Palawan State University

College of Business and Accountancy

Tiniguiban, Puerto Princesa City

Total Quality Management

A Narrative Report in Operational Management and TQM

Submitted by:

Quita, Elaizah Lyn C.

Quita, Eloizah Lyn C.
Romero, Arnie
​ ​ ​ ​ Serrano, Glezza
​ ​ ​ ​ ​ Sibonga, Jeah Nicole
​ ​ ​ ​ ​
I.​ Introduction

​ Total Quality Management is a structured approach to overall

organizational management. The focus of the process is to improve the quality of
an organization’s outputs, including goods and services, through the continual
improvement of internal practices. In other words, it is the continual process of
detecting and reducing or eliminating errors in manufacturing. It streamlines
supply chain management, improves the customer experience, and ensures that
employees are up to speed with training (Investopedia). TQM is important to the
company through the process of its operations ensuring the total quality of its
products and services being offered in the market while reducing the costs
through the number of materials procured which leads to minimizing or
eliminating waste, letting the organization be adaptable to change due to certain
factors that impact the prices of the core resources of the company making the
resources efficiently used without the probable chance of higher risk of waste
resources.
Through the course of the discussion of TQM its evolution/ historical
background with a brief introduction to key contributors will be discussed together
with its core principles, insights into quality management (dimensions,
determinants, responsibility of quality management with the consequences of
poor quality and cost of quality), addition to these are the quality awards and
certification in utilizing a TQM system.

Objectives:
a.​ Understand the timeline of creation of total quality
management in business.
b.​ Importance of principles and roles of leadership in total quality
management of the business.
c.​ Determine the dimensions, determinants and cost of quality,
and the consequences of poor quality.
d.​ Identify quality awards and certification.
II.​ Evolution of Quality Management
​
​ The Quality Management has four stages in the evolution of Total Quality
Management, it is as follows:
1.​ Inspection-Based Quality - a product was compared with a product
standard by a team of inspectors.
-​ In the Craftsmanship Era before the Industrial Revolution to 1700
where guilds were created and those people working in guilds
individually created products and skilled craftsmen tested the
finished products before deciding to sell the products. But quality
became more challenging when the Industrial Revolution occurred
and mass production became dominant as a large number of
products became continuously produced it also reflected the
defects that emerged in large numbers and the start of the first
stage of Quality Management (Inspection-Based Quality) emerged
wherein workers checked the finished products of its quality for
possible defects and either to modify, reject or accept before
offering it in the market. With this stage, limitations occur such as
reactive approach (fixing problems after they occur), high waste
and cost (due to rejected products), and no process
improvement (defects kept recurring).​

2.​ System of Quality Control- quality was achieved through control

systems, which included product testing and documentation.
-​ This stage started in the 1920s, when statistical theory began to be
applied effectively to quality control and in 1924, Shewart made the
first sketch of a modern control chart Statistical Process Control
which shifts from inspection to process monitoring. His work was
later developed by Juran and Deming wherein they further
developed a System of Quality Control, integrating statistical
tools to prevent defects. The early works of Shewart, Deming,
Dodge and Romig constitute much of what comprises the theory of
statistical process control (SPC), from detecting to controlling
defects through systematic processes which maintain the status
quo through quality standards, usage of statistical methods,
process performance and product testing. However, the focus on
the manufacturing process results in a little concern about the
satisfaction of the customer and the quality control team not being
integrated into all departments.
3.​ Quality Assurance- a shift in focus from product quality to systems
quality.
-​ This stage started during 1940-1950 when the U.S military adopted
quality assurance to ensure the reliability of weapons and
equipment during WWII which focused on preventing defects rather
than just detecting the defects of the products/services
produced/rendered through the beginning of concepts of quality
standardization- quality system (International Organization for
Standardization (ISO) 9000), quality costing, quality planning and
policies, problem-solving and quality design. Afterwards, quality
assurance made its expansion from 1950-1970 through the
teaching of Deming and Juran’s principles applied by Japan after it
surrendered to America, making it in its perfection, it is also this
time that Ishikawa’s Fishbone Diagram and Kaizen (Continuous
Improvement) were introduced - looking for the root cause of
defects or inferior quality of products produced ensuring for zero
defects with assurance of quality on each products produced.
However, they still relied on specialized quality teams meaning not
being fully integrated into the company culture while is more
focused on processes than people, relying on the created quality
systems rather than being empowered to improve them.

