Total Quality Management

Table of contents List of figures…………………………………………………………. iii 1. Introduction………………………………………………………1 2. The Foundations of TQM……………………………………….. 2 1. Quality……………………………………………………2 2. Evolution of TQM………………………………………. 2 3. Relevance and practice of TQM…………………………………3 4. Costs of quality…………………………………………………. 6 5. Quality standard and Awards……………………………………7 6. Implementation of TQM………………………………………… 8 1. Key elements of TQM……………………………………9 2. Implementation issues……………………………………12 7. Conclusion………………………………………………………12 Appendix……………………………………………………………. 3 Bibliography…………………………………………………………14 ii List of Figures 1. Foundations of TQM………………………………………………. 4 2. The PDCA cycle……………………………………………………5 3. Cost of quality model………………………………………………6 4. THE EFQM Excellence model……………………………………. 8 5. Key elements of TQM…………………………………………….. 9 6. Framework for TQM implementation……………………………. 11 iii 1 1. 0 Introduction In today’s world, organisations need to compete in order to survive in the marketplace and quality has been identified as the most important basis for this competition (Oakland, 2003).

There is hardly any organisation that does not know the importance of quality management to remain competitive and meet customers’ expectations. The major challenge however lies in the implementation of quality management. The concept of quality management was pioneered by American gurus such as Armand Feigenbaum, Joseph Juran and Edwards Demin. They took the message to Japan in the early 1950s. The Japanese companies popularized the concept of TQM; first undertaking its commercial applications after the concept was extended and further developed by Japanese gurus notably Genichi Taguchi, Kaoru Ishikawa and Shigeo Shingo (Beckford, 2002).

Embracing quality management practices in the 1950s changed Japan’s notoriety for cheap imitation products to being recognized for cheap high quality ones. This paved way for Japan’s imports into Europe and USA, bringing about the revival of the ailing Japan’s industrial system. The success in Japan’s industry caused a revolution in the west during the early 1980s and Total Quality Management (TQM) became a standard global practice. What is TQM? TQM is basically a metamorphosis of the traditional quality approach of inspection-based quality control and quality assurance control.

It is a holistic approach to quality management with particular attention to the role played by the people within an organisation and different parts of the organisation to promote quality. (Stack, Chambers & Johnston, 2007). The aim of TQM is to help organisations achieve excellent performance by getting it right the first time. Its relevance to the contemporary business environment is stressed by the establishment of International standardization organisation (ISO) 9000, which is the internationally recognized standard for quality management systems.

There are also three major bodies which give awards to organisations in recognition of best quality management practices. These include the ‘Demin Prize’ in Japan, the ‘Malcolm Baldrige National Quality Award’ in the U. S. and the ‘European Foundation for Quality Management’ (EFQM) award. This report seeks to examine the role and usefulness of TQM to the contemporary business environment and how it can be successfully implemented and improved upon by organisations. 2 2 The Foundations of TQM 1.

Quality When high quality is embedded in manufacturing, it will lead to increased sales, hence, higher revenue and reduced production costs through better efficiency. We can therefore conclude that the success of any organisation is tied to the quality of its products or services. In operations, the quality of a good or service is viewed as a consistent conformance to customers’ expectation whereas from the customers’ viewpoint, quality is what the consumer perceives the product or service to be.

A balanced view of quality therefore will measure how much customer expectation of a product or service matches customers’ perception of it. (Stack, Chambers & Johnston, 2007). In meeting customers’ expectation, the first step is to design the product or service. Quality of design measures how well the product or service is designed to meet the agreed requirements and it is during this process that specifications for the product or service are drawn up. Quality also needs to be controlled. By this, we refer to techniques used to achieve and maintain quality.

Quality assurance is aimed at preventing quality problems from occurring through systematic planning. (Oakland, 2003) 2. Evolution of TQM In the early days of manufacturing, the role of quality management was merely inspection i. e. to screen out defects after production. As companies grew in size, the functions of quality management also expanded to include defect prevention. Inspection became a separate department with the need to cater for training of inspectors, creating and adhering to standards as well as keeping data records and ensuring the accuracy of the measuring equipments.

