8 Steps in Total Quality Management

Step 1: Identification of customers/customer groups: Through a team approach (a technique called Multi-Voting), the Firm should identify major customer groups. This helps in generating priorities in the identification of customers and critical issues in the provision of decision-support information.

Step 2: Identifying customer expectations: Once the major customer groups are identified, their expectations are listed. The question to be answered is - What does the customer expect from the Firm?

Step 3: Identifying customer decision-making requirements and product utilities: By identifying the need to stay close to the customers and follow their suggestions, a decision support system can be developed, incorporating both financial and non-financial and non-financial information, which seeks to satisfy user requirements. Hence, the Firm finds out the answer to - What are the customer’s decision-making requirements and product utilities? The answer is sought by listing out managerial perceptions and not by actual interaction with the customers.

Step 4: Identifying perceived problems in decision-making process and product utilities: Using participative processes such as brainstorming and multi-voting, the Firm seeks to list out its perception of problem areas and shortcomings in meeting customer requirements. This will list out areas of weakness where the greatest impact could be achieved through the implementation of improvements. The Firm identifies the answer to the question - What problem areas do we perceive in the decision-making process?

Step 5: Comparison with other Firms and bench-marking: Detailed and systematic internal deliberations allow the Firm to develop a clear idea of their own strengths and weaknesses and of the areas of most significant deficiency. Bench marking exercise allows the Firm to see how other Companies are coping with similar problems and opportunities.

Step 6: Customer Feedback: Steps 1 to 5 provide a information base developed without reference to the customer. This is rectified at Steps 6 with a survey of representative customers, which embraces their views on perceived problem areas. Interaction with the customers and obtaining their views helps the Firm in correcting its own perceptions and refining its processes.

Steps 7 & 8: Identification of improvement opportunities and implementation of Quality Improvement Process: The outcomes of the customer survey, bench-marking and internal analysis, provides the inputs for Steps 7 and 8, i.e. the identification of improvement opportunities and the implementation of a formal improvement process. This is done through a six-step process called PRAISE, for short.

The reason quality has gained such prominence is that organizations have gained an understanding of the high cost of poor quality. Quality affects all aspects of the organization and has dramatic cost implications. The most obvious consequence occurs when poor quality creates dissatisfied customers and eventually leads to loss of business.Integrating various processes of the business into “a whole” was at the basis and thus a true system approach to business. Such thinking resulted into a new practice which came to be known as the “Total Quality Management” (TQM). To get an insight into this concept, you need to understand that no-business process can work in isolation. Interdependence and an interaction between each of the business processes exist, and must be addressed while operating a business.Quality management is defined as “coordinated activities to direct and control an organization with regard to quality”(ISO 9000:2000). The activities are normally integrated into a system. This is known as the systems approach to managing quality and the same approach needs to be adapted to business operations. Starting from early 60s and migrating to the 70s, the practices of quality management have shown an evolution

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