4.​ Total Quality Management (TQM)

-​ It began during 1980-1990 with the help of Deming’s 14 Points,
Juran’s Trilogy, and Crosby's “Zero Defects” Philosophy wherein
TQM is not just a mere philosophy but a formal business strategy.
With the rise of the quality products produced by Japan it magnified
that quality assurance is not enough to prevent a large number of
defects in reflecting the sales reported that is why the United States
with the philosophy of the three people mentioned above were used
and with the greater positive impact it brings led to the creation of
ISO 9000 (1987)- a recognized international standard created by
the International Organization for Standardization (ISO) in 1987
ensuring consistent quality produced through the common
standardized guidelines and the Malcolm Baldrige National Quality
Award (1988) - an award given in recognition of American
companies that excelled in quality management but it also requires
long-term commitment and company-wide culture change and can
be resource-intensive especially for small businesses. Afterwards,
 in the 2000s as there was already a TQM program that ensured the
total quality of the products with machines that check real-time it
came into a problem to be solved that is for faster delivery, lower
cost and higher quality which is why they used Lean
Manufacturing – eliminates waste and speeds up production, Six
Sigma – uses data to reduce process defects to nearly zero, Agile
– makes teams more flexible, adapting quickly to customer needs
and aside from this TQM keeps evolving with Big Data, IoT, and AI
ensuring the prediction of the problem before it occurs, making a
quality decision based on customers’ demand and continuously
improving with technology.

III.​ Foundations of Modern Quality Management

a.​ Core Principles
●​ Customer Focus - the primary goal of TQM is to meet or exceed
customer expectations. Understanding customer needs and providing
products or services that deliver value is a central tenet.
​ Key Aspects of Customer Focus:
❖​ Understanding customer needs
❖​ Customer satisfaction
❖​ Customization and Personalization
❖​ Proactive Problem Solving
❖​ Building Long-term relationships
●​ Employee Involvement - all employees, regardless of their level or role,
should actively participate in quality improvement efforts. Training
empowerment, and fostering a culture of accountability are essential.
●​ Process Approach - TQM emphasizes understanding, managing, and
improving processes to achieve desired results. It focuses on efficiency
and effectiveness in the operations of an organization.
●​ Integrated System - it integrates all organizational systems and
processes to work toward common quality objectives. goals are aligned
across teams to ensure coherence and collaboration.
●​ Strategic and Systematic Approach - the quality management system
is aligned with the organization’s strategic goals and is consistent with
long-term objectives.
●​ Continual Improvement - the organization strives for ongoing
improvements in processes, products, and services. Incremental
enhancements and innovative changes contribute to overall quality.
​ Core Methodologies
 ❖​ Plan-Do-Check-Act (PDCA) - a cycle for iterative
improvement:
➔​ Plan - identify issues and set improvement goals.
➔​ Do - implement small-scale changes.
➔​ Check - measure results against expected
outcomes.
➔​ Act - standardize successful changes and scale
them up.
❖​ Six Sigma (DMAIC Approach) - focuses on reducing
defects.
➔​ Define - identify the problem.
➔​ Measure - collect data and analyze current
performance.
➔​ Analyze - find root causes of defects.
➔​ Improve - implement solutions
➔​ Control - sustain improvements over time.
❖​ Lean Management - focuses on eliminating waste and
improving efficiency.
●​ Fact-based decision making - the organization makes decisions based
on accurate data and objective analysis rather than assumptions.
Statistical tools and quality management methods can aid this process.
●​ Communication - it is the glue that binds the principles of TQM together,
ensuring seamless implementation and promoting a culture of quality
throughout the organization. It fosters a shared vision, encourages
employee engagement, promotes transparency, and enhances
collaboration.
●​
Importance of these Principles are:
➢​ Higher customer retention
➢​ Competitive advantage
➢​ Efficiency and cost reduction
➢​ Innovation and adaptability

