Impact of Total Quality Management on Business Performance at DIY MSMEs Mediated by Customer Satisfaction and Moderated by the JIT

Authors

  • Nurul Faroh Almuna Universitas Nahdlatul Ulama Yogyakarta
  • Novi Diah Wulandari Universitas Nahdlatu Ulama Yogyakarta
  • Rifqi Syarif Nasrulloh Universitas Nahdlatul Ulama Yogyakarta

DOI:

https://doi.org/10.37301/jmubh.v20i1.27021

Abstract

The research investigates how Total Quality Management (TQM) influences company performance, with customer satisfaction acting as a mediator and the Just In Time (JIT) concept functioning as a moderator. This study specifically targets micro, small, and medium enterprises (MSMEs) in the food and craft industries in Yogyakarta. With a quantitative methodology, the study uses purposive and non-probability sampling techniques to collect data from 125 participants in DI Yogyakarta. The Smart-PLS application is used to analyze data using structural equation modeling (SEM) methods.The findings showed that total quality management (TQM) significantly improves positive effect both customer satisfaction and business perfomance. However, there is also a strong positive correlation between customer satisfaction and business performance. Other results show that the JIT variable improves business performance, but has a negative and insignificant impact in moderating the effect of TQM that it can actually weaken MSMEs TQM. MSMEs' commitment to maintaining product quality is the main thing that affects customer satisfaction and improves business performance. Thus, strict supervision is needed in the production process, including quality data collection, supplier selection, employee training, production timeliness, as well as regular inspections.

References

Aburayya, A., Alshurideh, M., Marzouqi, A., Diabat, O., Alfarsi, A., Suson, R., Salloum, S., Alawadhi, D., & Alzarouni, A. (2020). Critical Success Factors Affecting the Implementation of TQM in Public Hospitals: A Case Study in UAE Hospitals. Systematic Reviews in Pharmacy, 11, 230–242.

Achanga, P., Shehab, E., Roy, R., & Nelder, G. (2006). Critical success factors for lean implementation within SMEs. Journal of Manufacturing Technology Management, 17(4), 460–471.

Agyapong, A., Afi, J. D., & Kwateng, K. O. (2018). Examining the effect of perceived service quality of health care delivery in Ghana on behavioural intentions of patients: The mediating role of customer satisfaction. International Journal of Healthcare Management, 11(4), 276–288. https://doi.org/10.1080/20479700.2017.1326703

Alawag, A. M., Alaloul, W. S., Liew, M. S., Baarimah, A. O., Musarat, M. A., & Al-Mekhlafi, A.-B. A. (2023). The Role of the Total-Quality-Management (TQM) Drivers in Overcoming the Challenges of Implementing TQM in Industrialized-Building-System (IBS) Projects in Malaysia: Experts’ Perspectives. Sustainability, 15(8), 6607. https://doi.org/10.3390/su15086607

Ali, B. J., Saleh, P. F., Akoi, S., Abdulrahman, A. A., Muhamed, A. S., Noori, H. N., & Anwar, G. (2021). Impact of Service Quality on the Customer Satisfaction: Case study at Online Meeting Platforms. International Journal of Engineering, Business and Management, 5(2), 65–77. https://doi.org/10.22161/ijebm.5.2.6

Anderson, E. W., & Sullivan, M. W. (1993). The antecedents and consequences of customer satisfaction for firms. Marketing Science, 12(2), 125–143.

Anggadwita, G., & Mustafid, Q. Y. (2014). Identification of Factors Influencing the Performance of Small Medium Enterprises (SMEs). Procedia - Social and Behavioral Sciences, 115, 415–423. https://doi.org/10.1016/j.sbspro.2014.02.448

Arifin, S., Darmawan, D., Hartanto, C. F. B., & Rahman, A. (2022). Human Resources based on Total Quality Management. Journal of Social Science Studies (JOS3), 2(1), 17–20. https://doi.org/10.56348/jos3.v2i1.22

Aryanny, E., & , I. (2020). Analysis of Quality Management by Implementing Total Quality Management Based on Deming Prize. Journal of Physics: Conference Series, 1569. https://doi.org/10.1088/1742-6596/1569/3/032015.

Assensoh-Kodua, A. (2019). The resource-based view: a tool of key competency for competitive advantage. Problems and Perspectives in Management. https://doi.org/10.21511/PPM.17(3).2019.12.

Ayodeji, I. O., Emmanuel, O. O., & Olajiire, E. O. (2021). Impact of total quality management on organizational performance. International Journal of Research in Commerce and Management Studies, 3(3), 21–32.

