REVENUE JOURNAL: MANAGEMENT AND ENTREPRENEURSHIP
e-ISSN 3026-1058

Vol 1(1), August 2023, 44-50
https://doi.org/10.61650/rjme.v1i1.300
a s s yf a . c o m

Does TQM affect the efficiency of the Indonesian food sector's
production?
Totok Hendarto1*, A. Ifayani Haanurat2, And Amrit Dhakal3
1 Universitas Dr. Soetomo Surabaya, Indonesia
2Universitas Muhammadiyah Makassar, Indonesia
3Institutional Prince of Songkhla University (PSU), Thailand

*Corresponding author: ifayani.haanurat@unismuh.ac.id

KEYWORDS
Efficiency
Literature Review
Production
Total Quality
Management (TQM)

REVISED: 23/06/2023
ACCEPTED: 20/08/2023
PUBLISHED: 30/08/2023

ABSTRACT Globalisation facilitates the adaptation of economic policy in every country. Every destroyer must
possess the capability to anticipate future positioning, and it is imperative that the data is adaptable to
incorporate the required Kamilan data. A comprehensive quality management system, such as Total Quality
Management (TQM), needs to be rationalized to ensure the production of superior products and services.
Using a qualitative approach, this study examines the impact of Total Quality Management (TQM) on
production efficiency in the food industry in Indonesia. The implementation of qualitative methodologies
and the utilization of library resources for scientific article composition are currently incomplete. The Google
Scholar literature section, or the section dedicated to related literature reviews from the past decade,
explores the topic of library collections—The Google Scholar Database utilizes the Publish or Perish tool,
which operates in English, is freely accessible, includes a bibliography with a minimum of 25 entries from
reputable publications, and provides complete full-text PDFs. The specified keywords are "TQM" and "Cost
efficiency," and there is a limitation on submitted applications between the timeframe of 2010 and 2018.
These summarise prior outcomes or discoveries from the Sebi Sebiman Results or Findings Law. Harzing
authored or finished all scientific articles referenced in the data search. These delays hurt both the efficiency
of manufacturing and the quality of the products, leading to increased prices. Total Quality Management
(TQM) enhances cost efficiency in production, particularly in food production. This article will elucidate the
utilization of Total Quality Management (TQM) by operational management to reduce the expenses
associated with gift production.
© The Author(s) 2023. This is a Creative Commons License. This work is licensed under a Creative
Commons Attribution-NonCommertial 4.0 International License.

1. INTRODUCTION
Science and technology's rapid and exponential
advancement has profoundly impacted the global economy
and Indonesia. As a result, many companies and individuals
have experienced substantial changes (Rahman et al., 2021;
Sugiono et al., 2023; Wang, 2023). The expected alterations
are intended to reduce economic distortions and improve
overall efficiency. Company management must efficiently
allocate resources and make strategic decisions to accomplish
company objectives effectively (Alawag, 2023; Gaur, 2021;
Sungkawati et al., 2024a). Globalization is an intrinsic and
influential factor that necessitates governments to modify
their economic strategies. For effective decision-making, any
company must be able to anticipate its future direction. To
facilitate this process, the information provided should be
flexible to adapt and present relevant facts (Alzoubi, 2022;
Cottman, 2020; Yuniwati, Novitasari, et al., 2023).
Empirical research suggests that many firms currently
display complacency and neglect to foresee their future
direction by ignoring customer satisfaction (Yuniwati,
Prasetya, et al., 2023). Companies might prioritize the quality
of their products or services to improve their understanding
of client needs and expectations (Hendarto, 2022; Hermawati
et al., 2022). This technique allows firms to create products
and services that match client preferences, enhancing
customer satisfaction (Lestari et al., 2023; Mujahidin et al.,

