planning, used to manage resources, both staff and time, more effectively.
organizing, and supervising of processes involved in producing goods and delivering services. It
ensures that resources such as people, materials, equipment, and technology are used effectively Quality Assurance. Quality assurance focuses on maintaining and improving the standard of
and efficiently to meet organizational goals. In simple terms, Operations Management transforms products or services. It ensures that customer expectations are consistently met by monitoring
inputs into outputs, making sure that the right product or service is delivered to the right processes, setting benchmarks, and applying corrective actions when needed. Apple applies strict
customer, at the right time, and with the best possible quality and cost. quality assurance in its iPhone production. Every unit undergoes multiple testing stages, from
durability checks to software performance, before it reaches the market. This ensures that
customers receive high-quality, reliable devices, building trust and maintaining Apple’s reputation
Nature of Operations Management worldwide.

The nature of Operations Management revolves around managing processes and resources to
ensure that an organization runs efficiently and effectively. It plays a vital role in producing Duties and Responsibilities of an Operation Manager
goods and delivering services that meet customer expectations. To understand its nature, we look
at four key aspects: An Operations Manager plays a crucial role in ensuring that an organization’s processes run
smoothly and efficiently. Their responsibilities go beyond overseeing daily activities; they focus
Planning and Forecasting. Planning and forecasting involve setting goals, predicting future on planning, improving, and coordinating different aspects of operations to achieve the
demands, and preparing strategies to meet them. It helps managers anticipate customer needs, company’s goals. From managing schedules and resources to improving workflows and
allocate resources properly, and reduce uncertainties in business operations. Airlines like overseeing supply chains, the Operations Manager ensures that all parts of the business work
Philippine Airlines and Cebu Pacific use forecasting to plan flight schedules based on peak together seamlessly to deliver quality products and services.
travel seasons such as Christmas or summer vacations. They analyze historical booking data,
holidays, and market trends to predict when more people will travel. Based on these forecasts,
airlines add more flights on high-demand routes such as Manila to Cebu and Manila to Davao Planning and Scheduling. This involves setting timelines, organizing resources, and ensuring
during holidays, allocate larger aircraft for busy destinations to accommodate more passengers, that tasks are completed on time to meet customer demand.
hire or schedule additional staff like pilots, cabin crew, and ground personnel to manage the
increased number of flights, and adjust ticket prices, either through seat sales or promos— Process Improvement. This focuses on continuously analyzing and upgrading workflows to
depending on the expected demand. enhance efficiency, reduce waste, and improve quality.

Inventory and Supply Chain Management. This ensures that raw materials, goods, or
Process Design and Optimization. This refers to creating and improving workflows to make products are available when needed while minimizing excess storage costs. It also coordinates
operations more efficient. It ensures that every step in the production or service delivery process with suppliers and distributors for smooth operations.
adds value and minimizes waste, resulting in faster, cost-effective, and higher-quality
outcomes. A good example is CARD Bank. Before, clients mainly used passbooks for their Benefits of Effective Operations Management
transactions, which often required them to visit the branch and fall in line. Now, the bank
introduced Konek2CARD, a mobile banking service that allows customers to deposit, withdraw,
transfer money, and check balances anytime through their phones. This process innovation made Effective operations management plays a crucial role in the success and sustainability of any
transactions faster, more convenient, and accessible for everyone, especially those in remote organization. By ensuring that processes are efficient, resources are optimized, and customer
areas. needs are consistently met, businesses are able to remain competitive in a dynamic market. The
following are key benefits of effective operations management, along with real-world examples
that demonstrate their impact.
Improved Efficiency. Improved efficiency means streamlining processes to maximize businesses experience quality issues when switching suppliers due to shortages, risking customer
productivity while minimizing waste and resource use. Amazon uses advanced robotics and AI dissatisfaction.
in its warehouses to speed up order fulfillment, cutting processing time and improving delivery
efficiency.
Workforce Management. Managing employee productivity, retention, and satisfaction is a
constant challenge. BPO companies face high employee turnover rates, increasing recruitment
Better Customer Satisfaction. Consistently meeting or exceeding customer expectations by and training costs.
providing quality products, reliable services, and a positive overall experience. Through the Nike
App, customers can design their own sneakers (Nike By You) and get exclusive product drops, What is Quality?
creating a unique and personalized shopping journey.
Quality is the perception of how well a product or service meets customer expectations, but it is
Reduced Costs. Refers to minimizing operational expenses without compromising service or more than that. It requires total control and continuous improvement to ensure companies not
product quality. A good example is Dali Stores in the Philippines. To keep prices low, they do only meet but exceed expectations. True quality is seen through the eyes of customers, with
not provide free plastic bags (supot), which reduces packaging expenses. Instead, customers communication as the key. Going beyond expectations is what truly defines quality.
are encouraged to bring their own eco-bags or buy reusable ones. This simple strategy helps Quality is not just about finished products—it also involves the processes, systems, and people
the store cut costs, operate efficiently, and pass on the savings to consumers through affordable behind them. It is everyone’s responsibility and should be embedded throughout the
prices. organization. Quality means striving for excellence, staying ahead of competitors, and meeting
the needs of all stakeholders—customers, suppliers, staff, and the community.
Flexibility and adaptability. This refers to an organization’s ability to adjust quickly to changes Examples include Toyota’s Kaizen approach ensuring reliable cars, Apple’s innovation that
in market conditions, customer demands, or unexpected challenges while still maintaining exceeds customer expectations, Ritz-Carlton’s service excellence in hospitality, and healthcare’s
efficiency. Companies that are flexible and adaptable can survive disruptions and even turn them focus on patient-centered care.
into opportunities. Grab, originally focused on ride-hailing, quickly adapted during the
pandemic by expanding GrabFood to meet customer needs when mobility was restricted. Approaches to Quality Definition

