Strategic Cost Management · Quality Cost Management

Concept of Quality and Total Quality Management (TQM)

Updated 11 October 2026 · Fact-checked

Quality is how well a product or service meets customer needs and expectations. Total Quality Management (TQM) is a company-wide approach that builds quality into every activity through customer focus, continuous improvement, employee involvement and process thinking. In exams, define the term, list the principles, then apply each one to the case given.

Understand Concept of Quality and Total Quality Management

Quality means fitness for use as the customer sees it. A product has good quality when it meets the customer's needs and expectations at a price the customer accepts. It does not mean the most expensive or most luxurious product. A basic phone that works as promised can be of higher quality than a costly one that fails often.

Quality has several dimensions. A common set (Garvin's) is: performance (main operating features), features (extras), reliability (chance of failing in a period), conformance (meeting the specification), durability (useful life), serviceability (ease and speed of repair), aesthetics (look, feel, sound) and perceived quality (reputation). Questions often use two ideas: quality of design (how good the specification is) and quality of conformance (how closely the product matches that specification).

Total Quality Management treats quality as the job of everyone in the organisation, not only the inspection department. The aim is to get things right first time and to cut waste, rework and complaints. It covers suppliers, production, administration and after-sales service. The goal is customer delight at lower cost over time.

The main TQM principles are:

Customer focus: internal and external customers define quality.
Continuous improvement (Kaizen): small, steady gains in every process, often run through the Plan-Do-Check-Act cycle.
Employee involvement and empowerment: the people doing the work know the problems best. Training and teamwork matter.
Top management commitment and leadership.
Process approach and prevention: fix the cause, do not inspect defects out.
Supplier partnership: quality is bought in with materials.
Fact-based decisions using data and measurement.

Know the difference between quality control and quality assurance. Quality control is product-oriented and detective: it inspects and tests output to find defects. Quality assurance is process-oriented and preventive: it sets up systems and procedures so that defects do not arise. TQM goes further and extends both into a culture across the whole organisation.

In strategic cost management, TQM links to cost. Spending on prevention and appraisal tends to reduce failure costs. The next topics on cost of quality build on this.

Key rules to remember

Quality of design vs conformance: Quality of design = how well the specification meets customer needs; Quality of conformance = how closely actual output matches the specification; A product can conform perfectly to a poor design. Keep both ideas separate in answers.
Quality control vs quality assurance: QC = product-oriented, detects defects after or during production; QA = process-oriented, prevents defects; Use these two words in every comparison answer.
PDCA cycle: Plan → Do → Check → Act; The standard engine of continuous improvement.
Dimensions of quality (Garvin): Performance, Features, Reliability, Conformance, Durability, Serviceability, Aesthetics, Perceived quality; Eight dimensions. Link each to the product in the case.

How to solve Concept of Quality and Total Quality Management questions

Use this method for definition, discussion and case-based questions on quality and TQM.

1Read the question verb: define, explain, distinguish, discuss or evaluate. It sets the depth.
2Start with a one-line definition of quality or TQM in customer terms.
3Pick the relevant framework: dimensions of quality, TQM principles, or QC vs QA.
4Tie each point to the facts in the case, such as the product, the defect, the customer complaint or the process.
5For a comparison, use clear points of difference such as focus, timing, responsibility and cost effect.
6Link to cost where possible: prevention lowers failure cost and rework.
7Close with a short recommendation or conclusion for the company in the case.

Quickest way: Principle-to-case matching

When to use it: For 2-mark MCQs and short-note questions when time is tight.

Spot the keyword in the scenario: complaint, survey, suggestion scheme, small changes, supplier, inspection.
Match it to a principle: customer focus, employee involvement, continuous improvement, supplier partnership, or QC.
Check if the action is preventive (QA/TQM) or detective (QC). Prevention points to QA.
Eliminate options that treat quality as only the inspection department's job.
Write the answer using the principle name first, then one line of reasoning.

