Total Quality Management and Business Competitive Advantage

Abstract

Total Quality Management has helped many business entities in growing enormously. Most of the companies have embraced the motive at different times with the aim of maintaining their business in a competitive environment. Nowadays, consumers purchase products that suit their needs, thus leading to stiff competition from production companies. Many researchers have different views on the implementation and effects of the TQM. Originally, before the introduction of the TQM, many companies’ targets were quantity production, but after the advancement of the economy, competition became a major problem for business people who advanced their ideas and came up with TQM strategies. So far, a lot of improvements have been experienced, but the competition is still high, hence making it hard for people who are not serious to survive in businesses. TQM strategies have helped companies in gaining a competitive advantage. Therefore, the following paper is a discussion of how TQM plays an important role in helping companies have a competitive advantage.

Introduction

For a long time, business entities in the world market have been acting with the aim of making profits. The scope of performance differs from one business to the other, depending on the form of management they fall in and the type of business they deal within the market. Similarly, the management of a company usually tries to conduct their business with the aim of winning against competitors existing in the market. The competition of business entities is always theoretical since it comes hand in hand with the performance of companies to win the competitive market. Marketing strategies depend on quality management research in a company that deals with developing the quality of commodities with the help of Total Quality Management Strategies. Therefore, for a business to understand the theory of competitive environment and sustain itself in the business forum, a business is required to undertake all the steps available in the practice of TQM strategies.

Some steps are available in embracing quality management to obtain the desired type of commodities in the market for the business to perform. Currently, in every business quality of products and services matters most since many businesses emerge every day. However, a company must try and improve in quality for it to be in the business for a long period. For the past years, many companies maximized quantity production rather than quality with the aim of making more profits, but this system of production only works in monopoly companies where competition is limited. Therefore, total quality management (TQM) refers to strategic plans a company uses to improve the quality of products and services. The TQM differs from one company to the other, depending on the kind of business they perform. Every form of business has an objective and, therefore, all members of the staff participate in the improvement of services and products they offer, thus maintaining their customers for the longest period possible.

The TQM helps a business to overcome the challenge of competing against business entities that do not practice TQM strategies. In every business, the major problem is the power of competition. Customers tend to go for goods or services that satisfy their needs; therefore, quality production is the inner core of a company’s success. Many companies produce similar products and services at the same time and it is difficult to expect all customers to choose from a certain company unless they have better quality in their products or services. Every company wants to produce quality goods and services, but to do that a company requires using other techniques for the maximization of profit. Therefore, for a company to win in a competitive environment, it must embrace things like manufacturing cost reduction; quality workers; customer satisfaction; leadership qualities; operational performance; and organizational efficiency.

There is a strong relationship between TQM and competition. For a business to make good profits, it has to sell more products to customers; therefore, their products must attract customers. However, total quality management is enough for a competitive advantage. As such, the following paper focuses on how TQM helps in the competitive world.

Ways Total Quality Management Helps a Business Gain a Competitive Advantage

A company that applies TQM strategies in their operations is much better than the ones without any form of strategy in management. Chopra and Garg (2012) explain that the theory of competition in the market depends on business maximizing sales and reducing revenues to make profits against their competitive businesses. However, total quality management will help the company in identifying the cause of problems faced by the entity and take appropriate measures in ensuring the solving of problems accordingly. Most businesses have the idea of improving the quality of their products and services with the aim of retaining or gaining more customers.

One of the moves a company embraces is by surprising the competitors with a unique but the same product. This is the improvement in the normal product but with more advanced features that are catchy to consumers (Chung, Hsu, & Tsai, 2010). The move helps in lifting the customers’ demand for new or improved products that other competitors do not have at the moment. Similarly, before competitors adapt to the new products, many customers will choose the improved product and the company will gain more profits. Some of the TQM strategies that are practiced within the entity include good managerial skills that are the main reason good results are seen at the end. In current businesses, competition has become a major problem facing most business people and the only way to overcome it is by taking unique steps that meet customers’ demands. Some of the steps include the following.

1. Cost Reduction

A company’s aim is to make more sales with less revenue. However, a business that maximizes its sales with the lowest cost of production makes more profit comparing to other forms of businesses. De Mast (2006) claims that the cost of production starts from the material cost up to the dispatch cost of final products moving from the company to the consumers’ destination. If a company can minimize the cost to the lowest point, definitely they will be able to make a profit at the end. The term ‘reducing the cost’ is not simply defined unless the company knows how to retain the quality of the product for the benefit of sustaining the current consumer customers. Therefore, reducing the cost of production will not reduce the quality of products of the entity.

