Cost Reduction and Increased Profitability: What Are The Benefits of Total Quality Management?

What are the Benefits of Total Quality Management?
Some of the Benefits of Total Quality Management are:
1. Cost Reduction and Increased Profitability

TQM helps in reducing total quality costs. It is based on the principle of preventing
defective products/services rather than being at an expense of quality failure cost. So
basically, it aims to manufacture zero defect products/services. Consequently, this brings
in cost reduction and thus increased profitability. Many companies such as Toyota
Motors and Motorola have bought in manufacturing cost reductions by implementing
TQM techniques.
2. Facilitates Productivity
Cost reduction is a means of increased productivity. Productivity implies maximum
output with optimum utilization of resources. Thus, the superior quality of resources and
infrastructure, high-end technology and competent employees enhance productivity.
3. Reduces Redundant Activities

TQM applies a systematic approach by assigning quality improvement teams so as to
reduce unessential tasks, waste of resources, thus, bringing in efficiency. This also saves
time and duplication of tasks.
4. Promotes Innovation Process

TQM enables the organizations to conduct research on any undergoing challenges/
problems so as to come up with solutions for the same. Thus, organizations escalate
their research and bring in innovative marketing decisions. The implemented innovative
approach to the core and peripheral services attracts the customers.
5. Market-Specific Products/Services
Since the main focus of TQM is on customer satisfaction, it provides a pathway to
understand the needs and demands of the consumer market. Therefore, it enables the
organization to deliver products/services specific to the market.
6. Holistic Approach to Management

Many organizations struggle with non-engaging and non-participative attitude of the
employees. TQM enables to bring changes in the behavioral pattern of the employees
by facilitating good work culture, team-work, promoting self-development, employee
engagement and thus extracting better performance.
7. Promotes Continual Improvement

The basic fundamental of TQM is of continually improving for long-term success.
Therefore, TQM practices are designed to bring in continual improvement to the quality
standards of a product/service. This results in a continuous revival of processes.
8. Facilitates Competitive Edge

The increasing competition challenges the organization to meet the ever-increasing
demands of the consumer market. TQM practices prove useful in understanding the
market trends and competition so as to develop effective strategies to overcome the
same.
9. Promotes Good-Will
As TQM focuses on consistent delivery of good quality product/services, the consumers
hold favorable reputation about the organization. The internal stakeholders (employees
and investors) get lucrative incentives and good returns respectively, while external
stakeholders (customers) get superior quality of goods. This results in a good brand
image and goodwill in the long run.
10. Facilitates Effective Communication and Employee Morale

Often, improper and ineffective communication are a hindrance to the proper
functioning and development of an organization. This results in improper
understanding, low productivity, inferior quality, waste of time and efforts, thus
contributing to low morale. Whereas, TQM facilitates effective communication and
interaction within members of different departments and hierarchies of management.
This boosts employee morale and team-work.
11. Facilitates Customer Satisfaction

Since TQM is all about delivering a superior quality of products/services to the
customers in the long run, the amount of customer complaints is quite less. Therefore, it
signifies less use of resources and increased customer satisfaction. Thus, the market
share also increases as the existing customers act as the ambassadors to attract new
customers.
Therefore, it is obvious that TQM not only brings in tangible results like superior product
quality, reduction in costs, increased profitability, increased market share, and
productivity. But, also, intangible returns like better communication, teamwork,
employee engagement, customer satisfaction, goodwill, and increased employee
morale. However, TQM also requires employees to undergo a substantial duration of the
training period, company-wide involvement and participation to quality improvement.
All levels of the organizational hierarchy must be involved to make the TQM program
successful. However, with any short-coming in the efforts or improper utilization of
resources, could make the success of TQM program doubtful and collapse the internal
bonding of the company. TQM techniques give the best results when they are
supported strongly by all levels of the management and employee teams, and if there
are persistent efforts on process improvisation with a negligible margin for errors.
Now, that we know the several benefits of TQM, its needless to say it should be an
integral management technique for every organization.
Because Quality matters!
Importance of TQM
TQM can have an important and beneficial effect on employee and organizational development.
By having all employees focus on quality management and continuous improvement, companies
can establish and uphold cultural values that create long-term success to both customers and the
organization itself. TQM’s focus on quality helps identify skills deficiencies in employees, along
with the necessary training, education or mentoring to address those deficiencies.
With a focus on teamwork, TQM leads to the creation of cross-functional teams and knowledge
sharing. The increased communication and coordination across disparate groups deepens
institutional knowledge and gives companies more flexibility in deploying personnel.
Benefits of TQM
The benefits of TQM include:
 Less product defects. One of the principles of TQM is that creation of products and
services is done right the first time. This means that products ship with fewer defects, which
reduce product recalls, future customer support overhead and product fixes.
 Satisfied customers. High-quality products that meet customers’ needs results in higher
customer satisfaction. High customer satisfaction, in turn, can lead to increased market share,
revenue growth via upsell and word-of-mouth marketing initiated by customers.
 Lower costs. As a result of less product defects, companies save cost in customer
support, product replacements, field service and the creation of product fixes. The cost
savings flow to the bottom line, creating higher profit margins.
 Well-defined cultural values. Organizations that practice TQM develop and nurture
core values around quality management and continuous improvement. The TQM mindset
pervades across all aspects of an organization, from hiring to internal processes to product
development.

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What are the Benefits of Total Quality Management?

Some of the Benefits of Total Quality Management are:

1. Cost Reduction and Increased Profitability

defective products/services rather than being at an expense of quality failure cost. So

basically, it aims to manufacture zero defect products/services. Consequently, this brings

Motors and Motorola have bought in manufacturing cost reductions by implementing

infrastructure, high-end technology and competent employees enhance productivity.

3. Reduces Redundant Activities

time and duplication of tasks.

4. Promotes Innovation Process

approach to the core and peripheral services attracts the customers.

organization to deliver products/services specific to the market.

6. Holistic Approach to Management

by facilitating good work culture, team-work, promoting self-development, employee

engagement and thus extracting better performance.

7. Promotes Continual Improvement

standards of a product/service. This results in a continuous revival of processes.

8. Facilitates Competitive Edge

image and goodwill in the long run.

10. Facilitates Effective Communication and Employee Morale

functioning and development of an organization. This results in improper

contributing to low morale. Whereas, TQM facilitates effective communication and

interaction within members of different departments and hierarchies of management.

This boosts employee morale and team-work.

11. Facilitates Customer Satisfaction

quality, reduction in costs, increased profitability, increased market share, and

productivity. But, also, intangible returns like better communication, teamwork,

employee engagement, customer satisfaction, goodwill, and increased employee

training period, company-wide involvement and participation to quality improvement.

successful. However, with any short-coming in the efforts or improper utilization of

integral management technique for every organization.

Because Quality matters!

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