2023; Nisa et al., 2023). An effective approach to
accomplishing this objective is to provide support to
businesses in the area of quality management. The need to
implement a complete quality management system, such as
TQM (Antunes, 2020; Kusumawati, 2020), is emphasized by
the goal of providing exceptional products and services (Cook,
2021; Wijoyo, 2021). One must attain the ideal equilibrium
between cost-effectiveness and producing superior products
or services (Kurniawan et al., 2023; Purwasih & Dewi, 2023;
Sudiantini, Priatna, et al., 2023). TQM is a foundational
framework for effectively managing quality and provides an
alternative method to ensure customer satisfaction. TQM
offers a structured framework and methodologies for
effectively managing quality, guaranteeing a consistent and
comprehensive approach to addressing quality aspects across
the entire operation (Hussain, 2023; Yu, 2020).
Long-term environmental preservation can be achieved
by using TQM. This holistic approach integrates all
organizational activities and processes to constantly improve
the quality of goods and services (Handayani et al., 2023;
Wibowo et al., 2023; Zain et al., 2023). This ultimately results
in customer satisfaction (Banna, 2018; Souza, 2022). This
management concept presents an innovative strategy
emphasizing customer satisfaction, innovation, and
continuous service quality improvement (Samsinar, 2021).
44

However, the goal of improving and increasing productivity
requires the implementation of strategies that minimize
production expenses as much as feasible.
The primary goal of Total Quality Management (TQM) is
to continuously improve the quality of products or services to
increase business profits (Khan, 2003). Implementing Total
Quality Management (TQM) in the food sector effectively
tackles the difficulties posed by globalization and increasing
competition from regional and worldwide corporations. This
entails augmenting the competencies and proficiencies of
employees and management to enhance production
processes and attain maximum and enduring productivity.
Total Quality Management (TQM) implementation may
have been enhanced due to management's shortcomings
(Febrian et al., 2023; Giovani et al., 2023; Kusnawan et al.,
2023).
Furthermore,
implementing
Total
Quality
Management (TQM) in Indonesia is impeded by various
causes, including verification, reduced employee motivation,
protocols, labor strikes, significant staff attrition, and
absenteeism (Fapohunda & Tinuke, 2012). Indonesia
requires higher education, skills, and understanding of
quality management and establishing a quality work culture.
Furthermore, as a result of improved quality, there is a
significant reduction in direct labor costs. According to Ulfah
(Rifai & Anton Eko Yulianto, 2022), this update aims to reduce
product development time by 30% to 70%, cut time to market
by 90%, and improve quality by 200% to 600%. According to
the National Institute of Standards and Technology, qualityby-design approaches can reduce engineering modifications
by 65% to 90%.
The need to provide standardization or clarity of the
quality system employed by small and medium enterprises,
specifically micro, small, and medium enterprises (MSMEs)
functioning in the food industry, often presents a difficulty in
upholding their quality management system (Karunia et al.,
2023; Saputri et al., 2023). Small and medium-sized firms,
especially those in the food industry, face a major challenge
when they operate exclusively inside a single region or even
just metropolitan areas within a country (Hernawan et al.,
2014). Undoubtedly, these firms can produce high-quality
items with great efficiency.
The main obstacles small businesses face involve
manufacturing inferior and uniform goods. These
organizations depend only on a product they consider
exceptional, leading to a demand for greater diversity and
other choices. Moreover, their market is constrained, as it
solely consists of local businesses that sell their products near
the enterprise. The lack of effort to expand into new regions
or bigger markets poses a challenge in gaining market share

