Total quality management, Deming, Six Sigma, ISO 9000……why so much talk about quality management? With computers, instant communication and the move to global markets via the World Wide Web, quality has become a competitive edge. It has also become one of the tools to lower cost and increase profits. But what is quality? Quality is whatever one perceives it to be and in your business the “one” that matters is the customer.
Total quality management is a system used to make constant improvement—eventually resulting in satisfied customers. The basis of TQM is the assumption that many of the problems and errors result from the processes, not employees. TQM puts focus on the process of producing the product or service instead of the product. This is accomplished with data collection and analysis, flow charts, cause and effect diagrams, and other tools that are used to analyze and correct processes. Below are definitions and samples of some of the tools used in TQM.

The cause and effect diagram is a tool used to identify causes of particular problems. It helps focus on causes rather than problems which will help to determine solutions rather than quick fixes. As seen in illustration A, a cause and effect diagram was created to show the causes of issuing credit memos. With this information, three months of historical data of all the credit memos processed and the reasons for them was collected. Illustration B is a spreadsheet of the data collected.

Illustration A

With this data, a histogram graph was prepared. A histogram is a bar graph used to pictorially show the numbers of occurrences for different reasons for a certain period of time. (See Illustration C) A Pareto chart is a bar chart, which takes information and ranks it by order of occurrence so that significant and insignificant causes can be determined and priorities set. This chart is based on the Pareto principle, which states that 80 percent of problems come from 20 percent of the causes. Although not shown, the Pareto chart indicated that the number one cause of credit memos is billing errors.