In his book Managing Quality, Harvard Professor David Garin summarized five principal
Challenges in Operations Management approaches to defining quality namely:

While effective operations management drives efficiency and growth, organizations often face
1. Transcendent - Most people would agree that the Mona Lisa or Michaelangelo's David
significant challenges in maintaining smooth and cost-effective operations. These challenges
are works of art which represent quality because people travel from around the world to
arise from both internal factors, such as workforce management, and external forces, such as
view them. But can they define it'. Those who embrace "I can't define it, but I know it
economic fluctuations or supply chain disruptions. Addressing these issues is crucial for
when I witness." Advertisers are inclined of promoting products in these terms. "We love
businesses to remain competitive and sustainable in today’s dynamic environment.
to fly and it shows" "Where shopping is a pleasure" (supermarket), (airlines), "The great
American beauty. ..its elegant" (automobile) and "It means beautiful eyes" (cosmetics) are
Managing Costs. Controlling expenses while maintaining quality is a major challenge. Rising examples. Television and print media are flooded with such indescribable claims, and
fuel, electricity, and raw material prices increase operating costs.. therein lays the problem that quality is not easy to define or operationalized. It therefore
becomes obscure when using the approach as a source of competitive advantage. Besides,
Supply Chain Disruptions the functions of design, production and service may discover it complicated to use the
definition as a starting point for quality management.
Delays in the supply of raw materials or products can affect business operations. Natural
disasters, global crises, or local transport issues may disrupt the flow. 2. Product-based - Quality is observed as a quantifiable or measurable characteristic or
attribute. For instance durability or reliability can be measured and the engineer can draw
to that yardstick. Quality is concluded objectively. Although this approach has many
Quality Management. Ensuring consistent product or service quality can be difficult when benefits, it has limitations as well. The yardstick for measurement may be deceptive
demand suddenly increases or when cheaper materials are used. For instance, some food
 where quality is founded on individual taste or preference. For example, a watch may be Three types of quality:
judged by lifespan, while clothing may be valued for style.
1. Quality of DESIGN- is all about set characteristics that the product or service must
3. User-based - This definition is founded on the idea that quality is an individual issue and minimally have to satisfy the requirements of the customer based on market research. Thus, the
products that best please their preferences (perceived quality) are those with the highest product or service must be designed in such a way so as to meet at least minimally the needs of
quality. This is an approach based on reason but directs to two problems. First consumer the consumer at a given cost. However, the design must be simple and also less expensive so as
preferences differ extensively and it is not easy to combine these preferences into products to meet the customers' product or service expectations. Quality of design is influenced by
with broad demand. This leads to the selection between a niche strategy and a market many factors, such as product type, cost, profit policy, demand of the product, availability of
aggregation approach which strives to identify those product attributes that support the parts and materials, and product reliability. This process of developing a product requires
needs of the biggest number of customers. Another problem concerns whether quality and effective exchange of ideas among marketing, sales, services, manufacturing, research and
customer satisfaction is the same. Probably not. One may confess a Montero has many development departments. Market research and service call analysis are the center of this
quality attributes, but contentment may be better realized with an Adventure. One has process. Market research on consumer shall indicate the customer needs (current and
only to remember the box office success of recent motion pictures that endure from poor potential) and sales call analysis will provide investigation about problems customers face
quality but are obviously favored by the largest number of moviegoers. with the product performance.