and growing the market. Company. A systematic approach to
quality, effectiveness, and efficiency in implementing Total
Quality Management (TQM) in the production system
contributes to its failure. This is seen in the inability to
effectively save time and expenses, minimize product flaws,
and resolve unforeseen cost issues. The selling price and
competitiveness of the product in the market will ultimately
be set by Ulfah, as stated in Suwarno et al. (2017).
The study conducted by Samsinar (2021) delves into the
notion of Total Quality Management (TQM) and its influence
on bolstering organizational competitiveness. The study
centers on the continuous advancement of many elements,
encompassing items, services, personnel, procedures, and the
environment. The survey by Novrianto et al. (2014) seeks to
improve manufacturing processes through continuous
advancement. The study conducted by Rifai and Anton Eko
Yulianto (2022) aims to create a favorable work environment
that allows employees to constantly produce perfect products
or services (zero-defect) and implement corrective actions
for future enhancements. The concept of quality is further
expanded by implementing a comprehensive strategy
(Hidayatullah et al., 2023; Tricahyono et al., 2023).
However, a study investigating the relationship between
Total Quality Management (TQM) and production efficiency
thoroughly examines the effects of implementing TQM on
production efficiency in the Indonesian food industry. This
study focuses specifically on small businesses still
implementing operational management practices. The study
was performed by scrutinizing pertinent sources from
various electronic platforms; moreover, the printing process
has yet to be executed. This study aims to Consider these
circumstances; it is imperative to completely change the
company's perspective as managing a firm with Total Quality
Management (TQM) fundamentally differs from the
traditional approach (Irsutami, 2015). In Torive, grow, and
outperform other industries, small firms strive to get
competitive advantages by optimizing cost efficiency in their
manufacturing processes (Sungkawati, Solehudin et al., 2023;
Yulianeta et al., 2024). Directing focus towards quality will
benefit businesses in two separate ways: decreasing
production expenses and boosting revenue, a topic of
considerable importance for examination

2. METHOD
This research is qualitative in the form of a literature
study or Library Research with the 7E technique (R. et al.,
2022), as seen in Figure 1.

45

Figure 1 illustrates the step-by-step procedure of the 7P
approach in a Systematic Literature Review (SLR). The term
"P1" refers to the stage of formulation. The formulation is to
establish the precise research inquiries to be undertaken. The
next stage is called "P2", commonly known as Search.
Searching entails actively seeking solutions from the
literature, specifically emphasizing step "P1". In the third
phase, precise criteria are established. The determination of
"P3" relies on utilizing inclusion and exclusion criteria. Step
"P4" involves identifying and selecting pertinent resources,
whereas step "P5", known as data presentation, focuses on
presenting the gathered data. Step "P6" involves the
processing and analysis of data, whereas Step "P7" is
specifically dedicated to concluding the information that has
been processed.
Initially (P1), the inquiry centers on persons using vlog
media for instructional intentions. (Q1) What are the benefits
of utilization? Deeper analysis of Implementing Total Quality
Management (TQM) Effect on Production Efficiency in the
Food Industry in Indonesia Question 2/Q1: What are the
adverse consequences or hindrances to utilization? Deeper
analysis of the Effect of Total Implementation Quality
Management (TQM) on Production Efficiency in the Food
Industry in Indonesia? (Question 3/Question 1).
Subsequently, a comprehensive literature search (P2) was
conducted on the Google Scholar database utilizing the
Publish or Perish tool. The designated keywords are "TQM"
and "Cost efficiency," with restrictions on submissions
submitted between 2010 and 2018 (Santoso et al., 2021; H.
Solehudin, 2023).

Figure 3 illustrates that the primary benefit is PK. PK,
or Process Knowledge, is a quality method utilized in Total
Quality Management to cultivate quality concepts. The second
aspect is focused on prevention efforts (UP). Prevention
efforts ensure that during the whole product development
and manufacturing process, a high-quality product is
produced without any flaws (zero faults), resulting in cost
reduction for the organization. The third category is PM
Waste and Produce. TQM's primary benefit in product
efficiency lies in its ability to minimize waste and optimize the
production process, leading to enhanced profitability for the
organization. The organizational culture must be transformed
to ensure that every individual and every procedure fully
integrates TQM principles (Eriyanti et al., 2022). The
organization implemented small groups to comprehensively
analyze quality, address consumer preferences, and evaluate
progress and quality. Every group is accountable for attaining
its objectives in alignment with the broader organizational
objectives. Every firm member may effectively fulfill their
assigned obligations by incorporating TQM as an integral part