Benzaquen, J., & Charles, V. (2022). A stratified bootstrapping approach to assessing the success of TQM implementation in Peruvian companies. Total Quality Management & Business Excellence, 33(1–2), 178–201. https://doi.org/10.1080/14783363.2020.1816165

Biswas, P., & Sarker, B. (2020). Operational planning of supply chains in a production and distribution center with just-in-time delivery. Journal of Industrial Engineering and Management, 13(2), 332. https://doi.org/10.3926/jiem.3046

Chahal, H., Gupta, M., Bhan, N., & Cheng, T. C. E. (2020). Operations management research grounded in the resource-based view: A meta-analysis. International Journal of Production Economics, 230, 107805. https://doi.org/10.1016/j.ijpe.2020.107805

Demirbag, M., Tatoglu, E., Tekinkus, M., & Zaim, S. (2006). An analysis of the relationship between TQM implementation and organizational performance. Journal of Manufacturing Technology Management, 17(6), 829–847. https://doi.org/10.1108/17410380610678828

Dennis, P. (2017). Lean production simplified: a plain-language guide to the world’s most powerful production system.

Desiyanti, R., Husin, N. A., Elvira, R., Sefnedi, S., Putri, T. D., & Chrismondari, C. (2023). The Influence of Financial Literacy, Financial Management, and Financial Technology on Business Performance And Sustainability of Micro, Small, and Medium Enterprises In Sumatera, Indonesia. Jurnal Manajemen Universitas Bung Hatta, 18(2), 231-244. https://doi.org/10.37301/jmubh.v18i2.23238

Dhawan, A. P. (2023). A Review on JIT Manufacturing Key Elements, Inventory, Production and Implementation. INTERANTIONAL JOURNAL OF SCIENTIFIC RESEARCH IN ENGINEERING AND MANAGEMENT, 07(03). https://doi.org/10.55041/IJSREM18341

D’Oria, L., Crook, T. R., Ketchen, D. J., Sirmon, D. G., & Wright, M. (2021). The Evolution of Resource-Based Inquiry: A Review and Meta-Analytic Integration of the Strategic Resources–Actions–Performance Pathway. Journal of Management, 47(6), 1383–1429. https://doi.org/10.1177/0149206321994182

Drouvelis, M., & Paiardini, P. (2022). Feedback quality and performance in organisations. The Leadership Quarterly, 33(6), 101534. https://doi.org/10.1016/j.leaqua.2021.101534

Farahani, A., & Tohidi, H. (2021). Integrated optimization of quality and maintenance: A literature review. Computers & Industrial Engineering, 151, 106924. https://doi.org/10.1016/j.cie.2020.106924

F. Hair Jr, J., Sarstedt, M., Hopkins, L., & G. Kuppelwieser, V. (2014). Partial least squares structural equation modeling (PLS-SEM). European Business Review, 26(2), 106–121. https://doi.org/10.1108/EBR-10-2013-0128

Fitriani, F. (2019). PERSIAPAN TOTAL QUALITY MANAGEMENT (TQM). Adaara: Jurnal Manajemen Pendidikan Islam, 9(2), 908–919. https://doi.org/10.35673/ajmpi.v9i2.426

Goetsch, D. L., & Davis, S. B. (2016). Quality management for organizational excellence: Introduction to total quality.

Guenther, M., & Guenther, P. (2021). The complex firm financial effects of customer satisfaction improvements. International Journal of Research in Marketing, 38(3), 639–662. https://doi.org/10.1016/j.ijresmar.2020.10.003

Gu, S. (2023). The effect of overall service quality on customer satisfaction: The moderating role of travel experience. Turyzm/Tourism, 33(1), 19–28. https://doi.org/10.18778/0867-5856.33.1.02

Habib, M., Abbas, J., & Noman, R. (2019). Are human capital, intellectual property rights, and research and development expenditures really important for total factor productivity? An empirical analysis. International Journal of Social Economics, 46(6), 756–774. https://doi.org/10.1108/IJSE-09-2018-0472

Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1995). Multivariate data analysis withreadings. NewYork, NY: PrenticeHall.

Hassan, A. S., & Jaaron, A. A. M. (2021). Total quality management for enhancing organizational performance: The mediating role of green manufacturing practices. Journal of Cleaner Production, 308, 127366. https://doi.org/10.1016/j.jclepro.2021.127366

Hayes, B. E. (2008). Measuring customer satisfaction and loyalty: survey design, use, and statistical analysis methods.

Heizer, J., Render, B., & Munson, C. (2020). Operations management: sustainability and supply chain management.

