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Total Quality Management & Theory of Constraints Applied to the Business World

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Total Quality Management & Theory of Constraints Applied to the Business World Ernesto Lefranc 11/13/2004 Man 4504 Dr. Feldman TQM AND TOC Total Quality Management (TQM) Customers nowadays have become more and more concerned in buying products of good quality. But before one can begin to understand what Total Quality Management is, one must first know what quality is. Quality is the ability to satisfy, or even exceed, the needs and expectations of the customers. Quality is vital for a company to grow, survive and prosper. Nowadays, more and more organizations are placing greater emphasis on quality in order for them to prosper and become successful in their markets. In this essay I will be explaining the different concepts of quality, which are established by different people and then compare these concepts. The First theory to be explained will be Total Quality Management (TQM). Philosophers of TQM are W. Edwards Deming, Philip B. Crosby, and Joseph M. Juran. Throughout the twentieth century, these men have integrated new systems for improvements in the quality system for practically any organization. The first most well known of these philosophers is W. Edwards Deming. Deming first became known to the public when he was credited with assisting the Japanese after World War II and helping to elevate the Japanese industry. ...read more.


These benefits lead directly to increased market share and improved profitability. Theory of Constraints (TOC) The Theory of Constraints comes from the work achieved by Eli Goldratt's, on "how to think". It is the Thinking Processes and their applications. By knowing how to think, one can better understand the world around them. By understanding the environment one works in, one can make improvements. Cause and Effect is Central to the concept of TOC. The Thinking Processes of TOC give us a series of steps which combines cause-effect and our experience to gain knowledge. With knowledge, one can make improvements. One major benefit of the Thinking Processes is that it provides the ability to recognize the Paradigm shifts which occur when times change but our assumptions and rules don't. We cannot constantly monitor every assumption to be sure we are in line with constantly evolving reality. Those who continue their usual patterns of operation, regardless of the changes in reality, will suffer when the effects of their actions are not those that they expect. A constraint is anything that exists in an organization that limits it from moving towards its goal, assuming that a goal has been defined. For most business organizations the goal is to make money. ...read more.


TOC is really a "focused methodology for performing systems thinking (using the concept of Throughput rather than Cost Control) on the business entity as a whole to focus changes to be made on constraints that are directly limiting better total-system profitability". One of the primary reasons Total Quality Management has such a tough row to hoe is that it "lends itself very easily to sub optimization", which, as Deming observed can be the death of a system. The Theory of Constraints provides an orderly means of connecting departmental actions and decisions with the company's goal and necessary conditions. TOC provides the tools to determine what to change, what to change it to, and how to cause the change. And TOC measures Throughput, Inventory, and Operating Expense which allows managers to assess the global impact of local decisions. The Theory of Constraints is not a replacement for Total Quality Management. It is a focusing tool. Where TQM says, "Improve everything at once", TOC says, "Improve the most important things first." The effective integration of TQM with TOC can alleviate the shortcomings of the former. TOC provides a direct link between quality improvements and the bottom line. With TOC, an organization can trace performance gains directly to the improvements that caused them. Moreover, such gains are immediate. On the contrary, TQM need years to show results. ...read more.

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