4. Manufacturing-based - The definition is focused mainly with engineering and 2. Quality of CONFORMANCE- is basically meeting the standards or user-based
manufacturing practices and uses the universal definition of "conformance requirements." characteristics defined in the design phase after the product is manufactured or while the service
Requirements of specifications are launched by design and any difference involves a is delivered. It refers to the extent in which the firm and its suppliers are able to
decline in quality. The concept is relevant to services as well as products. Superiority in manufacture products with expected level of reliability and uniformity at a specified cost with
quality is not automatically in the eye of the beholder but rather in the standards set by the quality requirements based on the study made on quality design. This phase is also
organization. Thus, both Fortuner and Isuzu Max possess quality, as do Adventure and concerned about quality control starting from raw material to the finished product. Three
Innova's as long as the product or service "conformance requirements" are met. This broad aspects are covered in this definition, namely defect detection, defect root cause
approach has a serious weak point. The consumer's perception of quality is compared with analysis, and defect prevention. Defect prevention deals with the means to deter the
conformance and thus is internally focused. Stress on the reliability in design and occurrence of defects and is usually achieved using statistical process control techniques.
manufacturing is inclined to attend to cost reduction as the objective. Cost reduction is Detecting defects may be by inspection, testing or statistical data analysis collected from
perceived in a limited way which is to invest in design and manufacturing improvement process. Subsequently, the root causes behind the presence of defects are investigated, and finally
until these incremental costs equal the costs of non-quality like rework and scrap. This corrective actions are taken to prevent recurrence of the [Link] customer expectation is
approach goes against Crosby's concept of "quality is free." the focus of quality of performance.

5. Value-based - It is defined using costs and prices as well as the number of attributes. 3. Quality of PERFORMANCE - is how sound the product functions service performs when
Hence, the consumer's purchase decision is founded on quality at an up to standard price. put to use. It measures the degree to which the product or service pleases the customer from the
This approach is based on two criteria which is quality and value. The highest quality angle of quality of design together with the quality of conformance. Meeting customer
product is not typically the best value. That description is given to the "best-buy" product expectation is the focus of quality of performance. Automobile industry performs test drive of
or service. vehicles to gather information concerning mileage and oil consumption. Bulbs are life tested to
be aware of its reliability throughout its useful life. Customer survey is carried out to discover
customer's perception about service rendered. If product or service does not meet to customer
expectation, then modifications are considered necessary in the design or conformance phase.
Quality Types

In general, quality is meeting and exceeding customer expectations at a price that he is willing to
pay to possess the product or service. To understand quality more deeply, we can look at it from Quality Levels
two main perspectives which are quality types and quality levels. These two perspectives
complement each other and together shape how organizations achieve excellence in their Quality in an organization must be managed at three levels which are organization, process, and
products and services. individual. These levels work together to determine the final quality of products and services.
Problems can happen if employees make mistakes, if processes like design or production are
flawed, or if top management fails to set proper strategies, goals, and resources. Therefore, shaped by clear inputs, meaningful results, constructive feedback, and personal capacity. When
quality is a shared responsibility across all levels of the organization. these factors are well-supported, employees can perform effectively, leading to better process and
organizational quality.
Three Quality Levels:

1. Organizational Level quality is centered on customer requirements. At this level, the Quality Paradigms
organization as a whole focuses on ensuring that its products and services meet what customers
want, both for external customers who buy the products and internal customers such as 1. Custom-craft paradigm – In this paradigm, the focus is on the product or service which
employees or departments that depend on each other’s work. Quality at this level is defined by should be exactly as what the customer demands. Each product unit is designed and built exactly
whether products meet expectations, fail to meet expectations, fulfill unrecognized needs, or the way the customer wants it. Some examples of this pattern are from bank loans, coffee shops,
mistakenly provide things customers do not need. To manage these issues, organizations must tailor’s shops and furniture.
also focus on productivity, costs, timeliness, accessibility, and value for money. Many companies
conduct interviews and gather customer feedback to understand these requirements, which are 2. Mass production and sorting paradigm – Here, the focus is on production rate without
then converted into performance measures and standards. In addition, benchmarking is widely direct involvement of the customer. Products are designed and built based on how the customer
used to compare the organization’s performance with competitors or industry leaders, ensuring defined the products. Rework and scrap are obvious since product performance is low. Sales are
continuous improvement. Since customer expectations are always changing, quality management taken from the stock held which makes delivery time typically low. Service organizations under
at the organizational level must also be ongoing. Ultimately, customer feedback becomes the this paradigm are labor-intensive. Some examples of this pattern are clothing brands and
foundation for setting goals, evaluating performance, rewarding employees, and allocating readymade buildings for commercial enterprises.
resources.
3. Statistical quality control paradigm – This paradigm is comparable to the mass production
2. Process Level quality is about how well different functions or departments work together to and sorting paradigm except that more emphasis is given to production processes. The
deliver products and services that meet customer expectations. Since most processes are cross- application of this paradigm together with mechanized production results in low scrap and
functional, it is important to manage them in a way that ensures the success of the entire rework and low production cost. Products are designed and built, statistical process control and
organization rather than just one area. Quality at this level is defined by several key issues, such statistical sampling are used, and then customers are somehow considered in making the
as identifying the products or services most important to external customers, focusing on the products. Some examples of this pattern are from automobile parts and health products.
processes that produce them, and ensuring the key inputs like raw materials, technology, and
information are reliable. It also involves determining which processes have the greatest effect on 4. Total quality management paradigm – This paradigm focuses on customers and suppliers in
customer-driven performance standards and addressing the needs of internal customers, such as addition to mass production and statistical methods. Customers participate in product definition,
employees and departments that depend on each other. By setting measures, performance creation and performance evaluation stages to inform the producer what to design and build.
standards, and checkpoints at critical stages, organizations can monitor results, identify problems, Using employee involvement and empowerment, customer-focus, continuous improvement, top
and make improvements, ensuring that process-level quality contributes both to organizational management commitment, training and teamwork, the producer successfully delivers a product
goals and customer satisfaction. For example, a company that struggled with long delivery times the customers want. This paradigm results in high quality product, low-cost, speedy delivery and
mapped its processes and reduced delays, cutting its cycle time from 13 weeks to just 19 days. substantial decrease for rework and scrap.
This shows how process improvements directly improve customer satisfaction.
5. Techno-craft paradigm – This paradigm is the socio-technical complement to the custom-
3. Performer/Job/Task Design Level quality refers to the contribution of employees to the craft paradigm with the intention of reducing delivery time. Each unit is designed and builds
overall performance of the [Link] people generally want to produce high-quality exactly the way the customer wants it to be built using a high level of product process flexibility.
work, they are often limited by unsupportive systems. Individuals are part of the human The requirements incorporate interchangeable parts, factory power, statistical methods,
