Total Quality Management is an approach widely credited to W. Edwards Deming who believed that the key to successful quality improvement was the attitude of workers and by respecting them this would create a positive attitude in the workplace and improve the quality of their output (Proctor 2012). Deming (1986, pg. 23-24) produced 14 points which he believed were the basis of effective implementation of TQM and to help with the "transformation of American industry" (Deming 1986, pg. 23). TQM aims to include "design, purchasing, operations, distribution, marketing and administration" (Collier 2012, pg. 217). The aim of TQM as a whole is that of continuously improving the quality of products and processes through the "involvement of management, workforce, suppliers, and customers, in order to meet or exceed customer expectations" (Cua et al 2001, pg. 676) or "the requirements of the customer" (Proctor 2012, pg. 506). As can be seen from this, a key component of TQM is satisfying the need of the customer, this can sometime be hard as "customers are not always explicit about their requirements" (Proctor 2012, pg. 507) and therefore this can have a negative impact on the costs of a company as they could result in a large quantity of unnecessary expense by exceeding the requirements of the customer without actually realising it which is something I'll go on to discuss later in the this section. The figure below shows some examples of how customer satisfaction can be satisfied (Drury 2004, pg. 14)
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As well as involving customers into process in order to satisfy their needs, TQM also encourages the collaboration between a variety of other stakeholders in order to find ways to improve the quality of its products. Cua et al (2001) list nine practices that are commonly part of a TQM system as well as the improvement of employees and customers these also include "cross-functional product design, process management, supplier quality management,â€¦, information and feedback, committed leadership, strategic planning, cross-functional training" (Cua et al. 2001, pg. 676). These practices shows the extent to which TQM aims to ensure quality products, considering all aspects of a company to make sure that everything in the company is doing what it can to meet the target quality.
When considering a business's stakeholders; employees are considered to be of upmost importance. Therefore, a key part of the TQM model is to allow employees "to use their first-hand knowledge to intervene and improve production processes" (Proctor 2012, pg. 504). This works as the TQM philosophy means that if employees thought of a way in which quality could be improved at of the stages of production they would be able to implement their idea without the need for management approval no matter how small the improvement was. These small improvements might not seem to have much of an effect, however as employees started noticing many of these small improvements, together they could have a significant effect on the quality of the final output.
Another key part of the TQM model is that of continuous improvement, under Deming's initial 14 points, point 5 stated "improve constantly and forever the system of production and service, to improve quality and productivity" (Deming 1986, pg. 23, this point explains that in order to help improve quality and productivity you need to constantly improve the production system which is an underlying part of TQM. By continuously improving the various processes of production, you will be able to drive down the costs involved in the overall product due to a number of reasons including; reduction in waste and increased customer satisfaction (therefore less time spent dealing with complaints and also customers order more from the company) (Dean and Bowen 1994, pg. 395). Two main ways in which TQM aims to deal with helping with continuous improvement are firstly standardisation, which aims to promote consistency within the production line meaning that all products produced will be more and more identical. Secondly is using measurement systems such as statistical process control and six sigma, which I will explain in detail later in this essay (Collier 2012). These measurement systems aim to help reduce the variation that occurs within the products therefore reducing the amount of defects that occur during production, by continuously reducing this figure is one example of continuous improvement occurring.
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When looking at TQM one important thing to consider is the costs involved, as a company will not have endless sources of funding which that can use to continually improve the quality of their products. They therefore need to consider how much the can spend by looking at the cost of quality; the difference between what they need to spend to improve quality (e.g. product design, employee training and maintenance) and they may have to spend in order to deal with problems that occur with poor-quality items after production (cost of waste, warranty claims, product recalls) (Proctor 2012, Drury 2004). This leads to the "trade-off between the costs of prevention and those of cure" (Proctor 2012, pg. 506) as the more a company spends on improving quality and therefore preventing poor-quality, the less they will need to spend dealing with problems. When dealing with the cost of quality we can look at the figure below which shows how an optimum degree of quality can be found (Proctor 2012, pg. 507).