This increased responsibilities necessitated the creation of quality control department with the additional function of the treatment of quality problems. The birth of quality assurance which makes use of statistical quality techniques involves functions which have no direct bearing to the manufactured products in quality management. TQM includes the above functions of quality management and also has a wider concept, involving everyone in the organisation and every part of it. 3 2. Relevance and practice of TQM TQM is a philosophy that stresses that quality should be the watchword in every operation within an organisation.

It lays emphasis on meeting customers’ needs and expectations and that quality management should be embedded in every part of the organisation, not made the job of a particular department or some appointed persons within the organisation. It goes further to argue that no matter the role of anyone within an organisation, he has a bearing directly or indirectly on quality. Quality can be improved when everyone finds better ways of doing things and also help others to achieve same. TQM can only succeed when everyone is involved.

Krafts General Foods Canada (KGFC) and many other companies illustrate this, as they initially failed in their effort to implement TQM due to a lack of commitment from staff (Keiser and Douglas, 1993). It is argued that no organisation can be truly effective if every department and each person within the organisation at whatever position does not synchronize in carrying out their activities. (Muhlemann, Oakland, and Lockyer, 1992) The practice of TQM also requires that everyone should be seen as an internal supplier and is at the same time an internal customer to others within the organisation.

This internal customer-supplier relationship is a ‘quality chain’ and can be broken at any point if customer requirements are not met. This failure then multiplies and creates problems elsewhere and the situation becomes exacerbated until it gets to the external customer. This could have damaging effects to the business and the only way to forestall this is to ensure that each internal customer is satisfied at every process until it gets to the external customer. One way to ensure this is for every internal customer or supplier to define what their role is as well as what their customers’ requirements are.

This would ensure that errors can be detected at an early stage before they become very expensive to fix. (Stack, Chambers & Johnston, 2007). The core of TQM is customer-supplier interface (both external and internal) and at each interface lie a number of processes as illustrated in fig. 1. This core must be surrounded by commitment to quality, communication of the quality message, and recognition of the need to change the culture of the organisation. These are the foundations of TQM and they are supported by key management functions of people, processes and systems within the organisation. Fig. 1: Foundations of TQM (Oakland, 2003) Wal-mart, one of the most successful and largest retail companies in the world is known to embed TQM in its operation. One of the secrets of their success is due to the fact that they strictly demand quality from their suppliers. (Kurtus, 2007) TQM emphasizes that quality can and must be managed. Organisations that imbibe quality maintenance in their culture often record tremendous success. For example, a quality improvement team visited Craftex mill inc. hen the company had a very serious problem due to a fault in their production process and discovered that the problem was due to the machine maintenance program. Solving this problem made the company realize over 100 percent return on their investment for a 500 thousand dollar capital improvement project. (Avery & Zabel, 1997) Goals should be set by every unit of the organisation strictly based on requirement and should not in any way be compromised or negotiated. To achieve this, the quality of a sample product or service must be measured using some form of sampling. This sampling can be done using either of two methods.

The first is the statistical process control (SPC) which samples processes to see whether there are anomalies while the production of goods or delivery of service is in progress. The second is the acceptance sampling method in which the decision to accept the whole batch or to reject it is based on the outcome of a particular product or service picked at random. The use of sampling technique has the tendency to give rise to making erroneous judgment about the outcome. This error can be: type I, involving making corrections when no correction is required or type II in which no correction is made when it is actually required.