3. RESULT AND DISCUSSION
3.1. ddefinition of Total Quality Management (TQM) as an
enhancement to the traditional way of doing business
(Khan, 2003) defines Total Quality Management
(TQM) as an improvement to conventional business methods.
Ross (1995) explains the concept of Total Quality
Management, as discussed by Fapohunda and Tinuke (2012).
TTQM refers to the comprehensive integration of all
organizational departments and processes to continuously
enhance the quality of goods and services. TQM) is a business
methodology to optimize corporate competitiveness by
continually improving products, services, individuals,
processes, and the environment (Cholily, 2011; In’am, 2020).
Assert that Total Quality Management is essential for
achieving a flawless manufacturing process through
continuous improvement (Darmayanti et al., 2023). Both
assert that TQM is a business technique to enhance an
organization's competitiveness by consistently improving its
goods (S. et al. et al., 2021), services (In’am, 2009), workforce,
processes, and environmental practices. The theory of Total
Quality Management (TQM) revolves around fostering an
environment wherein employees are empowered to
consistently deliver flawless products or services (zerodefect) and rectify errors in subsequent endeavors.
The benefits of firms adopting overall quality
management (Pratama & Maghfiroh, 2016) are illustrated in
Figure 3.

of the organizational culture. This enables the company to
monitor operational activities closely, promptly address any
faults that may arise, and ensure business continuity in the
face of global competition.
3.2. Company Performance in Total Quality Management
(TQM
A company's management system, which measures
staff performance to enhance performance, determines
product quality (Putriama et al., 2013). Performance
evaluations reveal results. According to Chairman & Lestari
(2011), firm performance evaluation is a system that assigns
values to working conditions and capabilities. The TQM
strategy involves and empowers employees. TQM emphasizes
empowerment and participation. Allowing everyone to
participate in, consider, and follow up on a problem
empowers employees to make better decisions, plans, and
changes. Dinata and Purnawati (2021) found that employee
engagement characteristics boost firm performance. They are
increasing employee involvement by allowing employees to
delegate and be involved, building trust in management and
46

employees, respecting employees' abilities, maintaining
credibility with awards, and improving the work
environment.
Consumer demands and wants are considered, which
does not boost business revenue. Implementing TQM
simultaneously requires special attention to other metrics.
Putri et al. (2017) state that customer focus, involvement and
empowerment, education and training, continuous
improvement, and leadership significantly impact managerial
performance. Previous research (Suartina et al., 2019)
showed that all aspects of TQM, including customer attention,
positively and significantly affected staff productivity and
corporate performance at PT—tomorrow's Antiques
Indonesia. Business success depends on employees. The
questionnaire showed that all MSMEs involve employees in
every production phase. Business development focusing on
one issue is insufficient (Budiarti & Darmayanti, 2020; N.
Nursaid, 2020; N. et al. P. Nursaid et al., 2021). TQM requires
other indicators to meet targets. Employee involvement
inspires work but does not directly boost business. The
partial T hypothesis test shows that MSME performance is
unaffected by employee involvement.
Businesses need continuous improvement. Regular
innovation planning is needed for firm growth and
competitiveness. Studies show that partial and simultaneous
continual
improvement
greatly
impacts
MSMEs'
performance. According to (Kotler & Keller, 2012), constant
improvement or innovation can boost business growth.
Innovation implies adjusting to changing circumstances and
consumer tastes. Suartina et al. (2019) found that all aspects
of TQM, including continuous improvement, boosts firm
performance through employee productivity. Product
efficiency affects TQM productivity.

3.3. Definition of Product Efficiency in Total Quality
Management (TQM)
The definition of product efficiency in TQM refers to
the degree to which a product can perform its intended
function with little waste of resources.
As per Minister of Home Affairs Decree Number 13 of
2006, efficiency means achieving the highest possible output
with a given set of inputs or accomplishing specific outcomes
with the least input. Efficiency, as defined by The Big
Indonesian Dictionary, refers to the capacity to perform
activities effectively and accurately while minimizing the use
of time, energy, and resources. Efficiency can be defined as a
company's capacity to achieve specific outcomes by utilizing
the minimum amount of input to generate output. It also
refers to the ability to execute a task successfully. Production
is creating commodities and services (Bausir et al., 2023).
Production is commonly linked to factories, machinery, and
assembly lines because the techniques and procedures
employed in production management were originally
developed to operate factories and similar activities
(Yuniwati et al., 2024). Production encompasses all the
actions in creating or enhancing an object to satisfy others
through exchange. Production, as defined, is the process by
which inputs are transformed into outputs in the form of
commodities or services (Sungkawati et al., 2024b). That
production refers to the monetary expenditure incurred in
acquiring various inputs, equivalent to the recorded outgoing
monetary amount in accounting.
Production factors are synonymous with inputs, while
the production quantity is commonly called output. A
production function is commonly employed in economics to
delineate the correlation between input and output. The
production function illustrates the inherent connection
between production factors and the quantity of output
generated. In order to evaluate the efficiency of production