b.​ Role of leadership in quality

●​ Leadership as a Quality Driver - leaders influence the organization’s
commitment to quality through:
❖​ Setting the Vision
❖​ Creating a Quality Culture
❖​ Empowering Teams
❖​ Leading by Example
❖​ Encouraging Innovation
●​ Leadership in Implementing Quality Frameworks - strong leadership is
essential in applying quality management framework:
❖​ ISO 9001
 ❖​ Total Quality Management
❖​ Six Sigma
❖​ Lean Management
●​ Leadership and Employee Engagement in Quality Management -
leaders foster an environment where employees are active participants in
quality improvement by:
❖​ Encouraging Open Communication
❖​ Providing Training and Development
❖​ Recognizing and Rewarding Contributions
❖​ Encouraging Problem-Solving and Collaboration
●​ Leadership’s Role in Customer-Centric Quality Management - a
customer-focused leader ensures that the company’s quality efforts align
with customer needs by:
❖​ Listening to Customer Feedback
❖​ Prioritizing Customer Satisfaction
❖​ Building Trust and Transparency
●​ Leadership and Continuous Improvement - strong leaders drive
continuous improvement by:
❖​ Implementing PDCA Cycle
❖​ Supporting Data-Driven Decisions
❖​ Encouraging a Growth Mindset
Importance of Leadership in Quality Management are:
➢​ Drives organizational commitment to quality
➢​ Ensures customer needs are met
➢​ Empower employees for continuous improvement
➢​ Implements effective quality management systems
➢​ Adapts to market changes and innovates

IV.​ Insights on Quality Management

A.​ Dimensions of Quality: Product and Service Quality
​ a1. Dimensions of Product Quality
❖​ Performance - the primary function of the product.
❖​ Features - additional characteristics that enhance usability.
❖​ Reliability - consistency of performance over time.
❖​ Durability - the product’s lifespan before replacement is needed.
❖​ Conformance - adherence to industry standards and
specifications.
❖​ Aesthetics - the product’s appearance, design, and feel.
❖​ Serviceability -0 ease of maintenance and repair.
❖​ Perceived Quality - customer perception of the brand and
reputation.
​ a2. Dimensions of Service Quality
❖​ Tangibles - the physical appearance of facilities, equipment, and
personnel.
 ❖​ Reliability - consistently delivering promised service.
❖​ Responsiveness - willingness to help and provide prompt
service.
❖​ Assurance - employee knowledge and courtesy that build trust.
❖​ Empathy - personalized attention and care for customers.

B.​ DETERMINANTS OF QUALITY

-​ It refers to the process quality as judged by the consumers during a
service delivery and the quality of output judged after a service is
performed

B1. FACTORS INFLUENCING QUALITY

1.​ Inputs or Materials - High-quality raw materials or resources
often lead to better results, whether in manufacturing, education,
or services.
2.​ Processes and Techniques - Efficient and standardized methods
improve consistency and quality.
3.​ Expertise - The skill, experience, and knowledge of the
individuals or teams involved are critical.
4.​ Environment - External conditions—like climate, market trends,
or infrastructure—can impact quality.
5.​ Feedback and Improvements - Continuously addressing
weaknesses or errors and incorporating feedback enhances
quality over time.
6.​ Tools and Technology - Advanced and well-maintained tools
ensure higher precision and better outcomes.

B2. INTERNAL VS. EXTERNAL QUALITY DETERMINANTS

Internal Quality Determinants - are factors within an
organization that directly influence the overall quality of output,
focusing on processes, techniques, and internal standards.

1.​ Focus on Processes

-​ Emphasizes improving internal processes
-​ Aims to enhance efficiency and reduce errors
-​ Involves establishing quality control mechanisms and adhering to
best practices

2.​ Employee Training and Skills

-​ component of maintaining internal quality
-​ Requires a well-trained workforce to produce consistent,
high-quality work
 -​ Necessitates regular training programs to update staff on new
technologies and standards

3.​ Tools and Technology

-​ Vital role in determining internal quality
-​ Requires investment in modern and efficient equipment
-​ Implementation of advanced software solutions to ensure
high-standard work

External Quality Determinants - are influenced by factors outside the

organization, primarily driven by consumer needs and market conditions.

