Total Quality Management vs Six Sigma
Total Quality Management vs Six Sigma
Organizations and companies around the world have been challenged by international competition. Competition of products, and services, have put companies under pressure to over perform each other in different industries. Companies have transformed their business practices radically to enhance their organization's business performance. During this transformational change period, many new concepts and methods have been evolved and these methods have been implemented by few companies. Quality has become one of the most important factor for measuring success in an organization. But what stands the test of time are TQM and Six Sigma which are core principle and foundations, that have been implemented over the last few decades is to improve quality standards of the organization's product, service or the process
improvements, by making better performance. But before these two became the standard of measuring quality there were several others very similar but each had a different approach to certify quality.
There are various similarities and difference between Total Quality Management and Six Sigma but what remains is the validity and purpose of these practices in the business world. But first we have to understand the idea of quality management. According to ASQ definition of Quality Management, it is the “system in managing a process to achieve maximum customer satisfaction at the lowest overall cost to the organization while continuing to improve the process.” (ASQ) interestingly as well Foley defines it as, management revolution, a paradigm shift, to a new way of thinking about management of organization to improve the total organization performance”
(Foley 2004). Both TQM and Six Sigma differ in quality management because an organization vision about is based on the judgement of the area of process. Total Quality Management is defined “as a management system that consists of values, methodologies and tools to increase external and internal customer satisfaction by utilizing reduced resources by constantly evolving the processes” (Hellsten and Klefsjo, 2000). Six Sigma is defined “as a business process that allows organizations to improve by monitoring everyday business activities by increasing customer satisfaction and reducing waste and utilizing less resources” (Magnusson 2003).
Quality Management Ideas
Total Quality Management, is a strategy in which an entire organization is focused on continuous improvement. It focuses on quality planning, quality control and improvements. Quality planning is a series of that establishes projects, discover customer needs to develop products processes and controls. Quality Management as its own entity is described by Anttila at the International Academy for Quality (IAQ) states that “it is the responsibility of business leaders and it is taking place through the managing actions of business leaders.” There are two parts to this idea, one management system of an organization and second quality.
Quality is measured and “characterized to a degree ti fulfills the needs and expectation of an organizations.” The Top four principles of excellent management practices are based of ISO 9000, Malcomb Baldrige Core Values, EFQM, and finally Total Quality Management. Interestingly the core views off all these mentioned references are focused around seven fundamental principles of how to manage organizational excellence. These seven provided by the (IAQ) are “Centering on customers' needs and expectations individually, Envisioning the future challenges, valuing employee, managing the organization as a system of responsive and agile business processes, discovering, collaborating and learning for enhancing the business performance, valuing partners and finally responding to the needs and expectations of the modern society.
In all of these, Quality work is vital in business environments. “Many kinds of activities may exist in the complex responsive processes of relating. Appropriate management actions should be selected based on the degree of certainty and agreement on the issue of management. (Stacey, 2002/2003). The different Quality Management environments that could possibly uphold practices are those who are in unconventional businesses which are usually unplanned, and emerging corporations. Business environments that focused on Quality Assurance over Quality management measures “which both customers as well as other interested parties (stakeholders) are convinced… and requirements pertaining to products are met.” With these means an organization may at volition that it may individually to fulfil “Quality Assurance needs of separate stakeholders.” Regardless this set in motion of what TQM is capbale of and based its foundation in TQM business around the globe. The purpose of this paper is to evaluate and analyze Total Quality Management and Six Sigma's approach and how these concepts are applicable in today's modern business world.
Total Quality Management
Today TQM or Total quality management is often associated with “development, deployment and maintenance of organizational systems.” (Aveta Business Institute) As early as the 1920s TQM was initiated as statistical theory in product quality control. In the 1920s, “Dr W. She what developed the application of statistical methods to the management of quality.” It further developed in the 1940s arose in in response to Japanese competition and the work of W. Edwards Deming and was made popular in the 1990s. As an American quality theorists, he advised the Japanese industry on how to improve processes and output to rebuild their war-shattered economy. The Japanese industrial leaders saw that their products were seen as cheep products and they wanted to improve that notion. They brought on industry minds many today recognize as Deming, Juaran and Feigenbaum. Feigenbaum mentioned the idea of ‘total quality ‘in a paper and it somehow stuck as it represented “company-wide quality control' that involves all employees, from top management to the workers” “However, when it was conceptualized, it was not intended to be a replacement precedent for TQM” (SixSigmaOnline)
In the 1980s after viewing Japans success in quality, the United States and the companies at home wanted to introduce their own quality initiatives. Congress established the Federal Quality Institute in 1988 to support the need for quality management in business and reward organizations for successful implementations. (ASQ) Soon after based on Feigenbaum's phrase “Total Quality” TQM or Total Quality Management was developed as a phrase for the broad spectrum of Business quality techniques and it became the center of focus in American manufacturing.
