Total Quality Management (TQM) is a philosophy that seeks continuous quality improvement and customer satisfaction, involving all employees and extending to suppliers and customers. It aims for productive efficiency in the firm, with a focus on doing things right the first time and creating a competitive advantage.
Total Quality Management (TQM) is a philosophy that integrates all organizational functions to focus on meeting customer needs and organizational objectives. It is a comprehensive management approach that works horizontally across an organization, involving all departments and employees, and extending backward and forward to include both suppliers and clients/customers. TQM is characterized by its focus on quality improvement, customer satisfaction, and the philosophy of doing things right the first time.
TQM highlights the importance of constantly improving quality to meet or exceed customer expectations. This approach fosters a culture of continuous improvement, which can lead to more efficient operations, lower costs, and ultimately, a competitive advantage for the firm. TQM also considers the integration of key business processes, including the flow of materials from suppliers to customers, as well as the effective planning, organizing, and controlling of the myriad of value-creating activities of the firm.
The concept of TQM became particularly influential when American car manufacturers adopted just-in-time delivery from Japanese business practices. This resulted in higher quality control, competitive sub-assembly plants seeking cost-effective labor, and altered supply chain dynamics. A key part of the theory of the firm is producing outputs more valuable than the inputs without waste, hence productive efficiency, which is an integral component of TQM.