Key Developments in Total Quality Management - Essay Example

Evaluate the key developments in Total Quality Management within the context of changing business requirements 1.0 Introduction Many definitions have been advanced in relation to quality over the years. They include ‘Fitness for purpose’ (Juran and De Feo 2010, p. 5); and ‘Conformance to requirements’ (Crosby 1979, p. 15). The ISO 9000: 2000 vocabulary defines quality in operational terms when it begins with the word ‘degree’ which implies that there is a scale associated with it. This further indicates that quality is ‘relative to what is acceptable’ to the customer and is based on ‘not only on what the customer needs but also what the customer expects’ (Schlickman 2003, p. 19). The definition also corresponds with that of Feigenbaum –‘meeting the expectations of customers’ and Deming’s – ‘meeting the present and future needs of the customer’. When combined this is how Plunkett et al (2007, p. 6) expect organisations to please customers. Total quality management (TQM) is a participative and systematic approach to the planning and implementation of process involving continuous improvement in an organisation (Kaluzny et al 1992, p. 257). It is one of the most comprehensive approaches to performance improvement as it encompasses a whole range of concepts including: business process management; change management; project management; supply chain management; supplier development; balanced scorecard; concepts relating to rewards and recognition; benchmarking; lean management systems; quality management systems; and management and employee transformation. The aim of TQM is to satisfy customers’ future and current needs, identify problems, build commitment, and promote the involvement of employees in decision-making (DTI n.d.b) . Juran described TQM in terms of a chain reaction as ‘the set of management processes and systems that create delighted customers through empowered employees’ which leads to increased revenue and a reduction in cost (Ross and Perry 1999, p. 1). 2.0 Quality Gurus on Management Since the 1940s there have been three distinct groups of quality gurus. The first group was the Americans who originated in the early 1950’s and took the messages relating to quality to Japan (DTI n.d.a). They include: W. Edwards Deming who placed great emphasis on the responsibility of management and developed a 14 point plan and was a chief proponent of the Plan, Do, Check, Act (PDCA) cycle; Joseph Juran who developed the quality trilogy - quality planning, quality control and quality improvement; and Armand V. Feigenbaum who originated total quality control. The second group was the Japanese who came about in the late 1950’s. They include: Dr. Kaoru Ishikawa who emphasised seven basic tools of quality; Dr. Genichi Taguchi who broke down off-line quality into system design, parameter design and tolerance design; and Shigeo Shingo who is associated with Just-in-Time manufacturing. The third group was the western gurus of the 1970’s and 80’s. This group include: Phillip B. Crosby who is known for the concepts – ‘quality is free’ and ‘zero defects’; and Tom Peter who identified leadership as being fundamental to the quality improvement process Since then there has been various approaches incorporating TQM. 3.0 Key developments in TQM There are four stages in the evolution of TQM – inspection, quality control (QC), quality assurance (QA) and total quality management (TQM). These stages correspond to various changes in business requirements. 3.1 Inspection In the initial stages the focus was on inspection after goods were manufactured in order to test for conformity with requirements. This test was not effective in solving problems in so far as it did not identify which supplier, process or worker caused the problem (Dale 2007, p. 25). Shewhart and Deming decided that inspection to identify defects was not enough due to the financial impact that it had on the organisation since items that were found to be defective had to be reworked. It was therefore concluded that quality should be built into the process. This led to the next stage – QC. 3.2 Quality Control Deming is best known for popularising and developing the system of statistical quality control. He believed that quality should be built into the product at all stages throughout the process so that high levels of excellence can be achieved. This represents a step forward in the drive towards eliminating waste which is one of the goals of TQM and Deming played a great role in increasing the visibility of the process and promoting an awareness of the importance of improving it. QC led to a reduction in non-conformity but they were still aimed at detection and fixing mistakes instead of prevention. Both inspection and QC results in the manufacture of non-conforming products and the provision of non-conforming services before the process is adjusted. This is inefficient and ineffective as it produces wastes in many different forms. This led to the concept of QA (Dale 2007) 3.3 Quality Assurance The aim of QA is prevention. Dale (2007, p. 27) indicates that in progressing from QC to QA some of the additional feature that were required included: ‘a comprehensive quality management system to increase uniformity and conformity’; use of the seven quality tools (histogram, check sheet, Pareto analysis, cause-and-effect diagram, control chart, and scatter diagram)’; statistical process control; failure mode effect analysis (FMEA)’; ‘and the gathering and use of quality costs.’ National as well as international standards are used to ensure QA. In the United States there is the Baldrige National Quality Programme (BNQP) is a national standard for total quality management which is used to assess organisations based on a seven point criteria for performance excellence – leadership, information and analysis, strategic quality planning, human resource development and management, management of process quality, quality and operational results; and customer focus and satisfaction (Powell 1995, p. 18). Out of a possible 1,000 points customer focus accounts for 300 points or 30% of the total. This is an indication of the significance of the customer in the supply chain. BNQP has certain similarities with TQM, and ISO 9001: 2000 but there are some key differences (Schlickman 2003, p. 8). The Baldrige National Quality Awards are presented annually to companies’ hat have implemented effective quality management systems (ASD n.d.). The International Standards Organisation (ISO) provides standards that are used to identify organisations that are certified and are accepted worldwide. A positive relationship was identified between company results and ISO 9000 (Wayhan et al 2002). However, it was later found that more profitable companies implemented the certification (Haversjo 2000). Quality Assurance and specifically ISO 9000: 2000 has implications for supply chain management. Once an organisation’s suppliers are certified ISO 9000, this is an indication that the raw materials used in the manufacturing process have met certain standards (Schlickman 2003). Therefore, the concerns related to the quality of raw materials are no longer a major focus. Quality auditing is a means by which customer’s contract requirements are met (Wealleans 2005, p. 5). This is what ISO certification involves. 3.4 Total Quality Management This represents the fourth and final stage in the evolution of quality. The emphasis is on the application of quality management principles. TQM requires that these principles are applied to all areas - every department and every level, of the organisation. The effort is on soft skills and the elimination of waste and non-value added activities. Schlickman (2003, p. 13) indicates that ISO 9001:2000 which relates to quality management system (QMS) has integrated the following quality management principles in its requirements: i. Customer focus ii. Leadership iii. Involvement of people iv. Process approach v. Systems approach to management vi. Continual improvement vii. Tactical approach to decision making viii. Mutually beneficial supplier relationships All of the eight principles identified are fundamental to TQM. Additionally, the implementation of strategic and performance management systems will enable the success of TQM. 4.0 Strategic and performance management systems A number of strategies and strategic management systems have been used in the quest to achieve total quality management in various organisations. In order to gauge an organisations performance as well as to ensure that performance include financial and non-financial aspects approaches such as balanced scorecard, Six Sigma and benchmarking are being used to a large extent. 4.1 Balanced scorecard According to Schlickman (2003, p. 12) integrating an organisation’s objectives with quality and customer satisfaction metrics is ‘the most effective way to evaluate corporate governance’ which is exemplified in the balanced scorecard (BSC). BSC which builds on Deming’s model of TQM is a strategic planning and performance management system resulted from the need to find alternative metrics that encompass more than just financial performance. The idea of BSC emerged from various consultations with organisations in order to identify a planning and performance control process that was suitable for the 1990’s which was an ideal time for these types of control tools. The balanced scorecard approach requires that the organisation develops key performance indicators that management can use to monitor the organisation in order to determine how well the organisation is achieving its goals (Olve and Sjostrand 2006, p.14). Balanced scorecard covers four critical perspectives: financial perspective; customer perspective; internal business perspective; and learning and growth perspectives (Finkler 2010, p. 299; Horngren 2011, 493). An important feature of the balanced scorecard is that of drivers and outcomes. A good scorecard represents the documentation of a strategic logic which links current activities to long-term performance through a cause and effect relationship (Olve and Sjostrand 2006, p. 15). Horngren et al (2011, 493 - 496) uses this cause and effect relationship in illustrating how the balanced scorecard approach can be utilised to grow an organisation’s customer base and its revenues. The organisation that was used to demonstrate this process achieved its goals by focusing on key objectives in each of the four dimensions of its scorecard. In the financial perspective the organisation increased its income and the value of its shareholder’s wealth by managing cost and unused capacity as well as building strong customer relationships. From the customer perspective the organisation increased market share and customer satisfaction by identifying the current and future needs of customers and identifying new customer segments to target in order to ensure the growth of the organisation. In relation to the internal business process perspective the organisation improved its service response time, manufacturing productivity and quality; delivery time, as well as the organisations processes and manufacturing capability. A number of initiatives were used to obtain these results including: the organisation of research and development teams to implement advanced control; organisation of teams for the modification of processes from both manufacturing (which is concerned with production) and sales (which is concerned with providing service); reengineering of the order and delivery process in order to identify the root cause of problems so as to improve quality; improving the customer service process. The goals of employees were aligned with those of organisation; the workforce was empowered; process skills were developed; and the organisations information systems were enhanced through various initiatives (Horngren et al 2006). This is essentially the heart of TQM – continuous improvement in order to achieve customer satisfaction, facilitate competiveness and enabling the achievement of overall improvement in performance. Powell (1995) also suggests that there is a significant relationship between TQM, competitive advantage and business performance. 