costs, it will specifically encompass three elements: efficiency
in raw material costs, efficiency in direct labor expenses, and
efficiency in factory overhead costs. Various experts,
including (N. Nursaid et al., 2024), have provided multiple
definitions of manufacturing costs. "Production cost
efficiency refers to the comparison between the planned
production costs (input) and the actual production costs
(output)." Efficiently managing costs, particularly production
costs, is vital for the company to maximize earnings.
Production cost efficiency refers to evaluating input and
output in a production process. It examines the costs of input
resources utilized during production and the output obtained
from the production process (Sekaryanti et al., 2022;
Yuniwati, Darmayanti, et al., 2023). The calculation of
production efficiency cost can be achieved by utilizing system
cost standards, which involve comparing actual costs with
standard costs or other cost benchmarks. (Khalaf & Hamad,
2023) Propose that production cost efficiency can be
determined by quantitatively measuring the ratio between
input and output. This measurement can be used to assess
efficiency based on system cost standards.
3.4. The Impact of Implementing Total Quality
Management (TQM) on Production Efficiency
There exist multiple prior research findings about the
impact of price establishment on consumer buying capacity,
which include:
The study conducted by Meyliana (2012)
demonstrates that implementing TTQM at PT BINTANG
ALAM SEMESTA benefits the company's performance
measurement system. This includes enhancing the product
development process and improving production cost
efficiency by aligning product development with market
demands, thereby creating additional value for the company.
Moreover, the company effectively reduced costs and
achieved production cost efficiency in 2009 by implementing
control, supervision, corrective action, preventive action, and
quality product enhancements. The study by Sudiantini et al.
(2023) and research conducted at CV Daeng Kuliner
Makassar demonstrate that adopting Total Quality
Management positively correlates with improved production
cost efficiency. This is a strong correlation between the
application of Total Quality Management and the efficiency of
production costs. (Yuniwati, Novitasari, et al., 2023) Describe
the application of Total Quality Management at PT. Total
Quality Management, consisting of ten key components, has
the potential to enhance profitability by improving
operational cost-effectiveness. Before implementing TQM,
the company's production cost efficiency was -9.57%
(Hendarto et al., 2024). However, after implementing TQM,
the production cost efficiency increased to 14.55%, resulting
in a 24.15% improvement in efficiency. According to the
findings (Irsutami, 2015), the research indicates that the six
TQM components, namely customer focus, obsession with
quality, teamwork, level improvement, education and
training, and empowerment, do not impact partial quality
costs in manufacturing companies in Batam. The six
components of TQM utilized as variables in the research
(Dahliani et al., 2024), namely customer focus, quality
obsession, teamwork, continuous improvement, education
and training, and empowerment, do not simultaneously
impact quality expenses. The modified R2 value of 0.005,
equivalent to 0.5%, suggests a very low level of quality cost
efficiency. This can be attributed to the emphasis on customer
satisfaction, strong commitment to quality, collaborative
teamwork, enhanced relationships, continuous education and
training, empowerment, and ongoing development.
It occurred immediately after, according to a study by
(Haanurat et al., 2024; N. Hasanah et al., 2022) at PT. Presindo
Central, the implementation of TQM in performance
measurement systems impacts the efficiency of production
47