Although both methods carry some degree of risks, the latter is considered more risky and intolerable if quality is to be improved because it assumes, contrary to the message of TQM, that some degree of error or failure is unavoidable in an operation. Therefore, the SPC technique is more commonly used and control chart is one important tool which it uses to monitor the performance progress of some quality characteristics in an operation. (Stack, Chambers & Johnston, 2007) For continuous improvement in TQM, a PDCA cycle also known as Deming wheel can be applied. [pic] Fig. 2: The PDCA cycle (source: HCI)

As shown in the fig. 2, there are four basic steps in the PDCA cycle. Planning starts with problem identification within an operation and solution generation. Next comes the doing, to experiment on a small scale to see if the proffered solution will work or not. The next step is checking to see whether or not the desired quality is being achieved and if there is any other problem. Finally, with act changes are implemented on a larger scale and also others are trained. If the change works, the cycle is started again by planning on new improvements otherwise a different plan will be chosen. Tague, 2004). 6 3. Costs of quality This refers to the direct and indirect costs which an organisation incurs for not having an efficient quality system in place. (Beckford, 2002) Prevention costs as the name implies, are incurred in trying to prevent errors in the first place by identifying potential problems and then correcting the procedure before the errors are made. Appraisal costs on the other hand are incurred in the process of verifying whether or not an error has occurred during product manufacture or while rendering service.

This includes for example, the time and effort spent to inspect products or services before and after execution. Internal failure costs are associated with correcting errors during an operation such as reworked parts. External failure costs are incurred if the error is discovered by the customer. It includes costs incurred in replacing a product or service. (Stack, Chambers & Johnston, 2007). This type of cost may be very expensive and should be avoided at all costs as the organisation stands the risk of losing the customer. The philosophy of TQM is to prevent errors from occurring in the first place by doing things right the first time.

It supports putting all effort towards prevention of errors and argues that this will eventually lead to reduction in other costs of quality. Figure 3 (a) The traditional cost of quality model, and (b) the traditional cost of quality model with adjustments to reflect TQM criticisms (Stack, Chambers & Johnston, 2007) 7 Fig. 3 shows that increasing the expenditure and effort on prevention will lead to more-than-equivalent savings in other costs. 4. Quality standard and awards Many companies lack guidance and direction on good quality management procedure.

This led to the establishment of a set of worldwide standards that gives requirements for company’s quality management systems, ISO 9000. There are different versions of ISO 9000. The revised version 2000 has four major principles: Quality management should be customer focused. Customer satisfaction should be measured through surveys and focus groups and improvements made should be properly documented. Quality performance should be measured and analyzed so as to understand processes. Measurements should include the processes used to create the product or service and also customer satisfaction with those products or services.

Quality management should be improvement-driven both in the creation of products and services and also in customer satisfaction Top management must show commitment to the practice of quality management and provide a clear definition and importance of quality practice, the establishment of quality policies and objectives etc. Because ISO 9000 (2000) provides guidance for organisations on the design of quality process and also gives assurance to customers that the product or service being purchased is of a certified standard quality, it is considered to be beneficial to both the organisation and the customers.

Some other benefits it provides are discussed below. ISO 9000 is adjudged to have reduced errors during production process or provision of service. Organisations that are certified also have reduced customer complaints and reduced costs of quality. Irrelevant and unnecessary processes within an organisation can be eliminated by following ISO 9000 procedures. Organisations that are ISO 9000 certified have a marketing advantage owing to the fact that present and potential customers believe their product or service is of a standard quality.

For example, some giant companies now insist on quality management certifications from their suppliers. (Bono & Heller, 2006) Nevertheless, not everyone considers that ISO 9000 is beneficial to organisations. For example, some believe ISO 9000 standard is bureaucratic in nature and encourages ‘management by manual’. It is also believed that a lot of time and money is wasted conducting internal audits, training staff, writing procedure and documenting processes. In the same vein, it costs a lot in terms of time and money to achieve and maintain an ISO 9000 registration.

