Evaluate the extent to which implementing total quality management (TQM) might reduce costs for TC.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2024). The mark or mark type is shown in brackets.

1. Definition of TQM an approach to quality that aims to involve all employees in quality improvement.
2. Understanding of implications of TQM such as Continuous improvement.
3. Kaizen groups.
4. Training of employees.
5. Giving employees responsibility for quality.
6. Quality assurance – checking for quality at every stage.
7. Internal customers.
8. Removes need for quality control inspectors.
9. TQM involves culture change to more employee involvement.
10. How TQM may reduce costs – links with inventory control, quality, employee roles, capacity management, waste reduction, and efficiency.
11. TC manufactures premium quality boxed chocolates using materials of cocoa, sugar, nuts vegetable oils, nuts and fruits.
12. Hand finishing, inspection regime - inspector of materials and another for finished product.
13. Employees follow precise recipes and production processes.
14. Significant discards of below-standard chocolates.
15. TC already has good reputation for quality chocolate products.
16. Two quality controllers, one who checks raw materials and one who checks final products will lose their job roles.
17. By focusing on quality at all stages of production, TQM will reduce wastage of materials and finished products, therefore decreasing costs for TC.
18. Through Kaizen groups, employees will be empowered to suggest changes to improve production and quality, therefore employees may be more motivated resulting in lower labour turnover and therefore reducing costs of recruitment.
19. As part of TQM, JIT inventory management will reduce the quantity of inventory being held and therefore should reduce storage costs.
20. TQM requires employee training and therefore there will be an increase in training costs to TC and the increased cash outflows may result in liquidity issues (acid test ratio already low).
21. Culture change will incur costs and employees may leave increasing recruitment costs.
22. May be less focus on quality and commitment by employees due to insufficient training resulting in an increase in wastage in the short term and therefore an increase in costs.
23. Changing to TQM will mean that the two quality controllers are made redundant or redeployed resulting in an increase in costs.
24. Assessment of extent to which TQM will reduce costs.
25. Weighting of arguments.
26. Recommend that TC build on existing good practice and introduce TQM gradually, winning employee trust. Then costs will be reduced.
27. TQM requires active consent of employees and managers for success and a change to workforce culture requiring management and control of change.
28. Could be tied in with IT/AI proposals in an integrated way to reduce costs.
29. Conditions for successful implementation of TQM.
30. Employees must be empowered to make decisions – some empowerment already in place (skilled hand finishing, making different products).
31. Team working must be part of the culture – needs to be implemented.
32. All employees must be involved – needs change.
33. Training required but directors are committed and willing to invest.