Page 67 - DMGT524_TOTAL_QUALITY_MANAGEMENT

Total Quality Management

Notes The index measures eight sectors of the economy, which include more than 40 industries and
more than 200 individuals companies and agencies. The eight sectors of the economy are:
1. Manufacturing (non durables)

2. Manufacturing (Durables)
3. Retail
4. Transportation, communication and utilities
5. Finance and Insurance

6. Services
7. Public administration and government
8. E-commerce (adopted in 2000)

Caselet Use TQM to Improve Customer Satisfaction

primary focus of TQM and most Quality Management Systems is to improve
customer satisfaction by having a customer focus and consistently meeting
Acustomer expectations. Customers are almost always satisfied when their
expectations are met. When they expect a certain product or service, and you deliver it
without problems and at a fair price, you’ve built a solid customer relationship. Happy,
satisfied customers become repeat customers and they provide word-of-mouth marketing
– the most powerful kind.
There are three Total Quality Management components that work toward achieving
customer satisfaction:
1. It requires that your business understand what customers typically expect in a field,
industry, or product line.

2. It ensures your business has the expertise and the resources to consistently deliver
the expected product or service.
3. It emphasizes the need for your business to clearly communicate to the customers
exactly what you will deliver to avoid misunderstandings.
TQM provides the quality assurance that customers will get what they expect, as well as a
process for managing unsatisfied customers, make needed corrections and prevent similar
reoccurrences.
Every business owner and manager knows the importance of satisfied customers, and
how expensive it is to find new customers compared to keeping current customers. Business
research clearly shows that there is a direct correlation between satisfied customers and
revenue. If your business doesn’t have a clear path to creating satisfied customers, then it
can benefit from TQM.

TQM Improves Business Efficiency and Effectiveness
While focusing on the customer is critical to success, it isn’t the only factor. A business can
go broke sparing no expense to make customers happy. So not only does a business need
to satisfy customers, but it needs to do it in a way that is. A business also has to look within
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