TQM & Cost

Lecture 7

Total Quality Management & Cost

Total quality management is an effective system for integrating the quality development, quality-maintenance, and quality-improvement efforts of the various groups in an organization so as to enable marketing, engineering, production, and service at the most economical levels which allow for full customer satisfaction.

The content and its essentiality to the achievement of business results make total quality control a new and important area of management. As a focus of managerial and technical leadership, total quality control has produced outstanding improvements in product quality and reliability for many organizations throughout the world Moreover, total quality control has achieved progressive and substantial reductions in quality costs.
Through total quality control, company managements have been able to deal from strength and confidence in the quality of their products and services, permitting them to move forward in market volume and product mix expansion with a high degree of customer acceptance and profit stability and growth.
Total quality control provides the fundamental basis of positive quality motivation for all company employees and representatives, from top management through assembly workers, office personnel, dealers, and service people. And a powerful total-quality-control capability is one of the principal company strengths for achieving vastly improved total productivity.

Core Idea behind TQM

Customer focus

Leadership involvement

Continuous improvement

Employee empowerment

Quality assurance

Supplier partnership

Strategic quality plan

TQM Cost

Various kind of cost incurred in TQM are as follows:

Internal Failure CostExternal Failure Cost

Appraisal Cost

Prevention Cost