performance system, where they receive inputs, produce outputs, and adjust their work based on empowered employees, supplier partnerships, customer relationships, customer aided design, and
feedback. However, employees can only deliver high-quality performance if they are given clear customer-aided manufacturing.
instructions, proper resources, the right training, and meaningful feedback. Standards at the
individual level are based on organizational and process-level standards, ensuring alignment
Cost of Quality
across the system. The quality of an individual’s work is often measured by factors such as
accuracy, timeliness, innovativeness, reliability, ease of use, timeliness, volume, rate, cost, and
flexibility. These standards require answering three key questions: the needs of internal and The total expenses incurred to ensure that the products and services meet the required quality
external customers, how those needs will be measured, and the specific standards for each standards. Identifying such costs in a business is crucial as it enables organizations to determine
measure. Furthermore, the human performance system shows that individual performance is the actual expenses involved in making sure their products or services meet customer
expectations and regulatory/ standard based requirements.
There are two main components of Cost of Quality: Conformance and Non conformance costs. continuous process improvement activities that lead to improved performance at all
organizational levels resulting in the achievement of cross-functional objectives such as
Conformance costs are expenses incurred to produce a product or service based on required
quality, cost, schedule, mission, need, and suitability. Total Quality Management is important to
quality standards. These costs can be classified into prevention and appraisal costs. Non
business because it improves customer satisfaction, meaning that quality goods result in good
conformance costs, on the other hand, are expenses incurred as a consequence of failures in the
satisfaction, and good satisfaction results in greater profits
process, or products/ services itself, due to non compliance in the required quality standards.
These failures or defects can be tracked before (internal) and after (external) products or services
are delivered to customers. TQM merges a participative philosophy of management attributed to Dr. Edwards Deming with
importance on quantitative techniques and employee involvement to get better the quality of
products and services. Who is Dr. Edwards Deming? William Edwards Deming is known as the
A. Prevention costs “Father of Quality Management”. He played a significant role in Japan's economic recovery
and increased productivity and reduced manufacturing costs. According to him, there are
Expenses a company incurs to prevent failures from occurring in the first place. These costs are
Fourteen (14) Points of Management. These are (1) Create constancy of purpose toward
proactive measures taken to ensure that products or services meet quality standards and customer
improvement, (2) Adopt the new philosophy, (3) Cease dependence on inspections, (4) Use a
expectations. Effective prevention activities lead to a reduction in both failure costs (costs
single supplier for any one item, (5) Improve constantly and forever, (6) Use training on the job,
associated with defects and failures) and appraisal costs (costs associated with inspecting and
(7) Implement leadership, (8) Eliminate fear, (9) Break down barriers between departments, (10)
evaluating products or services).
Eliminate slogans, exhortations, and targets, (11) Eliminate quotas and numerical targets, (12)
Remove barriers to pride of workmanship, (13) Implement education and self-improvement, and
(14) Make "transformation" everyone's job.
B. Appraisal costs
Expenses related to the activities of measuring and monitoring to ensure quality standards and
performance requirements. These costs arise from detecting defects and areas to be improved, not TQM optimizes innovative approaches to problem solving and shifts the organization from defect
preventing them. Effective approach in appraisal phase would lead to quality assurance, reduced detention to defect prevention. Thus, all organization’s resources are used effectively to improve
failure costs, process improvement and customer satisfaction. all of its processes and engage everybody in the organization from the top management to the
lowest position to contribute in achieving the total quality management.
C. Internal failure costs
Primary Elements of TQM
Expenses incurred to address defects discovered before a product or service reaches the
customer. These costs arise when the outcomes of work fail to meet the designed quality
Quality is a necessary parameter which helps organizations outshine their competitors and
standards and are identified internally, preventing defective products or services from being
survive the fierce competition. The achievement of TQM depends on the elements which are
delivered to customers. Effective management of these costs would lead to cost savings as. it
further classified into the following four groups.
would reduce external conflict and failure costs.

