Will TQM Cost More?

The idea of "quality" is free. Studies on successful implementation of TQM programs and customer service show a significant improvement in company efficiencies, sales, and profitability, often with fewer people and at less cost than before.

Most companies, small and large, operate well below 100 percent of their potential efficiency. What is your evaluation of operating efficiency for your company? 50 percent? 75 percent? 40 percent? Some of this underutilized potential may be measured in quantitative terms, such as plant capacities, the ratio of parts meeting standard to the number of rejects, or the turnaround time for orders to delivery. However, much of this underutilized potential is more subtle, difficult to see, and difficult to correct.

What is the cost-savings for increased good will or customer loyalty? These intangibles can lower costs and yield tangible gains in productivity, sales, and ultimately profits.

When each employee is personally committed to quality and customer satisfaction, people will be doing more things right and better the first time. This results in lower costs, less waste, and higher productivity. Much of the success of Japan's auto industry in the 70s, 80s, and today rests less on innovation and more on a commitment to quality and efficiency. Only recently have U.S. automakers approached the efficiency and productivity of Japanese automakers. U.S. automakers are also lowering costs, waste, and substandard assemblies, while increasing sales and profits. Detroit's attention to car buyers' wants, needs, and customer satisfaction has also yielded gains in U.S. car sales compared to the imports for the first time in decades.