A regular meaning of Total Quality Management incorporates expressions, for example, client center, the inclusion of all representatives, persistent change and the coordination of value administration into the aggregate association. In spite that the definitions were all comparable, there was a slight confusion. It was not clear what kind of practices, arrangements, and exercises should have been actualized to fit the Total Quality Management definition. Quality management has evolved over the years to incorporate the quality standards within an organization on its products, services and business process. Hellsten and Klefsjo defined Total Quality Management as “a management system that consists of values, methodologies and tools to increase external and internal customer satisfaction by utilizing reduced resources by constantly evolving the processes”.
Total Quality Management today is how it describes how organizations should perform and obtain customer satisfaction. Quality Management is a “holistic approach to long-term success that views continuous improvement in all aspects of an organization as a process and not as a short-term goal. It aims to radically transform the organization through progressive changes in the attitudes, practices, structures, and systems.” (Business Dictionary) One of the goals of Total Quality Management is lowering costs and increase revenues and improve customer satisfaction. Total Quality Management also pushes the boundaries as to reducing costs by lowering errors and mistakes and streamlining the production process so that it is efficient as possible.
The second objective of TQM is to increase revenues. Revenues are increased by improving quality of the product or service. Higher quality products have a higher price tag customers are willing to pay for. They see that the price is equivalent to the quality of the product of service. For example, the iPhone is an expensive mobile device of a price tag of upwards of $700, people see that as a product that has lived up to its price because of the quality and the engineering of the product of a solid high quality device. High pricing on products and services, companies can deliver such quality because the customers expect that kind of service. Usually higher quality leads to satisfied customers which is the third goal of TQM. So much of consideration is taken when producing a product so that the duration of the life the product is expected to last in the hands of the consumer. The consumer is usually repeat and companies are able to retain old customers for life and increase market share of the product.
The three fundamental concepts of TQM includes customer focus, continuous improvements, and value of every associate. Customer focus has been the fundamental concept at TQM after all, the organization exists only to deliver products and services to customers. In TQM, the organization aims to approach its results by constantly restructuring its process by continuous improvements. Since TQM approach is to improve continuous improvements in every area of the organization, every associate in the organization are expected to improve the existing improvements.
The three-critical process utilized at TQM are quality planning, quality control and quality improvements. Quality planning consist of series of events that includes establish projects, identify customers, discover customer's needs, develop product, develop process and develop control. Quality planning helps in determine the quality performance with in its existing process this helps to detect the major deviation from the planned level of performance. The quality management infrastructure includes the elements that supports the infrastructure of TQM this includes, quality system, customer supplier partnership, total organization involvement, measurement, information, education and training.
The primary goal of Six Sigma is to satisfy customers. Customer satisfaction has become of the key goal for many industries who implemented Six Sigma by reducing variations within their existing processes. “The Six Sigma methodology is not a revolutionary way of thinking, and it does not provide a radically new set of quality tools.” In 1980s Motorola executives had written “research report on the new quality management system that emphasized the interdependence between a product's performance in the market and the adjustments required at the manufacturing point.” (Six Sigma Online) The report measured each stages of product as it got better the performance improved. The importance of customer satisfaction achieved through product and service quality has acknowledged as a “major factor contributing to competitive advantage” (Issac et. al. 2006; O'Brien 1991). They had developed a four stage measures of Measuring Analyze, Improve and Control that soon became the foundation what is known as Six Sigma today. Six Sigma initiative is designed to change the culture of an organization improving all aspects of the business (Yang 2004). Six Sigma is used in marketing, research, development, banking and other business industries.