Foundation
D. External failure costs
Expenses incurred to address defects discovered by customers after a product or service has been
The entire process of total quality management is built on a strong foundation of ethics, integrity
delivered. These costs arise when products or services fail to meet the designed quality standards
and trust. It promotes openness, fairness, and sincerity and allows them to encourage everyone to
and are not identified until after they have been transferred to the customer. Effective
participate. This includes every single employee of any level of organization and level in the
management of these costs would lead to established brand reputation, continuous improvement,
hierarchy.
legal compliance, etc.

Total Quality Management 1. Ethics – a combination of written and unwritten codes of principles that govern decisions and
actions within a company. It is an understanding of the difference between good and bad
Total Quality Management (TQM) refers to a management system for a customer-focused decision-making and behavior in the business world. It describes the actions of individuals within
organization that engages all employees in continuous organizational improvement (Atlassian, an organization as well as the actions of the organization as a whole. It establishes a code of
2024). TQM seeks to advance the quality of processes, products, services, and culture through business ethics that outlines guidelines that all employees must follow in the performance of their
continuous minor changes in response to ongoing feedback. Furthermore, TQM consists of work.
2. Integrity – is the consistency of actions, values, methods, procedures, principles, 3. Training – Training is very important for employees to be highly productive. Managers and
expectations and results in the workplace. Organizational policies must be respected. Avoid supervisors need to make their fellow workers aware of the benefits of TQM and how it will
spreading unnecessary rumors about fellow workers. TQM does not work in an environment affect product quality and ultimately generate revenue for their organization. Employees need to
where employees criticize and backstab each other. Integrity is what customers (internal or be trained in interpersonal skills, teamwork, technical knowledge, decision-making skills,
external) expect and deserve to receive. problem-solving and improvement skills. Training enables employees to implement TQM
effectively within their departments and also makes them indispensable resources.
3. Trust – one of the most important factors required for the implementation of TQM as it
creates a cooperative environment and reliance. Without trust, the TQM framework cannot be
developed. Employees need to trust each other to ensure everyone’s participation and allow Binding Mortar
empowerment which encourages pride in ownership and commitment. Trust promotes
individual-risk taking for continuous improvement and ensures customer satisfaction. Trust
Binding mortar binds all the elements together. Communication binds everything together and it
improves employee relationships and ultimately helps in better decision-making which further
is a vital link between all the TQM elements in order for it to work functionally. Furthermore,
contributes to the successful implementation of TQM.
communication channels must be credible and easy to interpret for all members of the
organization. Information needs to be passed on from sender to receiver. There is a time where
Building Bricks small misunderstandings at the beginning lead to major problems later on and employees need to
communicate with each other to resolve these problems.
Bricks are placed on a strong foundation to reach the roof of recognition The foundation needs to
be strong enough to hold the bricks and support the roof. Leadership, teamwork and training are
Three types of communication takes place between employees:
the building bricks of TQM.
1. Downward communication - This is the dominant form of communication in an
organization. Presentations and discussions are two examples of this form of communication.
1. Leadership - This is perhaps the most important element in TQM. Furthermore, it provides Flow of information takes place from the management to the employees.
direction to the entire TQM process. It is about raising the aspirations of followers and inspiring
people with the desire to achieve goals. Leadership requires the manager to provide an
aspirational vision, make strategic decisions and instill values that guide the subordinates. Total 2. Upward communication - Flow of information takes place from the lower-level employees
Quality Management needs to have a supervisor who acts as a strong source of inspiration for to the top level management. The lower-level employees are able to offer suggestions on the
other members and can assist them in decision making. Commitment and personal involvement effects of TQM to the upper level management using this type of communication. Supervisors
are required from top management in creating and developing clear quality values and objectives. should listen effectively and incorporate the insights and constructive criticisms offered by the
employees in correcting the situations that arise through the use of TQM. This creates a level of
trust between supervisors and employees.
2. Teamwork - is an important element of TQM. Instead of working individually, employees
need to work in teams. When individuals work together, they are in a position to brainstorm ideas
and come up with different solutions that will improve existing processes and systems. Team 3. Sideways/lateral communication - Communication also takes place between various
members must work together to find a solution and put it in place. departments. This type of communication is important because it breaks down barriers between
departments. It also allows a more professional dealing with customers and suppliers.