In every business, the cost of manufacturing differs according to the form of commodities they produce. The cost of production starts from the raw materials purchase, storage facilities, manpower and wages, time spent in production, and many more. Therefore, for a company to make more profit, it must take steps that lead to the reduction of these costs (Chung et al. 2010). Cost reduction helps in the profit maximization during sales. Similarly, a company can defeat competitors by reducing the cost of selling their commodities to consumers. Many customers will eventually go for that commodity that is lower in price so as to save more of their cash. The company will succeed in sales only if it reduces cost production and retains quality products for customers as compared to competitors. For the company to reduce costs of production, they have to apply some simple measures such as:

• Purchase of low-cost raw materials. Suppose the production company deals with raw materials to produce finished goods. The best way to acquire low priced raw materials is to investigate where to get these materials at a lower price. Therefore, a change in reducing cost is seen. This is only applicable if the company is willing to put a bargain to its suppliers. Reducing this cost will eventually change everything; especially, the profits will increase as the cost revenues reduce. The company can look for substitutes of the raw material in the market, but it must retain the quality of products by following the saying ‘cheap is expensive’.

• Reducing waste products. In most production companies, the volume of the waste material relates to the number of final products obtained in the process of production. Chopra and Garg (2012) argue that the best production control will ensure that waste products are at a minimal size. However, when waste materials are in excess, it means something must be done to reduce that high volume. The company’s experts will, therefore, come up with a solution to the problem of waste products. Therefore, reducing waste material will increase the level of productivity and then the cost of production will reduce accordingly.

• Using more advanced machinery. A better and advanced production firm leads to an increase in productivity. However, a company is required to obtain modern machinery that has a top speed in production and quality development (De Mast, 2006). Better technological machines range from the office equipment to plants in a factory that are more advanced and updated. Security matters also fall into the category of technology whereby systems are put in place so as to boost security from thefts and lazy workers, for example, CCTV cameras. Therefore, advanced technology will help the company in the production of more and efficient products.

• Avoid wastage of time by employees. During production, some employees make the worst out of their job by delaying processes and wasting time in delivering manpower to the company. Similarly, tired and exhausted workers should be given time to take rest, but the production should not stop. Therefore, supervisors will ensure production is running smoothly and workers do not waste time and the production will be as high as expected to reduce the cost of production at the end.

2. Quality Workers

Teamwork is an important attribute for every company. The management of the company will be required to engage every worker in the company to participate as a team. The goal of every company is to make sure production runs very smoothly and as planned and, to acquire that motive, workers are supposed to work as a team. The responsibility of the management is to inform all employees of the plans and strategies of the company for better production. The main aim of informing employees on the strategies is to gather them together and make sure everyone has mastered their responsibilities in the production system (Goetsch, Davis, & Goetsch, 2010). Therefore, having knowledge of the conditions of the company, employees will work as a team with the same goal of more production. This strategic plan of bringing workers together helps in making workers understand their role in the company and they feel as if they are doing their business. Most of them engage fully and become better with time. Workers gain much experience through learning and motivations by employers that make them quality workers.

Having experienced and devoted workers help in a meeting customers’ demand when dealing with the sales of commodities or even services. Workers are therefore required to specialize in their work all the time and products and services will be of good quality. Similarly, a company is required to teach workers on the goals and objectives of the company so as to make sure they follow them promptly. By doing this, workers will eventually stick to their place of expertise and in the end, make the best outcome by providing quality products and services. Supervision is not necessarily important as long as every worker knows what to do and when to do what is required. Nadarajah and Kadir (2014) indicate that the main aim of having the best team of employees is to make sure all the demands of customers are met. Customer care representatives play a great role in talking to customers in the best way. For instance, some companies require a worker to smile when speaking with a customer regardless of their moods or feeling and, thus, encouraging customers in purchasing their products. Quality workers help the company make significant sales, therefore beating competitors in the business. TQM strategies help a company get utmost profits in the competitive environment with the use of having experienced and qualified workers.

3. Customers’ Satisfaction

A customer is someone with the ability to purchase any commodity of a given company. There are two types of customers in the market. One type is internal, while the other consists of external customers. An internal customer refers to employees of the company who benefits from products. Internal customers recommend products to their employees and customers. External customers refer to other normal customers who are only interested in products on sale. Internal customers do not have much choice in choosing products since they have a clear knowledge of what they are purchasing, while external customers have to be motivated to choose from the market. A satisfied customer is a happy customer, meaning that when a customer is satisfied with products purchased, he/she will return for more and recommend other buyers for products. Similarly, an unsatisfied customer will eventually fall out of the product and preach the ill truth to others how commodities did not suit them.