Ishaq Bhatti, M., Awan, H. M., & Razaq, Z. (2014). The key performance indicators (KPIs) and their impact on overall organizational performance. Quality & Quantity, 48(6), 3127–3143. https://doi.org/10.1007/s11135-013-9945-y

Jacobs, F. R., & Chase, R. B. (2018). Operations and supply chain management.

Kannan, V. R., & Tan, K. C. (2005). Just in time, total quality management, and supply chain management: understanding their linkages and impact on business performance. . Omega, 33(2), 153–162.

Karim, S., & Qamruzzaman, M. D. (2020). Corporate culture, management commitment, and HRM effect on operation performance: The mediating role of just-in-time. Cogent Business & Management, 7(1), 1786316. https://doi.org/10.1080/23311975.2020.1786316

Kazakov, O. S., & Valijonov, S. (2021). Competitive Environment, Quality And Its Management In The Digital Economy. The American Journal of Applied Sciences, 03(04), 119–125. https://doi.org/10.37547/tajas/Volume03Issue04-16

Khajavi, S. H., Salmi, M., & Holmström, J. (2024). Operations Management of Additive Manufacturing. IFIP International Conference on Advances in Production Management Systems, 353–377.

Khalfallah, M., & Lakhal, L. (2021). The relationships between TQM, TPM, JIT and agile manufacturing: an empirical study in industrial companies. The TQM Journal, 33(8), 1735–1752. https://doi.org/10.1108/TQM-12-2020-0306

Kholik, A., & Laeli, S. (2020). Keunggulan Bersaing Berkelanjutan Sekolah Alam Berbasis Model Resource-Based View. TADBIR MUWAHHID, 4(1), 73. https://doi.org/10.30997/jtm.v4i1.2540

Le, T. T. (2023). The boosting of the total quality management on corporate green growth in emerging markets: the mediating roles of corporate social responsibility and customer loyalty. Benchmarking: An International Journal, 30(9), 3554–3589. https://doi.org/10.1108/BIJ-10-2021-0626

Lepistö, K., Saunila, M., & Ukko, J. (2022). Enhancing customer satisfaction, personnel satisfaction and company reputation with total quality management: combining traditional and new views. Benchmarking: An International Journal. https://doi.org/10.1108/bij-12-2021-0749.

Lim, L. G., Tuli, K. R., & Grewal, R. (2020). Customer Satisfaction and Its Impact on the Future Costs of Selling. Journal of Marketing, 84(4), 23–44. https://doi.org/10.1177/0022242920923307

Lone, R. A., & Bhat, M. A. (2023). The Role of Customer Satisfaction as a Mediator Between Product Quality and Customer Loyalty. International Journal of Management and Development Studies, 12(06), 13–31. https://doi.org/10.53983/ijmds.v12n06.002

Macinati, M. S. (2008). The relationship between quality management systems and organizational performance in the Italian National Health Service. Health Policy, 85(2), 228–241. https://doi.org/10.1016/j.healthpol.2007.07.013

Malhotra, G., Dandotiya, G., Shaiwalini, S., Khan, A., & Homechaudhuri, S. (2024). Benchmarking for organisational competitiveness: a resource-based view perspective. Benchmarking: An International Journal. https://doi.org/10.1108/bij-09-2023-0668.

Manori P. Kovilage, Saman T.W.S. Yapa, & Champa Hewagamage. (2022). A Comprehensive Definition for ‘Operational Excellence.’ Vidyodaya Journal of Management, 8(II). https://doi.org/10.31357/vjm.v8iII.6089

Ming, F. (2023). Exploring the Impact of Total Quality Management (TQM) on Employee Satisfaction and Performance in Manufacturing Industries. Journal of Digitainability, Realism & Mastery (DREAM), 2(02), 45–50. https://doi.org/10.56982/dream.v2i02.88

Mohamed Ali, O. (2020). The Roles of Relationships and Service Quality as Drivers of Customer Loyalty: An Empirical Study. Open Journal of Social Sciences, 08(04), 14–32. https://doi.org/10.4236/jss.2020.84002

Nguyen, T. L. H., & Nagase, K. (2019). The influence of total quality management on customer satisfaction. International Journal of Healthcare Management, 12(4), 277–285. https://doi.org/10.1080/20479700.2019.1647378

Nugroho, A., Christiananta, B., Wulani, F., & Pratama, I. (2020). Exploring the Association Among Just in Time, Total Quality and Supply Chain Management Influence on Firm Performance: Evidence from Indonesia. International Journal of Supply Chain Management, 9, 920–928.