1.​ Customer Feedback

-​ Significant aspect of understanding external quality
-​ Collected through surveys, reviews, and direct interactions
-​ Provides insights for necessary improvements
-​ Helps understand customer experiences and perspectives

2.​ Product Performance

-​ Focuses on how the product performs for the end-user
-​ Includes critical factors such as:
-​ Reliability
-​ Functionality
-​ Durability
-​ Ensures product meets expectations under various conditions

3.​ Brand Reputation

-​ Directly impacted by external quality perceptions
-​ High-quality products can:
-​ Enhance brand image
-​ Increase sales
-​ Build customer loyalty
-​ Poor external quality can significantly damage brand reputation

C. RESPONSIBILITY FOR QUALITY

C1. Role of employees, managers, and leadership in quality management

-​ Employees' Role
Execution: Directly involved in carrying out tasks and following
established procedures
Feedback: Provide valuable insights from their operational perspective
Continuous Improvement: Participate in training and upskilling to
maintain competitiveness
 Accountability: Take responsibility for work and adhere to quality
protocols

-​ Managers' Role
Supervision: Oversee daily operations and ensure compliance with
quality standards
Coordination: Bridge communication between leadership and employees
Problem-Solving: Address challenges promptly to maintain workflows
and quality
Performance Monitoring: Assess and improve quality metrics through
evaluation

-​ Leadership's Role
Vision and Strategy: Define goals and long-term plans focused on
quality excellence
Culture Building: Foster a quality-focused organizational culture
Resource Allocation: Provide necessary tools, training, and systems
Empowerment: Inspire ownership of quality and promote collaboration

C2. Importance of training and teamwork in ensuring quality

-​ Importance of Training
Skill Development: Equips employees with knowledge and expertise to
meet quality standards
Adaptation to Change: Ensures employees keep up with new
technologies, processes, and regulations
Consistency: Promotes standardized methods, reducing errors and
maintaining uniform quality
Empowerment: Boosts confidence, enabling ownership and informed
decision-making
Problem-Solving: Provides techniques to identify and address
quality-impacting issues

-​ Importance of Teamwork
Collaboration: Encourages exchange of ideas and expertise for creative
solutions
Accountability: Creates a culture where members uphold quality
standards together
Efficiency: Streamlines processes and shares workloads to enhance
output quality
Communication: Reduces misunderstandings and ensures alignment
with quality goals
Continuous Improvement: Enables collective assessment and
implementation of enhancements
D. CONSEQUENCES OF POOR QUALITY

Poor quality can significantly harm a business in multiple ways, including its reputation,
customer satisfaction, and financial performance

Consequences and Impacts:

1. Business Reputation:
- Poor quality can tarnish a company's image, making it hard to regain trust.
- Negative reviews and word-of-mouth spread quickly, deterring potential customers.

2. Customer Satisfaction:
- Low-quality products or services lead to dissatisfied customers, increasing complaints and
customer churn.
- A lack of trust in the company's ability to meet quality expectations can drive customers to
competitors.

3. Cost:
- Poor quality increases costs due to product recalls, refunds, repairs, or legal fees.
- Companies might have to invest heavily in damage control, such as rebranding or
advertising campaigns, to recover.

Real-Life Examples of Quality Failures:

1. Samsung Galaxy Note 7 Battery Explosions (2016):

Samsung faced a massive quality failure when the Galaxy Note 7's batteries were prone to
overheating and exploding. This led to a global recall of millions of devices.

Impact:
- Damage to brand reputation, with jokes and memes tarnishing the company's image.
- Losses estimated at over $5 billion.
- Customers lost trust in Samsung’s product safety, impacting future sales.

2. Toyota’s Accelerator Pedal Recall (2009-2010):

Toyota issued recalls for millions of vehicles due to sticky accelerator pedals that caused
unintended acceleration, resulting in accidents and fatalities.

Impact
- Over $2 billion in recall costs and legal settlements.
- A significant dent in Toyota's reputation for quality and reliability.
- Long-term customer doubt about the safety of their cars.
E. COST OF QUALITY

Types of quality costs

1. Prevention Costs
Costs incurred to prevent defects from occurring in products or services.

2. Appraisal Costs
Costs associated with measuring and monitoring products or services to ensure they meet
quality standards.

3. Internal Failure Costs

Costs incurred when defects are detected before the product or service is delivered to the
customer.