The importance of customers’ satisfaction ranges from one commodity to another. It is important to know if products meet the customers’ expectations to improve and manage the production of the given commodity. Therefore, producing quality products will attract more customers and the demand will be high. To satisfy a customer, a company requires knowing the main objective of the commodity towards different customers. According to Ovenden (1995), different customers have different tastes relating to products of the company. Therefore, critical knowledge of customers’ preferences is vital in the satisfaction of customers’ needs. The TQM relates to customers’ satisfaction since the company’s main aim is to maximize their profit and maintain a flow of customers. Similarly, a company cannot know whether the customers’ satisfaction is met unless they relate or talk to customers. A company can engage in asking customers to rate their products or satisfaction in different ways and with that analysis the company will know if they need to improve their products or not. A company with a clear knowledge of customers’ satisfaction will make more profits when customers prefer their products or services over those of other competitors. In a competitive environment, it is easier to indicate if a company has managed to attain customers’ satisfaction. Through the process of purchase of commodities, most customers will go for the product that suits their needs. However, it is easier to tell if a certain company is improving in production. Zentner (2012) states that quality products have a durability period and most customers will go for those products that have a long-lasting period. Therefore, the durability of every product will attract more customers to the company. Customers’ satisfaction will induce a better talk about the product and that will reduce the negative talk about the product that probably comes from competitors. By satisfying customer’s requirements, many new customers will emerge among consumers and the current ones will retain their loyalty to products. However, it is much easier to retain a customer than to gain a new one.

There are other strategies used to gain more customers through the knowledge of their satisfaction. Some of them acquire information from customers in the development of products. Due to technology advancement, a company can use the online platform to gain or educate customers about the commodities in the market or enquire more information on how to improve their products. Therefore, by the use of the TQM, a company makes sure that customers are satisfied; hence, the company is placed a step ahead against its competitors by gaining the trust of customers, thus maximizing their sales.

4. Leadership Qualities

A leader is someone who plays a great role in a company in the form of setting a good example for others. A good leader leads by example. A company with poor leadership is said to be less effective in production compared to active leaders. Therefore, a leader with good qualities will create a suitable environment for workers by highlighting employees’ responsibilities in the company. Leaders are expected to be honest in their line of duty. However, if the leader practices honesty, other workers down the line will follow the steps since the business is a reflection of the leader. Workers usually do and perform what they are told. It is the responsibility of the leader to delegate duties to workers since the leader cannot manage to do everything in the company (Ovenden, 1995). Therefore, sharing of work with workers will encourage them to work on their strengths and eventually the business will grow in a better way.

The communication procedure between the leader and workers should be simple and elaborated. This means that the leader is supposed to relate the vision of the company to employees to accelerate the process of development since everyone will be on the same track of achieving the same goal. However, despite what most leaders pass through, they should at all-time show confidence since they play a major role in being the role model for most employees. Employees relate themselves to the performance of their leaders and when a leader shows some weaknesses, employees will get demoralized and lose hope. Leaders should be committed to their work all the time and show a lot of creativity in coming up with new and improved ideas on running the company. The role of a leader is to unite employees and motivate them on how to work effectively.

Creating a dialogue with workers on what challenges they face while working will make the company focus mainly on important issues affecting the company (Zentner, 2012). Therefore, without a system of the TQM, a company cannot achieve much in the competitive environment. However, good leadership qualities make the company ahead of others with poor leadership, as well as maximizing their sales and profits. Similarly, a good leader focuses on maintaining high sales, thus maximizing their profits. By doing this, a leader is supposed to investigate information on competitors of their company. He/ she will make sure all the relevant information is gathered and takes measurable steps based on findings on whether to improve the quality of their products or make more products. Investors and lenders agree to invest in a given company depending on the leader they talk to. However, if the leader is clever enough, he/ she will convince investors to invest in the company without a doubt. Therefore, excellent leadership in a company will help the company achieve its goals and objectives and improve its market in a competitive environment.

5. Operational Performance

In every company, the development of quality relies on the performance of officials, workers, machines, and the supply chain. However, the application of the TQM in the system leads to the emergence of operational performance that includes assessment of every operation that helps in the production of quality products. Chung et al. (2010) state that supply chain management refers to the course of products and services as to how they are acquired, stored, produced, and sold. Therefore, in the production of every company, the relationship between supply chain management and total quality management relates in many ways for the benefit of the company. The company’s representatives should, therefore, work together in identifying the cause of problems they face and the strategies they make in overcoming given limitations.