costs. The study found that as the quality costs of the products
increase, it negatively affects the efficiency of production
costs. Presindo Central decreased the quantity of faulty items
by 6.9%, thereby mitigating the impact of defective products
on the overall quality of the manufactured goods. While the
company has demonstrated its ability to manufacture highquality products, it is imperative to optimize manufacturing
costs to minimize inefficiencies in the production process.
Raising the cost of product quality will impact manufacturing
cost efficiency. According to (N. Nursaid et al., 2023), TQM
benefits the performance of MSMEs. Entrepreneurial
orientation positively impacts TQM. TQM serves as an
intermediary factor in mediating the connection between the
independent variable of entrepreneurial orientation and the
dependent variable of performance in micro, small, and
medium enterprises (MSMEs). (Awad et al., 2023) posits that
the findings from the preceding section can be construed as
follows: TQM has a substantial and positive impact on
company performance; quality costs also have a significant
and positive influence on company performance; and there
exists a positive and significant correlation between total
quality management (Hendarto et al., 2023; Utomo et al.,
2023). According to research, Total Quality Management was
effectively implemented through collaboration between
employees and management. The reference is from the study
conducted by Hernawan et al. in 2014. The reward system
variable is an independent variable with the least impact on
managerial performance. Suggests implementing the reward
system at PT. Taspen (Persero) Semarang Main Branch Office
will enable future researchers to conduct similar studies on
subjects with a broader scope, such as examining managerial
performance in regional companies or other regional-owned
enterprises (BUMN). Furthermore, according to (Jothr et al.,
2023), TQM has an impact on employee performance,
indicating that there is no substantial correlation between
TQM (X1) and employee performance (Y). The influence of
organizational culture on employee performance is
characterized by a significant correlation between
organizational culture (X2) and employee performance (Y).
In today's fiercely competitive period, the
proliferation of enterprises in the food sector necessitates
that organizations possess the ability to compete effectively.
One of them is managing corporate operations with efficiency
and effectiveness. Costs play a crucial role in facilitating
business operations and achieving organizational objectives
in any firm. The costs have been accurately assessed to
achieve cost efficiency. To enhance cost efficiency, it is
imperative to curtail production costs, which constitute
significant expenses enterprises bear during manufacturing.
Production based on future predictions in traditional systems
carries a higher risk of loss than production driven by real
demand, primarily due to overproduction (Yulianti, 2013).
The commercial manufacturing system is highly efficient as it
operates on a made-to-order basis, minimizing the risk of
potential losses for the company. The ultimate objective in
managing time is not to reduce inventory levels to zero but to
minimize inventories to achieve lower levels (Aryaseta et al.,
2023; Pandia et al., 2022). TQM is a Methodical Approach
Organizations use to ensure high-quality standards in their
products and services (Dullah et al., 2024), focusing on
meeting the needs and expectations of consumers and
markets. Gaspersz (2010) argues that organizations can
improve managerial efficiency, overall quality, and
performance by enhancing creative quality and addressing
issues through fact-based analysis and problem-solving.
The procurement or provision of raw materials for
the production process is unpredictable due to factors such as
excessive storage of raw materials (Sungkawati, Usmiyatun,
et al., 2023), fluctuating production demand, and uncertainty
in information, such as incorrect order quantities and
excessive costs incurred from purchasing raw materials
without potential buyers for spoilage or excessive production.

Simultaneously, firms demand high quality, cost reduction,
and the elimination of waste related to the storage or supply
of raw materials. Hence, organizations that endure in the
commercial milieu can manufacture superior items, minimize
inventory expenses, and adjust production levels per
consumer demand. The fierce competition among all business
units inside the organization demonstrates their ability to
achieve cost savings in production and inventories.
Furthermore, they have managed to survive and effectively
carry out their manufacturing operations thus far.

4. CONCLUSION
The implementation of TQM has a positive impact on
the efficiency of production costs, particularly in the food
manufacturing industry. Applying TQM in operational
management can lead to developing high-quality products
and enable organizations to minimize production costs by
eliminating wasteful practices. The increase in manufacturing
expenses due to improving the quality of the products will
impact production efficiency. The author argues that it is
important to enhance the adoption of TQM in the organization
to regulate manufacturing activities. The procurement or
provision of raw materials for the production process is
unpredictable due to excessive storage of raw materials,
fluctuating production demand, and uncertainty in
information, such as incorrect order quantities. Additionally,
additional costs may be incurred from excess purchases of
raw materials due to the absence of potential buyers for
spoilage and excessive production of a particular material.
Simultaneously, firms demand high quality, cost reduction,
and elimination of waste related to the storage or supply of
raw materials.

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