One significant use of Six Sigma is in the Software Industry, especially in India. About 75% of the software companies in India are subcontracted for development and maintenance by clients like Citibank, Deutsche Bank, North West Airlines, Swissair, Lufthansa, Oracle, Novel and many other multinational corporations. (NASSCOM-Mc Kinsey Report 2005) Companies are in pursuit of quality of near perfection when developing these software's that companies that match and build of the Six Sigma method are “focused on customer needs, data-driven improvements and, the inputs of the process resulting in reducing or eliminating defects, reducing process variation and increasing process capability.” (Murugappan and Keeni 2000)
Today there are two versions of Six Sigma. Six Sigma DMAIC and Six Sigma DMADV. The DMAIC approach is a is “improvement system for existing processes falling below specification and looking for incremental improvement” using the steps define, measure, analyze, improve, control. And The Six Sigma DMADV is an “improvement system used to develop new processes or products at Six Sigma quality levels” using the steps to define, measure, analyze, design, verify. (isixsigma.com)
The key components of Six Sigma lies with the organization's management involvement, infrastructure, statistical tools, organization, and training. (Henderson and Evans, 2000). George Eckes from General Electric used Six Sigma to revolutionize his business. Eckes claims that the infrastructure plays a key role as it serves as the model for improvements. The CEO of General Electric, Jack Welch credits the Six Sigma initiative with raising the company's operating profit margins. GE Medical Systems recently introduced a $1.25 million diagnostic scanner, increased production of plastic by 1.1 billion pounds, and increased production influenced acquisition of the contract for the coverings of the new Apple product, iMac. (Eckes) GE was able Define, the customers their requirements, then Measure, they collected data to execute the plan of action. Then they analyzed the collected data for process. Then they Improved, generating and determined potential solutions to improve process performance and finally Control, to develop document and implement a plan to ensure that the performance achieved remains from now on.
Compare and Contrast
They are many key similarities exists between Total Quality Management and Six Sigma. This section compares and contrast the similarities and difference with each process based on origin, theory, process view, approach, methodology, tools, goal and critics. Both Total Quality Management and Six Sigma origin was founded for improving quality. “Total quality management does reach to a saturation level after a certain period.” Quality has led many companies to diverge to implement quality program that lead to quality change on its products and services.
Theory: The outcome of the both the approaches is to increase customer satisfaction. Both program utilizes different approach to reach the objective. The total quality management reaches its objective by focusing on its customers by constantly evolving the process whereas the sis sigma reaches its objectives by focusing on its customers by reducing the variations with in the process to reduce the defects. Both these process are constantly monitoring there existing processes by utilizing less resources and by improving the performances.
Process view: One of the key similarities between both the processes is that both process wants to improve the existing process by constantly monitoring the process. Total Quality Management wants to improve the process and uniform the process once the process has been established. Once the uniform process has been established, the existing uniform process is constantly monitored to improve the process to form new process. The change in process is inevitable with Total quality management. Whereas, in six sigma, the process view is to reduce the variation with in the process with no defects and to improve the existing process. This process is constantly monitored throughout the process to improve the existing process. In six sigma, the improvement projects are conducted at different levels of complexity to reduce the defects and to reduces the variations
Approach: The approach of the both concepts within the organization is very different. In Total Quality Management approach, every member of the organization is required to be the part of quality change. Every member is expected to make constant changes in every field and improve the existing process. The term Total Quality Management itself describes how quality is viewed and expected by every member within an organization. On the other hand, six sigma, not everybody in an organization is expected to be committed to the process. It is only the top managements and the project management team that are expected to be involved with in the process to make changes within an existing process.
Methodology: Total Quality Management and Six sigma has two different methodologies on their approach towards change. Total Quality Management uses PDSA methodology which have four stages that are plan, do, study and act whereas six sigma methodology has five stages which include define, measure, analyze, improve, and control.
Tools: Both Total Quality Management and six sigma uses extensive data model to gather data from various sources within an organization. Both approaches utilize analytical and statistical data to plan, measure and analyze to carry out the process within existing process but six sigma utilizes advanced statistical tools to make decision on its existing process. Six sigma theory is to make defects within the existing process with reduced variation. This outcome can be achieved only with advanced statistical approach.
Goal: The primary goal of both the process differs in terms of its approach. The primary goal of Total Quality Management is to increase customer satisfaction whereas the primary goal of six sigma is to save money by reducing the costs on its existing process. Total quality management wants to increase its customer satisfaction by achieving customer loyalty and by improving performances whereas for the six sigma it was more to achieve business performance goals and improves it financial performances by reducing the costs of its existing process. Reduced costs is increase in revenues which in turn leads to higher quality of the products and services.
Criticism: Klefsjo claims that even though TQM and six sigma has same common features but the concepts have different approach. In contrast, six sigma is a highly data-oriented, disciplined, top-down approach which typically includes five stages define, measure, analyze, improve and control whereas TQM includes four stages plan, do, study and act. Six sigma process relies much on the statistical data. Statistical tools are used to reduce variations with in process to focus on results to produce the customer satisfaction. TQM has no tangible improvements and the process is resources demanding and it has no unclear notion with its existing process. Whereas, six sigma does not involve everybody within an organization and it does not improve the customer satisfaction up to a level and it has no system view in approaching a process.
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