Six Sigma is another performance improvement technique, which some consider to be of similar nature to Total Quality Management with Six Sigma being sometimes called "TQM on steroids" (Proctor 2012, pg. 521) and TQM being something that "contributes greatly to the Six Sigma approach" (Tennant 2001, pg. 7). Six Sigma is something that was started and developed by Motorola in 1980s as a tool that could be used in manufacturing environments to reduce the number of defects and variation in their production (Anand et al 2010) and since has evolved over time to become an approach for improving the performance of a business and increasing its profitability. Especially over the last decade and during the 2000's it has gained extensive popularity, which can be said to be due to its use by companies such as General Electric whom have said it saved $8 billion during 2001 due to Six Sigma approaches and Bank of America who saved over $2 billion due to the methodology (Shafer and Moeller 2012).
Six Sigma is a highly organised and statistical mythology and can be defined as "an organised and systematic method for strategic process improvement and new product and service development that relies on statistical and scientific methods to make dramatic reductions in customer-defined defect rates" (Linderman et al. 2003, pg. 195), this definition highlights the fact that it Is trying to meet the customer's target of quality similar to TQM. The main measurement that Six Sigma uses in order to achieve its aim is defective parts per million opportunities (DPMO), an improvement rule of 10x is then often set for defective reduction (Linderman et al. 2003), meaning that if current defective part rate was 5% this would equate to a DPMO of 50,000 and 10x improvement rule would set a goal of 5,000 DPMO (a defective part rate of 0.5%). The process will then continue with its overall aim to achieve 'zero defects' and variations of output are within 6 standard deviation/sigma from the mean, with a DPMO of 3.4 (meaning that 99.99966% or 100.00% to 2 d.p. of outcomes were non-defective). The graph below shows how the DPMO varies with process sigma assuming a standard deviation. If a process is at a level of two or three sigma is usually relatively easy and cheap to get to a four sigma level, however it takes much more sophisticated statistical analysis and effort in order to reach a Six Sigma level. (Linderman et al. 2003, pg. 194)
In order to improve the performance of a business the Six Sigma methodology follows a structured method based upon the "plan, do, check, act (PDCA) cycle" (Linderman et al 2003, pg. 195). The most popular method associated with Six Sigma a five-step process to improve the processes (Lin et al 2013, pg. 97):
Define - Identify what the project is and its objectives
Measure - Gather data to quantify the problem and describe the current performance levels
Analyse - Identify the root causes by enhancing the understanding of the processes and identifying what is behind the problem
Improve - Eliminate the problem by developing solutions and modifying the process to include these solutions
Control - Ensure the solution has an impact on the way people work by monitoring the changed that have been made as it becomes normal activity of the business
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This DMAIC procedure is then repeated when a new target level of DPMO has been set. With the DMAIC process being used for existing processes and services, it can be easily modified for new processes. The first 3 steps remain the same, with the procedure becoming DMADV to reflect this: (Proctor 2012, pg. 522).
Design - Create a new process that meets the objectives of the project
Verify - Implement the design produced and compare the actual outcomes to those predicted
This DMADV approach is also known as "Design for Six Sigma" (Linderman et al. 2003, pg. 195), as the process that is being made is specifically designed for use with Six Sigma. No matter which method is used those involved require extensive training in order to familiarise themselves with the Six Sigma toolkit, these specialist are often referred to as "Black Belts, Master Black Belts, Green Belts and Project Champions" (Linderman et al. 2003, pg. 195) depending on their position and level of training received.
Is Six Sigma really just 'Total Quality Management on steroids'?
As you may already be able to tell there are some common similarities between Total Quality Management and Six Sigma such as their focus on the needs of the customer, which may make you think that Six Sigma is just an advanced form of TQM. However, there are also a number of differences between the two such as