Total Quality Management
- recalls

for the students in Marketing, Business and International Business courses taught by Prof. Tim Richardson
last updated 2014 March 28
This web page has audio clips - just click on the icon (like the one to the left) and you can hear Prof. Richardson's voice adding additional information to topics on the page. turn on your speakers to hear audio clips
INTRODUCTION In the 1980's and early 1990's, when many large Japanese companies set up manufacturing operations in North America they suffered from a competitive environment that caused people to think that North American goods were better in quality than Japanese goods. To address this public perception, Japanese companies sought manufacturing methods to produce goods with a very high level of quality so they could penetrate the market.

TQM was not invented in Japan, it was invented in the U.S., but it was used by the Japanese very effectively in the 1980's and the term has subsequently become associated with Japanese management principles.


http://en.video.sympatico.ca/news-info/top-stories/watch/-recall-issued-for-suvs/1743658935001/#.UD0QaHL7HMw When TQM is NOT followed diligently, companies may be in the position to "recall" their products.

Watch Prof. Richardson's interview w CTV news about a recall by Ford and the associated issues


http://www.youtube.com/watch?v=5w9j8-GPT0Y&feature=youtu.be A 1 min 27 sec intro to TQM by Seneca student Graham H. in March 2012

Graham's example is interestingly done in the context of improving his appearance for a job interview

Price proportionate to Quality
click to hear
Consumer perceptions of the Quality and the price they are willing to pay

Although many companies strive for Quality, it is not a simple thing, as the Dilbert cartoon below suggests. Quality has costs associated with it and the cost of obtaining very good quality is something that can make the subsequent product to expensive and not "price competitive".

Remember, for many large companies that are publically traded, the purpose is not to make and sell the best stuff, the purpose is to make and market the most competitive stuff which earns the highest revenue for the company and leads to profit for the shareholders.


Dilbert © by Scott Adams  www.dilbert.com
North American companies in the late 1980's and early 1990's got the marketing equivalent of a kick in the face from Japanese companies bringing in consumer products that were low prices AND high quality. 

U.S. companies sought to learn how Japanese did the TQM stuff - which is funny, cause the Japanese learned it from an American, Edwards Demming !


the slide above is from an old powerpoint by WTGR on Japanese management
http://www.youtube.com/watch?v=mLRnqC69c9Q&feature=related 15 minute intro to Demming by 
Prof. Kenneth Ragsdell
for his Engineering Management 375 course for the Missouri University of Science and Technology








..... Demming's 14 Point Plan for TQM
formerly at  http://www.educe.dabsol.co.uk/Quality/Q_Demming.htm
(listed, and expanded upon by Mr. Dave Wilson)
  • Point 1: Create constancy of purpose toward improvement of the product and service so as to become competitive, stay in business and provide jobs.
  • Point 2: Adopt the new philosophy. We are in a new economic age. We no longer need live with commonly  accepted levels of delay, mistake, defective material and defective workmanship.
  • Point 3: Cease dependence on mass inspection; require, instead, statistical evidence that quality is built in.
  • Point 4: Improve the quality of incoming materials. End the practice of awarding business on the basis of a price alone. Instead, depend on meaningful measures of quality, along with price.
  • Point 5: Find the problems; constantly improve the system of production and service. There should be continual reduction of waste and continual improvement of quality in every activity so as to yield a continual rise in productivity  and a decrease in costs.
  • Point 6: Institute modern methods of training and education for all. Modern methods of on-the-job training use  control charts to determine whether a worker has been properly trained and is able to perform the job correctly.  Statistical methods must be used to discover when training is complete.
  • Point 7: Institute modern methods of supervision. The emphasis of production supervisors must be to help people to  do a better job. Improvement of quality will automatically improve productivity. Management must prepare to take immediate action on response from supervisors concerning problems such as inherited defects, lack of maintenance  of machines, poor tools or fuzzy operational definitions.
  • Point 8: Fear is a barrier to improvement so drive out fear by encouraging effective two-way communication and  other mechanisms that will enable 'everybody to be part of change, and to belong to it'. Fear can often be found at all   levels in an organisation: fear of change, fear of the fact that it may be necessary to learn a better way of working and fear that their positions might be usurped frequently affect middle and higher management, whilst on the  shop-floor, workers can also fear the effects of change on their jobs.
  • Point 9: 'Break down barriers between departments and staff areas. People in different areas such as research, design, sales, administration and production must work in teams to tackle problems that may be encountered with products or service'.
  • Point 10: 'Eliminate the use of slogans, posters and exhortations for the workforce, demanding zero defects and  new levels of productivity without providing methods. Such exhortations only create adversarial relationships
  • Point 11: 'Eliminate work standards that prescribe numerical quotas for the workforce and numerical goals for  people in management. Substitute aids and helpful leadership
  • Point 12: Remove the barriers that rob hourly workers, and people in management, of their right to pride of  workmanship. This implies, abolition of the annual merit rating (appraisal of performance) and of management by  objective
  • Point 13: 'Institute a vigorous programme of education, and encourage self-improvement for everyone. What an   organization needs is not just good people; it needs people that are improving with education.
  • Point 14: Top management's permanent commitment to ever-improving quality and productivity must be clearly  defined and a management structure created that will continuously take action to follow the preceding 13 points."


.... The history of how Japanese came to be the evangelists of TQM - and how the Americans tried to catch up
" During the mid 1980s, U.S. producers who complacently held the market share for so long after World War II were now starting to lose market share to the Japanese. After World War II, the Japanese had embraced statistical quality control, taught to them by American lecturers including Dr. Demming and others who had been invited to Japan, to help them convert from military to commercial production and reverse the reputation of poor quality goods."

"TQM has been  offered as the reason for the success of Japanese business by many observers, and Japanese versions of TQM have been shipped back not only to  the US and the Americas, but also Europe. Following massive Japanese investment in other countries such as Thailand, and Singapore saw TQM  become popular expecially in those countries where Japanese investment was substantial. Japanese management expertise often came accompanied with TQM, and it also offered a way to manage diverse business systems and  investments for the Japanese owners. However implementation has not always been successful..." 


.... An interesting rant about how, to some, TQM is bad for North Americans

"TQM was the brainchild of the late W. Edwards Deming; it supposedly helped Japan with its postwar economic recovery. But perhaps that was because it meshed with Japanese culture. It does not follow that TQM is a good fit for organizing America...."Quality" sounds like goodness, pure and simple. But with TQM, quality is not the product but the process. To institute the process, corporate trainers must bring about a "total cultural change," wherein all
employees shed their individualism for a unified set of corporate values. Workers undergo hours of group training before they blend into the TQM process.... To tell employees upfront they must adopt an entirely new way of thinking can be frightening..."

TQM Tim Richardson -  1998 speech

"TQM worked well in a homogenous culture such as Japan, but the challenge to apply TQM in North America is a multi-cultural workforce and a high Individualism Index..."

TQM was considered, by the Americans in the mid 1990's, so important to understand, and try to apply to keep up with the Japanese, that they even taught the concept in the U.S. military.

check Naval War College Notes: 
(link dead 2005) www.nwc.navy.mil/library/3Publications/Eccles%20Library/LibNotes/libtql.htm


Prof. W. Tim G. Richardson © www.witiger.com