What Is Quality Management?
Quality management encompasses the oversight of all essential activities and tasks required to maintain a desired level of excellence. Key components include establishing a quality policy, implementing quality planning and assurance, and conducting quality control and improvement processes. This holistic approach is often known as total quality management (TQM).
In essence, quality management focuses on achieving long-term objectives through the execution of short-term initiatives.
Investopedia / Jessica Olah
Key Takeaways
- Quality management involves overseeing all activities necessary to uphold a desired level of excellence.
- Crucial aspects of quality management include establishing a quality policy, executing quality planning and assurance, and implementing quality control and enhancement practices.
- TQM necessitates collaboration among all stakeholders within a business to enhance processes, products, services, and the overall organizational culture.
Understanding Quality Management
At its core, total quality management (TQM) serves as a business philosophy that prioritizes customer satisfaction and loyalty as fundamental drivers of long-term organizational success. TQM emphasizes the collective effort of all stakeholders within a business to streamline processes, enhance products, services, and cultivate a conducive corporate culture.
Although total quality management may seem like a straightforward concept, it emerged as a groundbreaking idea. The 1920s witnessed a surge in the application of statistics and statistical theory in business operations. The advent of the first control chart in 1924 marked a significant development, leading to the evolution of statistical process control (SPC). However, successful integration of these principles into business practices only materialized in the 1950s.
Amid a challenging industrial economic landscape in Japan, characterized by low-quality products and perceived high illiteracy rates among citizens, key Japanese enterprises recognized the need for transformation. Drawing inspiration from statistical thought leaders, pioneering companies like Toyota incorporated quality management and control mechanisms into their production processes.
By the late 1960s, Japan underwent a notable turnaround, emerging as a prominent exporter renowned for its efficient processes and superior products. Effective quality management practices not only led to enhanced product quality but also enabled cost-efficient production methods.
Real-World Example of Quality Management
A prominent illustration of total quality management is exemplified by Toyota’s adoption of the Kanban system. The Kanban, a physical signaling device triggering a specific action, was employed by Toyota to spearhead its just-in-time (JIT) inventory approach. To optimize its assembly line efficiency, Toyota adopted a strategy of maintaining minimal inventory levels required to fulfill customer demands promptly.
Each component on Toyota’s assembly line is associated with a physical card denoting an inventory number. As a part is ready for installation in a vehicle, its corresponding card is forwarded up the supply chain, signaling the need for replenishment. This lean inventory strategy enables Toyota to minimize surplus resources and operate efficiently.