TOTAL QUALITY MANAGEMENT LIMITATIONS AND PITFALLS
What is Total Quality Management ??? Total Quality Management (or TQM) is a management concept coined by W. Edwards Deming. The basis of TQM is to reduce the errors produced during the manufacturing or service process, increase customer satisfaction, streamline supply chain management, aim for modernization of equipment and ensure workers have the highest level of training. TQM is an approach to management that seeks continual improvement in everything we do. TQM stresses the creative involvement of everyone from the Chief Executive Officer down, in the quest for quality.
The Failed Attempt of IBM to implement 6-sigma Policy
Six Sigma is a business management strategy originally developed by Motorola, USA in 1981.
IBM was one of the first companies to implement Six-Sigma.
IBM’s estimate was that by implementing six-sigma, they would add $2.4 billion directly to the bottom line.
John Fellows Akers, the president of IBM between 1983 and 1989, talked publicly about what the Quality movement could do to reinvigorate American business and held IBM up as an example of how other companies should run their businesses.
But, IBM suffered a loss of $16 billion between 1991 & 1993.
Why did IBM fail to implement TQM ?
One of the reasons of failure was over-abundance of training instead what-they-need-when-they-need form of training.
The second reason was the heavy use of the Carrot-and-Stick i.e. a policy of offering a combination of rewards and punishment to induce behaviour.
The reason was the employees at IBM had the misconception that the success of the program meant company would need lesser employees hence would result in the loss of their own jobs.
Where TQM should NOT be implemented Paul Carrol, the author of Big Blues: The Unmaking of IBM, had pointed out in his book that Six Sigma may have been the wrong strategy for IBM. TQM is not beneficial for firms which operate in quickly changing business environments with short lifetimes of technology, e.g. Computer Firms. They should rather focus on innovation than on optimizing their current production process.