They argue that it is mechanical and makes operations inflexible rather than approached from a creative and customized way. (Stack, Chambers & Johnston, 2007) Quality awards are given to encourage the practice of quality improvement in recognition of the role of TQM. Since these awards promote an organisation’s image as being producers of quality goods and services, it therefore serves as a motivation for companies to embrace and maintain quality practice. Three major of such quality awards are the ‘Demin Prize’ in Japan, the ‘Malcolm Baldrige National Quality Award’ in the U.

S. and the ‘European Foundation for Quality Management’ (EFQM) excellence model as mentioned in the introduction. The EFQM model is also designed for self-assessment. Using this model makes it easier for companies to have a better understanding of the philosophies of TQM since they are translated into specific areas. It also enables organisations to measure themselves against achieving the objectives of TQM and makes it possible to determine the importance of different categories to its own circumstances. [pic] Fig. 4: The EFQM Excellence Model (Moore, 2007) 5.

Implementation of TQM Implementing TQM successfully is not as easy as it sounds. Many companies failed while implementing TQM because they did not properly integrate it within the organisation or after successful introduction, its impact on the organisation diminishes with the passage of time. (Stack, Chambers & Johnston, 2007). The latter can be said to be the case with Motorola which formally was in the forefront of quality management but eventually lost out to competitors due to gradual fading of quality practice within the organisation. (Bono & Heller, 2008) 9

Some factors must be put into consideration in order to avoid this pitfall. They are the key elements of TQM . 1. Key Elements of TQM For ease of understanding, the key elements are divided into four groups which collectively form a building structure based on their functions. The groups are foundation, building bricks, binding mortar and roof. The foundation consists of ethics, integrity and trust while training, leadership and teamwork form the building bricks. Communication is the binding mortar that binds the elements together and recognition forms the roof as shown in fig. below. Fig. 5: Key elements of TQM (Padhi, 2009) Ethics could be either organisational or individual. Business code of ethics established by the organisation should be followed by all employees. Integrity within and outside the organisation should be maintained as TQM cannot survive without it. Similarly, trust helps to build the right atmosphere for TQM to survive and is also a necessary tool for customer satisfaction. Good leadership is vital to the survival of TQM. Without the support and commitment of top management, TQM cannot succeed.

This is because they will need to allocate the resources to make it function properly and also to boost the morale of other workers within the organisation. A survey carried out shows that top management support is the most important factor required to make TQM implementation successful. Senior managers should not only support by believing in and giving their nod to the practice of TQM; they should also be active participants in implementing quality, solving quality problems, communicating the principles and techniques of quality management and maintaining quality throughout the organisation.

Teamwork, as in other activities, is necessary to make quality management work. Working together in a group would afford members the opportunity to share knowledge and experience from daily operational routines on quality practice. Training opens up new concepts and ideas needed for the organisation to sustain and improve quality and also bring about new challenges. Training also helps to tailor the implementation of TQM to conform and meet the specific requirements of the organisation.

Communication links all the other elements together. The success of TQM is tied to flow of information among employees as well as between suppliers and customers. Communication should be clear and unambiguous so that the receiver can correctly interpret what the sender intends. Recognition is the last of the key elements. Appreciating the efforts and achievements of those involved in quality improvement will encourage continuity and serve as incentive for others. It also boosts employee’s self esteem and productivity.

Recognition brings about a healthy competition among team members which will help to sustain the practice of quality management. (Padhi, 2009) Early feedback both from within the organisation and from customers is crucial to the success of TQM because it highlights areas of improvements. Competitive benchmarking is another integral part of TQM. It is the process of comparing performance against competitors in the same or similar markets with the objective of learning ideas and information which can lead to solutions.

Furthermore, the adoption of lean operations or Just-In-Time (JIT) which aims to meet customers’ demands instantaneously, with perfect quality and no waste will aid the achievement of TQM objectives. There is also the need to have a steering group to plan and oversee the implementation of the quality management program. This group has responsibilities such as the determination of when and how to start the program, the people to be involved, monitoring the progress of the program and also ensuring that all its benefits are realized.