However, by the use of advanced technology in production, production processes can be raised to a significant percentage, hence benefiting the company. Some technologies to be implemented are used for the purpose of reducing risks of production or for improving the office work. For instance, in the office, they can place some software that gathers data and creates schedules for the improvement of operations. Application of TQM strategies has helped most companies attain their goals of providing the desired quality of products, hence creating more sales and profits. Therefore, operational performance will help the company attain the desired level of productivity with account for the competitive advantage.

6. Organizational Efficiency

Embracing the TQM strategies in the organization will make the company have a competitive advantage in the improvement of quality products. This is attained through the application of every tool of the TQM in all their operations, hence improving the quality. The company reflects mainly on the performance of all employees with the same motive and aims of implementing every strategy and achieving their goals (Nadarajah & Kadir, 2014). Therefore, every worker inside the company plays a big role in ensuring that the business is running smoothly. Similarly, employees are required to cooperate with one another to attain a specific quality and satisfy the needs of consumers by meeting their preferences. Employees also work on certain ideas shared by the board of officials within the entity and through the implementation of those ideas their desired goals are met. However, organizational performance reflects on maintaining the production of quality products for the longest time possible, as well as maximizing sales.

Therefore, the TQM helps mostly in attaining the goals of the organization in the competitive environment, making it easier to beat competitors around them. The main objective of using the TQM in organizational performance is to retain the good form of quality of products and retain current customers with the aim of making profits and surviving in the business forum. By the use of budgets, as stated by (Goetsch et al., 2010), the company will know the risks and indications of financial constraints, which lowers the performance of any company. However, the management is given the duty to implement the TQM strategies effectively as a way of having better performance in the organization. Therefore, a healthy organization is said to be in the practice of implementing strategies of the TQM at all costs so as to obtain a common objective of surviving in the competitive environment given that every business nowadays is using the TQM in their companies. However, it all depends on officials and leaders of the organization responsible for the implementation of their different strategies to fight the stiff competition around the world of business.

Conclusion

The TQM (Total Quality Management) is an essential strategic approach to implementing today’s businesses. The benefits of the TQM are seen to be more effective when applied in companies because they show better performance within the entity in regards to the competitive market. However, it is the company’s task to know what measure to take to overcome the main challenge of production facing current businesses and for them to acquire more profits. Therefore, with the use of advanced TQM procedures, companies appear to be more reliable and more consumers rely on developed products. Many businesses are opened daily and more consumers switch from one commodity to another, depending on the quality they produce. For example, in the phones and gadgets industry more and more phones and electronic products are manufactured daily and many of them are more advanced than the previous ones. One can take, for instance, Nokia that in the past had better phones, which many people purchased, but later the company reduced its products and other factories like Apple came with more advanced gadgets. Nokia lost many customers by then to their competitors. Similarly, in every company, the value of the commodity does not matter as much as the quality of the product since many consumers believe in the durability of the commodities rather than the price of that commodity.

However, the application of TQM strategies differs from one company to another. Some companies with a higher value of production will be strict with their operations according to the TQM implementation, while others like small businesses will just be partial implementers of strategies. Therefore, regardless of the size of the business, TQM implementation is vital for the benefit of the given company. Leaders and officials play an important role in the enforcement of the TQM strategies. They make sure the company acts fully in line with rules so that they can be in a competitive world like other competitors. The major role of using the TQM is to make sure the company is undergoing and operating in a way of competing with other entities; otherwise, the given company will not make enough profits that will sustain them to be in business for a long period. Competition nowadays is very solid and companies are operating at their best to beat others in the same business because consumers tend to choose from the best products and services available on the market.

Employees of a company are sometimes unpredictable depending on the way their employers handle them. The main purpose of having the best employees is that they play a major role in the production system given that they are handled perfectly. Specialization of tasks in a company and employees will help them work at their best and with most expertise, while the end has the best result. Similarly, motivating employees will give them a sense of worth in the company and leaders will experience an increase in productivity since workers are happy and motivated and ensure an increase in sales and profits. Therefore, the interaction of employees and employers is very important in the competitive market. Implementation of every aspect of TQM strategies will help the company to conduct its business and participate with account for the competition within the market. TQM strategies are the key to the success of every business regardless of their size or place as long as the company implements the strategies effectively.

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