TQM stands for Total Quality Management. It is a managerial tool used to improve the efficiency and profitability of an organisation. TQM is a recent development in the field of management which emphasises the management accounting function and tries to systematise the production management.
It has three core aspects – Quality Control, Quality Assurance & Quality Management.
Quality Control, deals with analysing the past to take steps to reduce the defective production. Quality Assurance is concerned with the establishment of systems within the production process to prevent defects. Quality Management is a process of continuous improvement in the products and services offered by the organisation.
TQM seeks to increase customer satisfaction by finding the factors that limit current performance. The practice of TQM in manufacturing environment has produced improvements in efficiency and profitability.
In the late 1950s Japanese products were defamed in the west for their poor quality and unreliability. The transformation in the reputation of the Japanese goods started after applying TQM. It started in the fields of electronic and automobile sectors by application of latest Management principles. Their ability to do so was due to the restructuring °f unions and institutions following second world war, allowing the use changes necessary like Just In Time (JIT), Value Added Management (VAM) & Total Quality Management (TQM).
TQM assumes potentially greater importance as a tool improved e‘ficiency in service areas. By focussing on the management accounting ‘unction it is possible to devise a process through which quality improvement methods might be used to highlight problem areas and facilitate their solution.