Common mistakes in Concept of Quality and Total Quality Management

Equating quality with high price or luxury features
Everyday use of the word 'quality' suggests premium products.
Fix: Define quality as meeting customer requirements and fitness for use. A low-cost product can be high quality.
Treating QC and QA as the same thing
Both words sound alike and both deal with defects.
Fix: State that QC detects defects in output, while QA prevents them through process design. Give one example each.
Saying TQM is the quality department's job
Students carry over the old inspection mindset.
Fix: Stress that TQM is company-wide, with every employee, supplier and manager responsible.
Listing principles without applying them to the case
Students memorise lists and skip the application the exam asks for.
Fix: After each principle, add a line using a fact from the case scenario.
Confusing quality of design with quality of conformance
Both phrases refer to the product's specification.
Fix: Design is about the specification chosen; conformance is about how well output meets it.
Assuming TQM raises costs only
Training and prevention spending is visible immediately.
Fix: Explain that prevention reduces rework, scrap, warranty and lost sales, so total quality cost usually falls over time.

Worked examples

Example 1

Distinguish between quality control and quality assurance. Give one example of each for a company making packaged food in Pune.

Show the solution

Quality control is product-oriented. It checks finished or in-process goods against standards and finds defects.
Quality assurance is process-oriented. It builds systems so that defects are not produced.
QC is a detective activity done after the fact; QA is preventive and done before and during production.
QC is usually the job of inspectors or the testing lab; QA involves all functions, with documented procedures and audits.
Example of QC: testing sample packs from each batch for weight and seal strength and rejecting faulty batches.
Example of QA: fixing supplier approval rules, calibrating filling machines on a schedule and training operators on hygiene procedures.

Answer: QC finds defects in output by inspection and testing; QA prevents defects by controlling the process. QC is reactive and product-focused, QA is proactive and process-focused. TQM includes both and extends them to the whole organisation.

Example 2

Sundaram Auto Components Ltd, Chennai, has high customer returns of brake parts. Management plans: (a) a monthly customer feedback review, (b) shop-floor teams empowered to stop a faulty line, (c) small weekly process improvements, (d) joint quality targets with steel suppliers. Identify the TQM principle behind each action and explain how it should reduce returns.

Show the solution

(a) Monthly feedback review is customer focus. It shows what customers actually experience and ranks the problems to fix first.
(b) Empowering teams to stop the line is employee involvement. Workers closest to the process catch defects at source, before parts reach customers.
(c) Weekly small improvements are continuous improvement (Kaizen), usually run through Plan-Do-Check-Act. Many small fixes steadily remove causes of defects.
(d) Joint targets with suppliers are supplier partnership. Better input material reduces defects that originate in raw steel.
Overall: all four actions are preventive, so they move quality effort from inspection to prevention and should lower returns, rework and warranty cost.

Answer: (a) Customer focus; (b) Employee involvement and empowerment; (c) Continuous improvement; (d) Supplier partnership. Together they prevent defects at source and so reduce customer returns.

Exam tips

Section A MCQs often test matching: a scenario to a TQM principle, or a statement to QC versus QA. Learn the keywords for each.
In written answers, always apply principles to the case facts. A bare list earns few marks.
For 'discuss' questions, include both the benefit and a practical difficulty, such as the time and training needed for TQM.
Use the exact terms: quality of design, quality of conformance, prevention, Kaizen, PDCA.
Mention the cost link in one line. It connects this topic to cost of quality, which is examined with numbers.

Practice questions from Quality Cost Management

Concept of Quality and Total Quality Management in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Concept of Quality and Total Quality Management: frequently asked questions

What is the TQM concept in CMA Final SCM?

TQM is a company-wide management approach that aims to meet customer needs and build quality into every process. It rests on customer focus, continuous improvement, employee involvement and prevention. In SCM it is linked to reducing the total cost of quality.

What are the dimensions of quality?

A widely used list has eight: performance, features, reliability, conformance, durability, serviceability, aesthetics and perceived quality. In an answer, apply the ones that fit the product in the case instead of listing all blindly.

What is the difference between quality control and quality assurance?

Quality control inspects and tests output to detect defects, so it is product-oriented. Quality assurance designs and monitors processes to prevent defects, so it is process-oriented. QC is reactive; QA is proactive.

Is TQM the same as Kaizen?

No. Kaizen means continuous small improvement and is one principle within TQM. TQM is the wider philosophy that also covers customer focus, employee involvement, leadership and supplier partnership.