What is a term often used to describe comprehensive efforts to monitor and improve all aspects of quality within a firm?

What are they?

Frameworks

According to the UK’s Chartered Quality Institute, the only true measure of acceptable quality is customer satisfaction, which takes into account both objective and subjective interpretations of the needs and expectations of customers.

Quality management involves planning and controlling activities to ensure that the product or service is fit for purpose, and meets design specifications and the needs of customers, according to a CIMA Official Study Text.

Traditionally, quality management focused on quality control, where finished goods were inspected and tested, and substandard ‘waste’ product disposed of or sold at a lower price. However, contemporary thinking rejects this approach as inefficient and profit-draining. As a result, several tools and philosophies have been developed that aim to focus on and eliminate waste entirely.

Cost of Quality (CoQ)

According to CIMA Official Terminology, CoQ is the difference between the actual cost of producing, selling and supporting products or services and the equivalent costs if there were no failures during production or usage. The cost of quality can be analysed into:

• cost of conformance – cost of achieving specified quality standards
• cost of prevention – costs incurred prior to or during production in order to prevent substandard or defective products or services from being produced
• cost of appraisal – costs incurred in order to ensure that outputs produced meet required quality standards
• cost of non-conformance - cost of failure to deliver the required standard of quality
• cost of internal failure – costs arising from inadequate quality which are identified before the transfer of ownership from supplier to purchaser
• cost of external failure – costs arising from inadequate quality discovered after the transfer of ownership from supplier to purchaser.

Total Quality Management (TQM)

CIMA Official Terminology describes TQM as the integrated and comprehensive system of planning and controlling all business functions so that products or services are produced which meet or exceed customer expectations. TQM is a philosophy of business behaviour, embracing principles such as employee involvement, continuous improvement at all levels and customer focus. It is also a collection of related techniques aimed at improving quality – such as full documentation of activities, clear goal-setting and performance measures from the customer perspective.

Originally developed in Japan in the 1950s, the aim of TQM is to get things ‘right first time’, an approach that increases prevention costs, such as system design, but helps to prevent internal and external failure costs. There is an emphasis on participation throughout the value chain, and a commitment to continuous improvement through constant reassessment of processes.

Kaizen

CIMA Official Terminology describes Kaizen as a Japanese term for continuous improvement in all aspects of an entity’s performance, at every level.

The philosophy of Kaizen seeks to involve all levels of employees, encouraging suggestions for small incremental improvements across all areas of the business which over time have a major impact. In a manufacturing context, processes are standardised, assessed and then improved, with the ultimate result being decreased waste and increased productivity.

Six Sigma

CIMA Official Terminology describes Six Sigma as a methodology based on TQM to achieve very low defect rates. The ‘sigma’ refers to the Greek letter used to denote standard deviation, so ‘six sigma’ means that the error rate lies beyond six standard deviations from the mean. To achieve six sigma, an organisation must therefore produce not more than 3.4 defects per million products.
In practice, businesses use techniques such as statistical process control to monitor and chart processes, identifying exceptions to the upper and lower limits and aiming to reduce the number of faults.

EFQM Excellence Model

The EFQM model is a framework for management systems, developed by the European Foundation for Quality Management. It aims to assess performance; integrate and align existing tools, procedures and processes; introduce a way of thinking that encourages reflection and stimulates continuous improvement; and identify the key actions that are driving results.

A key feature of the model is a diagnostic framework that allows organisations to grade themselves against nine key criteria. These focus on the cause and effect relationship between how an organisation carries out its actions (enablers), and what these achieve (results).

What benefits do Quality Management Tools provide?

An effective quality management programme leads to higher quality processes and outputs. These in turn lead to greater customer satisfaction and improved profitability. Quality management encourages a culture of team working at all levels of the organisation, which in turn improves productivity. Human resources are recognised as a key organisational asset. Lower costs of failure, combined with shorter processing times, will result in cost savings.

Questions to consider when implementing Quality Management Tools

• How do we measure quality?
• Are senior management fully committed to the quality concept?
• Can we ensure buy-in across the organisation?
• What training will staff require?

Related and similar practices

• Quality circles
• 5-S
• ISO 9000

What is the term often used to describe comprehensive efforts to monitor and improve all aspects of quality within a firm?

Which of these refers to the values that help us determine appropriate standards of behavior and place limits on our behavior both inside and outside the organization?

Which term best describe decisions that are routine?

Which of the following describe an individual's intellectual capabilities and are closely linked to how a person makes decisions and processes information?