Teamwork offers contiguous improvement in processes and operations. The teams may be: Roof
a. Problem-solving – these are temporary and formed to solve certain problems, identify and
overcome causes of those problems. They generally last from one week to three months. It includes recognition which brings greater internal customer satisfaction which in turn leads to
external customer satisfaction in the organization. Recognition is the last and final element of the
TQM system. Recognition is the most important factor which acts as a catalyst and drives
b. Quality improvement – these are temporary teams with the purpose of dealing with specific employees to work hard as a team and deliver their lever best. Every individual is hungry for
problems that often recur. These teams are set up for a period of three to twelve months. appreciation and recognition, making employees come up with improvement ideas and
c. Natural Work – these teams consist of small groups of skilled workers who share tasks and performing exceptionally. The most important responsibility of the supervisor is detecting and
responsibilities. These teams use concepts such as employee involvement teams, self- recognizing contributors.
managing teams and quality circles.
 external customers. There are seven generic ways in which the quality of outputs can be
measured:
Further, recognition comes in different ways, places, and times such as:
a. Defects- work not up to specification
1. Ways - It can be by way of a personal letter from top management. Also by award banquets, b. Rework- work requiring correction
plaques, trophies etc.
c. Scrap- work thrown away
d. Lost items- work done again
2. Places - Good performers can be recognized in front of departments, on performance boards,
and also in front of top management. e. Backlogs- work behind schedule
f. Late deliveries- work after agreed time
3. Time - Recognition can be given at any time like in staff meetings, annual award banquets, g. Surplus items- work not required
etc.
5. Synergy in teamwork- it is used to promote collaboration among subordinates. One of the
strengths of using teams for TQM is that they can unite individual qualities needed for running
Core Concepts of TQM business today and provide opportunities for people to work together to reach quality
improvement. People who work on their own or in a small group often have a compartmentalized
1. Customer satisfaction – focuses on meeting the needs and expectations of customers. To picture of their organization, unaware with the work done even by people around them. As a
achieve this, businesses must listen to their customers and deliver accordingly. This is where the result, they may not fully recognize the consequences of poor-quality work. Teamwork breaks
concept of customer-centric comes in, wherein customers are placed at the center of the business. down the communication barriers between people, departments and functional activities and acts
Companies have to give identical importance to the internal as well as the external customers. as a platform of change. It also enables a group to work as a task force as seen in cross-
Many progressive organizations have introduced tools like the “energy meter” survey to measure functional teams and committees which look at cross-functional problems, solving them and
employee satisfaction, morale, and motivation. On the external customer front, surveys are identifying and adopting innovative practices.
carried out among the customers for identifying their satisfaction, expectations and the causes for
low customer satisfaction. For that reason, the satisfaction index is compiled and product 6. People make quality - Most of the quality problems within an organization are not usually
qualities are monitored to improve customer satisfaction. within the control of an individual employee. It is the system often hinders the employees from
performing their job effectively. In such cases, motivation alone is not enough. Therefore,
2. Internal customer satisfaction - Customers are not only external customers, but they are the managers are required to ensure that all necessary is prepared to let people deliver quality work.
end user of a firm's products and services. There is also the internal customer, the person within This creates an environment where individuals are eager to take responsibility for the quality of
the company who receives the work of another and adds his contribution to the product or service their own work. Releasing the talents of every individual within the organization is a way to
before passing it on to someone else. It is essential to achieve a successful internal working generate a culture for continuous quality improvement.
relationship in order to satisfy the needs of the external customer. If the internal customers'
requirements are identified and met, a chain of quality is built that reaches out to the external 7. Continuous improvement cycle - The continuous cycle of identifying customer requirements,
customer. Regardless of whether a business provides goods or services, the employees and meeting and measuring them, evaluating success and continuing the improvement can be applied
departments it serves internally are just as important as external customers. Therefore, they also both externally and internally to stimulate quality improvements. With consistent practice, it will
require speed, efficiency and accuracy. gradually establish a fresh "chemistry" within the organization so that the culture starts to change
to one of continuous improvement.
3. All work is process - Another focal point of improvement is that of business processes. A
process is a combination of methods, materials, manpower and machines that work collectively 8. Prevention - At the heart of TOM is the belief that it is possible to achieve defect-free work
to produce a product or service. All processes include natural variability or differences and one most of the time. This principle is known as "right first time, every time" or zero defects policy.
approach to quality improvement is to progressively reduce variation. First, this can be done by It emphasizes prevention through careful and diligent use of measurement, process controls and
removing variation due to special causes or those unusual problems and secondly by minimizing the data-driven and systematic elimination of waste and error. Prevention is the essence of all
the common or normal cause of variation, thus bringing the process under control improving the quality assurance. Through planned and systematic actions, such as documentation of work
capability. processes and conducting cost of quality audits, quality assurance prevents quality problems
before they occur.
4. Measurement - In order to improve, one must first measure one's present performance. This
will help one focus both on satisfying internal customers and meeting the requirements of
Benefits of TQM Similarity and Differences of Reengineering and TQM

