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One impetus for total quality management in the United States is the increasing significance of the global econ-
omy. Many countries have endorsed a universal framework for quality assurance, called ISO 9000.
TQM TECHNIQUES
The implementation of total quality management involves the use of many techniques. Most companies that have
adopted TQM have incorporated quality circles, empowerment, benchmarking, outsourcing, reduced cycle time, and
continuous improvement.
QUALITY CIRCLES. One approach to implementing a total quality philosophy and engaging the workforce in a
decentralized approach is that of quality circles (QCs). A quality circle
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is a group of from 6 to 12 volunteer employ-
ees who meet regularly to discuss and solve problems affecting their common work activities. Time is set aside during
the workweek for these groups to meet, identify problems, and try to find solutions. The key idea is that people who do
the job know it better than anyone else and can make recommendations for improved performance. QCs also push con-
trol decision making to a lower organizational level. Circle members are free to collect data and take surveys. In many
companies, team members are given training in team building, problem solving, and statistical quality control to enable
them to confront problems and find solutions more readily. The groups do not focus on personal gripes and problems.
Often a facilitator is present to help guide the discussion. Quality circles use many of the teamwork concepts. The qual-
ity circle process begins with a selected problem and ends with a decision given back to the team.
The quality circle concept spread to the United States and Canada from Japan. It had been developed by Japanese
companies as a method of gaining employee commitment to high standards. The success of quality circles impressed
executives visiting Japan from Lockheed, the first company to adopt this practice. Many other North American compa-
nies, including Westinghouse, Digital Equipment, and Baltimore Gas & Electric Company, have since adopted quality
circles. In several of these companies, managers attest to the improved performance and cost savings. Westinghouse has
more than 100 quality circles; a single innovation proposed by one group saved the company $2.4 million. To build on
these successes, Westinghouse created the Productivity and Quality Center that assists departments throughout the
company. It acts as a SWAT team of sorts to help divisions do the same work in half the time with better quality results.
An alternative to the quality circle, which can be established within the traditional hierarchical structure, is the
web, which utilizes today's primary technology (integrated computer networks) and better serves the structural integrity
of today's decentralized organization. Solutions are achieved through the inclusive sharing of information throughout
the organization and across functions, departments, and even regions. As technology speeds the need for instant deci-
sion-making and as decision-making is increasingly pushed down to frontline workers, it is crucial that individual au-
thority be enhanced with the best, up-to-the-minute information.
EMPOWERMENT. A significant trend within organizations adopting TQM is the empowerment of employees,
suppliers, and customers in the decision-making process, reflecting dramatic changes in technology and environment.
As companies reduce staff and layers of management, offer alternative work options (such as telecommuting, job shar-
ing, or the creation of a mobile workforce), or shift tasks to suppliers or outside organizations, managers need to share
rather than hoard information. Likewise, as customers increase their product sophistication levels and their demands for
higher quality, organizations are recognizing the need for customer inclusion in the information loop by providing
product and service information and developing interactive relationships between the company and the customer. For
example, companies are discovering the wisdom of empowerment through customization. Automakers such as Volvo
and BMW are abandoning finished-product inventories in favor of build-to-order. Customers order a customized car
with options designed to meet their needs and personal taste. The information is instantly relayed to the factory, where
the car is assembled and shipped within two to three days.
BENCHMARKING. Introduced by Xerox in 1979, benchmarking is now a major TQM component. Bench-
marking
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is defined by Xerox as "the continuous process of measuring products, services, and practices against the
toughest competitors or those companies recognized as industry leaders." The key to successful benchmarking lies in
analysis. Starting with its own mission statement, a company must honestly analyze its current procedures and deter-
mine areas for improvement. As a second step, a company must carefully select competitors worthy of copying. For
example, Xerox studied the order fulfillment techniques of L. L. Bean and learned ways to reduce warehouse costs by
10 percent. Companies can emulate internal processes and procedures of competitors, but with caution. For example, a
small company may court failure by copying the "big boys" such as Ford or Xerox whose methods are incompatible
with a small-company situation. Once a strong, compatible program is found and analyzed, the benchmarking company
can then devise a strategy for implementing a new program.
OUTSOURCING. One of the fastest-growing trends in U.S. business is outsourcing
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, the farming out of a com-
pany's in-house operation to a preferred vendor with a high quality level in the particular task area. Companies such as
B. F. Goodrich and Glacxo Pharmaceuticals have latched on to outsourcing as a route to almost immediate savings and
quality improvement. Traditional in-house operations can be farmed out to save costs on employee benefits, to reduce
personnel, and to free existing personnel for other duties. For example, banks have outsourced the processing of credit
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Quality circle (QC) A group of 6 to 12 volunteer employees who meet regularly to discuss and solve problems that affect
their common work activities.
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Benchmarking The continuous process of measuring products, services, and practices against the toughest competitors or
those companies recognized as industry leaders.
24
Outsourcing The farming out of a company's in-house operation to a preferred vendor.
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