Okon, E. O. (2018). MSMEs Performance in Nigeria: A Review of Supply Chain Collaboration Challenges. International Journal of Marketing Research Innovation, 2(1), 16–30. https://doi.org/10.46281/ijmri.v2i1.103

Otto, A. S., Szymanski, D. M., & Varadarajan, R. (2020). Customer satisfaction and firm performance: insights from over a quarter century of empirical research. Journal of the Academy of Marketing Science, 48(3), 543–564.

Panichayakorn, T. (2020). Mediating Effect of Supply Chain Capabilities on the Relationship of Data Driven Supply Chain Management and Business Performance: A Study of the Manufacturing Industry. International Journal of Supply Chain Management, 9, 325–332.

Pekkaya, M., Pulat İmamoğlu, Ö., & Koca, H. (2019). Evaluation of healthcare service quality via Servqual scale: An application on a hospital. International Journal of Healthcare Management, 12(4), 340–347. https://doi.org/10.1080/20479700.2017.1389474

Permana, A., Purba, H. H., & Rizkiyah, N. D. (2021). A systematic literature review of Total Quality Management (TQM) implementation in the organization. International Journal of Production Management and Engineering, 9(1), 25. https://doi.org/10.4995/ijpme.2021.13765

Popov, A. (2023). Modern Approaches to the Implementation and Use of Lean Production Models. BIO Web of Conferences, 76, 02002. https://doi.org/10.1051/bioconf/20237602002

Pratiwi, N. A., Susilowati, E., Syukriah, S., Pianda, D., & Susanti, E. (2023). The Quality Performance of Manufacturing Companies in West Java: SCM, TQM, and JIT Impact. Jurnal Informatika Ekonomi Bisnis, 785–790. https://doi.org/10.37034/infeb.v5i3.646

Ralahallo, F. N. (2021). The Effect of Just in time (JIT) and Supply Chain Management on Company Performance at Seafood Restaurants in Ambon City. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(7), 1528–1537.

Ramlawati, & Putra, A. H. P. K. (2018). Total Quality Management as the Key of the Company to Gain the Competitiveness, Performance Achievement and Consumer Satisfaction. International Review of Management and Marketing, 8(5), 60–69.

Richard, P. J., Devinney, T. M., Yip, G. S., & Johnson, G. (2009). Measuring organizational performance: Towards methodological best practice. Journal of Management, 35(3), 718–804.

Riepina, I., & Tepliuk, M. (2023). QUALITY MANAGEMENT OF BUSINESS PROCESSES AT ENTERPRISES. Actual Problems of Economics, 1(263), 65–72. https://doi.org/10.32752/1993-6788-2023-1-263-65-72

Salaheldin, S. I. (2009). Critical success factors for TQM implementation and their impact on performance of SMEs. International Journal of Productivity and Performance Management, 58(3), 215–237.

Sandberg, D., Fink, G., Hasener, J., Kairi, M., Marhenke, T., Ross, R. J., Steiger, R., & Wang, X. (2023). Process Control and Grading in Primary Wood Processing (pp. 1019–1073). https://doi.org/10.1007/978-3-030-81315-4_20

Sariyer, G., Mangla, S. K., Kazancoglu, Y., Ocal Tasar, C., & Luthra, S. (2021). Data analytics for quality management in Industry 4.0 from a MSME perspective. Annals of Operations Research. https://doi.org/10.1007/s10479-021-04215-9

Sashkin, M., & Kiser, K. J. (1993). Putting total quality management to work: what TQM means, how to use it, & how to sustain it over the long run. . Berrett-Koehler Publishers.

SATHISHKUMAR, A. S., & SHANMUGANATHAN, J. (2019). A STRUCTURAL RELATIONSHIP BETWEEN TQM PRACTICES AND ORGANIZATIONAL PERFORMANCE WITH REFERENCE TO SELECTED AUTO COMPONENT MANUFACTURING COMPANIES. INTERNATIONAL JOURNAL OF MANAGEMENT, 10(5). https://doi.org/10.34218/IJM.10.5.2019/009

Sebtaoui, F. E., Adri, A., Rifai, S., & Sahaf, K. (2021). The impact of risks management in the success of JIT implementation: Structural equations modeling for relational analysis in the Moroccan industry. Quality Management Journal, 28(4), 190–204. https://doi.org/10.1080/10686967.2021.1962772

Sharma, D. R., & Singh, B. (2023). Understanding the Relationship Between Customer Satisfaction, Customer Engagement and Repeat Purchase Behaviour. Vision: The Journal of Business Perspective, 27(4), 449–457. https://doi.org/10.1177/0972262921992593

Shelke, R., Kuwar, A., & Ramachandran, M. (2021). A Study on Just in Time Application in Flexible Manufacturing System. REST Journal on Emerging Trends in Modelling and Manufacturing, 7(1). https://doi.org/10.46632/7/1/1

Sim, K. L., & Killough, L. N. (1998). The performance effects of complementarities between manufacturing practices and management accounting systems. Journal of Management Accounting Research, 10, 325–346.