1. Creates a good corporate culture - TQM is an approach where the customer is the Some people have said that both TQM and Reengineering are the same, while others have
center point of the business rather than the department. Therefore, quality is transformed argued that they are incompatible. Michael Hammer argues that the two concepts are
from an issue of the production department to a strategic business entity to meet global compatible and actually complement each other. Both concepts have the same focus-
challenges. The TQM philosophy revolves around developing a culture that supports total customer satisfaction.
commitment to customer satisfaction through continuous improvement.
TQM has contributed the concept of teamwork, worker participation and empowerment, cross-
functionality, process analysis and measurement, supplier involvement and benchmarking. Also,
2. Better reviews from customers - Another benefit of TQM is that customers and clients TQM has emphasized the need for a "total" view of the organizations in its approach to problem
are highly satisfied with the performance. Given the quality assurance testing procedures, solving. TQM has also influenced company culture and values by exposing organizations to the
the products of the company will constantly meet the requirements and needs of clients need for change.
and customers. Therefore, the customers stay with the company longer, deepen their
relationship with the company and demonstrate less price sensitivity while recommending
TQM has advocated continuous and incremental improvement of processes (Kaizen) whereas
the company’s products or services to others. Customer satisfaction and high performance
reengineering is about radical discontinuous change (breakthrough improvement) through process
results also possibly lead to high reviews in different publications and newspapers which
innovation. TQM and reengineering fit together over time in the life of a process.
further enhances the image of the company and in turn that of the business.

3. Better performance from employees - Through TQM, there is often more attention
Reengineering (BPRE) TQM (CIP)
placed on meeting the needs of the employees or internal customers. The training given to
the employees as part of the program can boost employee morale at the workplace Similarities
resulting in employees working harder to achieve the goals of TQM.
Basis of analysis Process Process

TQM and Reengineering Performance Measurement Rigorous Rigorous

Reengineering, sometimes called Business Forces Reengineering (BPR) involves a complete Organizational Change Significant Significant
rethinking and transformation of key business processes, leading to strong horizontal
Behavioral Change Significant Significant
coordination and greater flexibility in responding to changes in environment. Because work
originated around processes rather than function, reengineering often involves a shift to
Time Investment Substantial Substantial
horizontal structure based on teams.
Banks and insurance companies, manufacturing and mining companies, and service companies
throughout the world, all have achieved breakthroughs in speed, flexibility, innovation and
quality through reengineering.
It is very important to understand that reengineering is not a disconnected discipline. It is, in fact,
a subset of TQM. The essential difference between (Business Process) Reengineering and TQM
is that reengineering aims at quantum gains on the order of 30% to 50% or more, whereas TQM
programs stress incremental progress, striving for inch-by-inch gains again and again.
The two approaches to improve performance are not mutually exclusive, it makes sense to use
them in tandem. Reengineering can be used to first produce good basic design that dramatically
improves a business process. Total quality programs can be used to work out bugs, perfect the
processes, and gradually improve both efficiency and effectiveness.
 Differences
Level of Change Radical Incremental
Starting Point Clean slate Existing process
Participation Top-down Bottom-up
Typical Scope Broad, cross-functional Narrow, within functions
Risk High Moderate
Primary Enabler Information technology Statistical control
Type of Change Cultural and structural Cultural

TQM is the way of achieving the objective of "total quality. The techniques used for continuous
improvement and process reengineering are the tools of TQM.

In Japan, continuous improvement is referred to as Kaizen. This is incremental, gradual and

continuous improvement. According to Masaaki lmai, who coined the term, Kaizen means
improvement. It means continuous improvement involving everyone, both managers and
workers. Kaizen strategy maintains and improves the working standard through small gradual
improvements. In general, improvement can be defined as Kaizen and innovation.

Kaizen means gradual, incremental, continuous improvement. Innovation calls for the radical
improvements as a result of large investments in technology and/or equipment. But the modern
approach to total quality management includes both incremental and breakthrough improvements
under the term "continuous improvement”

When reengineering is implemented, the objective of total quality must always be foremost to
ensure success. Otherwise, implementation can be costly and still not yield acceptable or long-
term results. Process reengineering emphasizes radically changing to the existing processes under
the assumption that those changes will definitely improve the firm's global performance or the
performance of one of its specific processes.

However, to be effective, a firm's internal organization and processes should be directly and
formally linked to enhancing profitability through the fulfillment of its customers’ needs. If this
relationship is correctly and explicitly established right from the beginning, then reengineering
can be one of the best tools to achieve total quality and it will significantly improve the
performance of the firm.