The steering group is only meant to exist for a while after successful implementation of the program as its functions are expected to diminish with time and if not, it should strategically reduce its influence until it wanes and the program is taken over by the people involved in the operation processes. A general framework for successful TQM implementation is shown in fig. 6 The framework is concerned with setting the direction for the organisation as the top left three boxes reveal, then managing processes and finally moving through the framework, left to right, to measure and improve performance. Fig. : Framework for TQM Implementation (source: DTI) 2. TQM Implementation issues 12 The factors explained above will lead to a successful implementation of TQM. However, there are pitfalls that must be avoided in order not to experience failure caused by quality disillusionment, a situation where quality practice loses momentum with time after initial successful implementation. They are as explained below: The concept of TQM should be defined to include all the aspects of performance objectives explained earlier and should be seen as a continuous process and not a one-time achievement.

It should also be noted that by adopting TQM, poor leadership style is not suddenly corrected and normal leadership responsibilities of top management would not be replaced by responsibility for implementing TQM. TQM should be implemented in line with the strategic objectives of the organisation. It should naturally fit into the organisation’s normal activities. Organisations should not adopt TQM because of its popularity or hype. Rather, it should be as a result of a careful consideration.

TQM should not just be implemented the way others are doing it because each organisation is peculiar and has specific needs. It should be adapted to suit the circumstances of the organisation. 7. Conclusion The concept of TQM addresses overall organisational performance and there is extensive research evidence that proves its many benefits. The relevance of TQM in this 21st century is evidenced by its developments into holistic frameworks in many countries helping organisations to perform excellently especially in business developments. DTI) However, only organisations that have a clear purpose and high level of commitment from both the top management and their subordinates to the fundamentals of TQM will excel in the present-day competitive environment. 13 APPENDIX [pic] Process flowcharting used in the construction of process maps (Source: DTI) [pic] Control chart is one of the key tools of SPC used to monitor processes (Source: DTI) 14 Bibliography John S. Oakland (2003) Total Quality Management, third edition. Oxford: Butterworth-Heinemann John Beckford (2002) Quality, second edition.

Oxford: Routledge Matthew Moore (2007) What is the EFQM excellence model; in: http://www. onesixsigma. com/article/what-is-the-efqm-efficiency-model&us Department of Trade & Industry (DTI) The evolution of quality; in: www. dti. gov. uk/quality/evolution Christine Avery & Diane Zabel (1997) The Quality Management Sourcebook. London: Taylor & Francis Department of Trade & Industry (DTI) Total Management quality; in: www. dti. gov. uk/quality/tqm Nigel Slack, Stuart Chambers & Robert Johnson (2007), Operations Management, fifth edition. Harlow: Pearson Education Limited

Department of Trade & Industry (DTI) Tools and Techniques for process improvement; in: www. dti. gov. uk/quality/tools Department of Trade & Industry (DTI) Implement- From Quality to Organisational Excellence; in: www. dti. gov. uk/quality/implementation 15 Jones & N. Slack (2008) Quantitative Analysis in Operations Management, first edition. Harlow: Pearson Education Limited Nancy R. Tague (2004) The Quality Toolbox, second edition. ASQ Quality press HCI, The PDCA Cycle; in: http://www. hci. com. au/hcisite2/toolkit/pdcacycl. htm#Plan-Do-Check-Act Nayantara Padhi (2009) The eight elements of TQM; in: ttp://www. isixsigma. com/library/content/c021230a. asp Edward de Bono & Robert Heller (2006) Avoiding business disaster: Watch out for the icebergs ahead and be prepared for disruptive change; in: http://www. thinkingmanagers. com/management/business-disaster. php Edward de Bono & Robert Heller (2008) Total Quality Management; in: http://www. thinkingmanagers. com/business-management/total-quality-management. php Ron Kurtus (2007) Using TQM for a competitive advantage in business; in: http://www. school-for-champions. com/competition/tqm. htm ———————– i ii iii i ii iii i ii iii