4. External Failure Costs

Costs incurred when defects are detected after the product or service is delivered to the
customer.

How Businesses Can Minimize Overall Quality-Related Costs:

1.Invest in Quality Management Systems:

- Implement standards like ISO 9001 to align processes with best practices.

2. Adopt Continuous Improvement Programs:

- Use methodologies like Lean, Six Sigma, or Total Quality Management (TQM) to eliminate
waste and reduce defects.

3. Focus on Employee Engagement:

- Encourage employees to take ownership of quality.
- Offer incentives for quality-related innovations.

4. Leverage Technology:
- Use predictive analytics and AI to detect potential issues early.
V. QUALITY AWARDS
Quality awards are given to organizations that demonstrate excellence in quality management
and business performance. These awards can be national, regional, or global.

Quality Awards recognize organizations that have achieved excellence in quality management.
These awards highlight companies that excel in leadership, strategy, customer focus, workforce
engagement, and continuous improvement. Winning a quality award enhances reputation and
competitiveness.

Examples of Quality Awards

1.Philippine Quality Awards.
The Philippine Quality Award (PQA) is the highest level of national recognition for exemplary
organizational performance in the Philippines. It is a government program established through
Republic Act No. 9013 (Philippine Quality Award Act of 2001) to promote performance
excellence, competitiveness, and quality management practices across various industries.

The PQA is based on the Malcolm Baldrige National Quality Award (MBNQA) framework and
assesses organizations in areas such as leadership, strategic planning, customer focus,
measurement and analysis, workforce engagement, operations, and results.

It is open to organizations from the private and public sectors, including manufacturing, service,
education, healthcare, and government institutions. The award is non-competitive, meaning
organizations are evaluated against set criteria rather than against each other.

Companies that have received the PQA award:

•Toyota Motor Philippines Corporation: Awarded the 2019 PQA for Performance Excellence,
acknowledging their outstanding quality management practices
•Unilab: Honored in 2008 with the Philippine Quality Award for Performance Excellence.

2.European Foundation for Quality Management (EFQM)

Established: 1991 by the European Foundation for Quality Management (EFQM).

Purpose: Recognizes organizations with outstanding TQM implementation.

Criteria: Leadership, People, Strategy, Partnerships, Processes, Customer Results, and

Business Performance.
VI. QUALITY CERTIFICATION
Quality Certifications ensure that organizations meet international quality standards and
continuously improve processes.

Quality Certification is a formal recognition that an organization meets specific quality standards.
It ensures that businesses follow systematic processes to maintain product and service quality.

Examples of Quality Certification

1.​ ISO 9001 CERTIFICATION

ISO 9001 is an internationally recognized standard for quality management systems (QMS),
developed by the International Organization for Standardization (ISO). It provides a structured
framework for organizations to ensure their products and services consistently meet customer
and regulatory requirements while improving overall performance.

2.SIX SIGMA CERTIFICATION

-Six Sigma is a data-driven approach to process improvement that aims to reduce defects and
increase efficiency. Developed by Motorola in the 1980s, it uses statistical tools to analyze and
improve business processes. The goal of Six Sigma is to achieve near-perfect quality with only
3.4 defects per million opportunities (DPMO).

Six Sigma Belt Levels

"Six Sigma uses a belt ranking system, similar to martial arts, to indicate expertise:"

White Belt – Basic understanding of Six Sigma.

Yellow Belt – Supports Six Sigma teams.

Green Belt – Leads small projects.

Black Belt – Leads major projects and trains others.

Master Black Belt – Expert who coaches Black Belts and Green Belts.
Benefits of Quality Awards and Certification;
1. Reputation and Credibility

-Enhances the company’s image and builds trust with customers, stakeholders, and business
partners.
-Differentiates the organization from competitors.

2. Increased Customer Satisfaction

-Demonstrates a commitment to high-quality products and services.

-Leads to improved customer trust and loyalty.

3.Competitive Advantage

-Helps attract new customers and retain existing ones.

-Opens doors to new business opportunities, including partnerships and contracts.

4.Financial Benefits

-Leads to increased revenue due to better customer retention and operational efficiency.
-Attracts investors by proving the company’s commitment to quality