Singh, G. K., & Dadhich, M. (2021). Impact of Total quality management on operational performance of Indian cement manufacturing industry-a structural equation remodeling approach. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(7), 22–41.

Singh, V., Kumar, A., & Singh, T. (2018). Impact of TQM on organizational performance: The case of Indian manufacturing and service industry. Operations Research Perspectives, 5, 199–217.

Sit, W., Ooi, K., Lin, B., & Yee‐Loong Chong, A. (2009). TQM and customer satisfaction in Malaysia’s service sector. Industrial Management & Data Systems, 109(7), 957–975. https://doi.org/10.1108/02635570910982300

Smith, A. (2019). JIT Inventory Management Strategy. Advances in Library and Information Science. https://doi.org/10.4018/978-1-5225-9531-1.CH005.

Suleiman, M. A., Huo, B., & Ye, Y. (2021). Linking supplier JIT to flexibility performance: the moderating impact of advanced manufacturing technology and human resource empowerment. Industrial Management & Data Systems, 121(11), 2237–2253. https://doi.org/10.1108/IMDS-02-2021-0096

Talha, M. (2004). Total quality management (TQM): an overview. The Bottom Line, 17(1), 15–19. https://doi.org/10.1108/08880450410519656

Tasleem, M., Khan, N., & Nisar, A. (2018). Impact of Total Quality Management and Environmental Management System on Sustainable Performance of Selected Industries in Pakistan. Journal of Environmental Science and Management, 21(2), 30–38. https://doi.org/10.47125/jesam/2018_2/05

Thapliyal, B. (2023). Factors determining total quality management in the manufacturing industries: An empirical study. Psychologyandeducation, 55(01). https://doi.org/10.48047/pne.2018.55.1.41

Ugwu, K. (2023). Aligning Total Quality Management, Continuous Improvement for Process Performance: An Empirical Review. Journal Research of Social Science, Economics, and Management, 3(2), 352–369. https://doi.org/10.59141/jrssem.v3i02.532

Upadhye, V. S. (2020). Level of Commitment to Top Management regarding the TQM Implementation. International Journal for Research in Applied Science and Engineering Technology, 8(11), 179–181. https://doi.org/10.22214/ijraset.2020.32100

Wijaya, S. V., Tarigan, Z. J. H., & Siagian, H. (2023). The role of top management commitment, employee empowerment and total quality management in production waste management and enhancing firm performance. Uncertain Supply Chain Management, 11(3), 1369–1382. https://doi.org/10.5267/j.uscm.2023.3.011

Yamin, M .Z., Gaffar V., & Andriana, D. (2024). Analyzing of Barberbos Consumer Purchase Decision Stages in Picking Barbershop. Jurnal Manajemen Universitas Bung Hatta, 19(2), 221-231. https://doi.org/10.37301/jmubh.v19i2.25541.

Yulianto, A., & Wahyuni, S. (2022). INTERNAL QUALITY ASSURANCE : MECHANISM OF TOTAL QUALITY MANAGEMENT. EPRA International Journal of Environmental Economics, Commerce and Educational Management, 50–53. https://doi.org/10.36713/epra11833

Zahra, S. (2021). The Resource-Based View, Resourcefulness, and Resource Management in Startup Firms: A Proposed Research Agenda. Journal of Management, 47, 1841 - 1860. https://doi.org/10.1177/01492063211018505.

Downloads

Published

2025-01-31

Issue

Vol. 20 No. 1 (2025): Jurnal Manajemen Universitas Bung Hatta

Section

Articles

License

Copyright (c) 2025 Nurul Faroh Almuna, Novi Diah Wulandari, Rifqi Syarif Nasrulloh

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Authors who publish with Jurnal Manajemen Universitas Bung Hatta agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Creative Commons Attribution-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in Jurnal Manajemen Universitas Bung Hatta. 
  2. The author holds the copyright of the submitted and published articles, with the understanding that articles are disseminated under the Creative Commons Attribution-ShareAlike 4.0 International License..
  3. The editor team is entitled to do the editing in accordance with the guidelines for writing or template in the Jurnal Manajemen Universitas Bung Hatta.

 

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.