Administrative Models: TQM and Just In Time Strategies

Administrative Models

Total Quality Management (TQM)

Total Quality Management (TQM) is a managerial innovation that emphasizes an organization's total commitment to the customer and to continuous improvement of every process through the use of data-driven, problem-solving approaches based on the empowerment of employee groups and teams.

The core of TQM is the customer-supplier interface, both externally and internally, and at each interface lie a number of processes.

This core must be surrounded by a commitment to quality, communication of the quality message, and recognition of the need to change the culture of the organization to create total quality.

These are the foundations of TQM, and they are supported by the key management functions of people, processes, and systems in the organization.

The Company Uses TQM to:

• Increase customer satisfaction - Reward systems designed to reinforce quality performance.
• Cut costs - Cross-train personnel to do the jobs of all members in their work group.

The Quality Strategy is Formulated at the Top Management Level and is Diffused Through the Organization

• The organization needs a long-term commitment to continuous improvement.
• Adopt the philosophy of zero errors/defects to change the culture to "right the first time".
• Train people to understand the customer/supplier relationship.
• Don't buy products or services on price alone - look at the total cost.

Just In Time (JIT)

Just In Time (JIT) is a manufacturing philosophy that eliminates waste associated with time, labor, and storage space.

The company produces only what is needed, when it is needed, and in the quantity that is needed.

The company produces only what the customer requests according to actual orders, not to forecast.

It means that the company can manage its own resources and allocate them very easily.

JIT is an operational philosophy that incorporates an improved inventory control system in conjunction with other systems such as:

• A set-up time improvement system
• A maintenance improvement system
• A quality improvement system
• A productivity improvement system

Benefits of JIT:

• Reduced set-up times in warehouses - The company, in this case, can focus on other processes that might need improvement.
• Improved flow of goods throughout warehouses - Employees will be able to process goods faster.
• Suppliers continue around the clock, keeping workers productive and the business focused on turnover. Employees will work hard to meet the company's goals.

Disadvantages of JIT:

Problems with order fulfillment if a customer orders a product and you don't yet have it in stock. You run the risk of not being able to fulfill the order in time.