4.2 Six Sigma Sigma is a measure of how good a product or service is. The sigma value indicates the number of defects – the higher the value of sigma, the lower the number of defects. It is a way of measuring performance relative to the needs of the customer (Dale 2007, p. 7). The term ‘quality’ and ‘Six Sigma’ often go together and is seen as a ‘rebirth of the quality movement’ and originated in the teachings of Deming and Juran (Pande et al 2000, p. xii). It was developed at Motorola as an approach to improvement in productivity and quality as well as a reduction in cost. Six Sigma is now very popular as a way of improving businesses. This is why it is used by companies that are in pursuit of perfection because it represents a complete way of tackling process improvement from a quantitative approach (Dale 2007, p. 7). Dale (2007,p.7) suggests some key features which indicate what Six Sigma represents. They include a significant commitment to training in statistics and the use of statistical tools. In relation to the implementation of Six Sigma, Master Black Belts, Black Belts and Green Belts are required within the organisation. Master Black Belt is the highest level of organisational and technical proficiency. Those who have attained this level are required to provide the necessary leadership for introducing the program in an organisation. They are required to train others in the organisation and so this group more than ever is required to have a thorough understanding of mathematical theory and statistics. The candidates for Black Belt are required to be technically competent and are normally held in high regard by their peers. They are usually engaged in organisational change and development. They are required to have at least college math and be fairly proficient in using advanced statistical analysis software and be comfortable using computers. Their activities should also be integrated with the information systems of the organisation. Green Belts are required to lead projects from the initial stages to the stage of completion. Their training covers project management, quality management, quality control, problem solving and descriptive data analysis (Pyzdek 2009). 4.3 Benchmarking Benchmarking compares similar activities so that superior practices can not only be identified but also adopted in order to increase productivity. This can only be effective when the appropriate benchmarking measures are used to gauge comparative performance (Ackerberg et al 2006, p. 161). Benchmarking is an externally focused quality improvement technique that looks at the best practices of departments within the organisation, competitors and organisations with activities that are deemed to be functionally similar. As long as superior performance is identified the next step is to gain an understanding of the enablers or drivers of such performance and then apply them to the organisation (Swanson 1995, p. 243). Benchmarking is one of the strategies used in order to compete effectively in the market. It is a process that is used by organisations in order to target the key areas in their operations that can be used to improve competitiveness, productivity and quality. Organisations perform this strategy when they compare their performance against other companies doing similar business. Quality needs to have a basis for comparison and so organisations use this strategy to determine how they are performing in comparison with their competitors. This allows them to remain competitive. Comparison is normally done with the best performing organisations. Every organisation can benefit from benchmarking as it is highly unlikely that an organisation does everything well or has nothing to learn from the successes of other organisations (Swanson 1995, p. 203). 4.5 Eliminating waste and unnecessary costs TQM is about lean manufacturing – eliminating waste through the removal of unnecessary activities. Through a process of business process reengineering (BPR) where waste is continuously eliminated overtime. Just in time (JIT) techniques are also utilised in order to ensure that the organisation can accommodate inventory for which JIT strategies cannot be utilised. This reduces cost of storage and leads to reduction of costs to the benefit of the customer and other stakeholders. JIT ensures that certain raw materials are received JIT for production. This is an effective and efficient method of operating and conforms to TQM. 4.6 Additional requirements for successful TQM TQM requires effective leadership and use of the right tools and techniques to ensure an improvement in quality. Effective leaders motivate and are not managers who only give direction (Swanson 1995, p. 2). It requires a team-based and not an individual system of recognising employees. This is what Peters and Waterman spoke of in their book “In Search of Excellence”. Peters emphasized management by walking about. Being there on the shop floor and ensuring that things are being done properly. The primary analytical techniques that are used in quality management includes those for process definition, those for collecting data, those for analysing cause and effect, and those for analysing and illustrating data (Swanson 1995, p. 6). The tools used for defining the process are flowcharts, process analysis worksheet, and tree diagrams. In terms of collecting data check sheets, focus groups, sampling and surveys are utilised. In analysing cause and effect cause-and-effect (Ishikawa or fish bone) diagram, five whys, and interrelationship digraphs can be utilised. Charts and graphs are used for analysing and illustrating data. Project management tools such as Gantt chart are also useful for planning. 5.0 Conclusion TQM is definitely an all encompassing concept that has evolved by keeping abreast with the changes in business requirements. It has gone from inspection to control to assurance and than to the implementation of quality management systems to ensure success. It covers the whole realm of strategies from JIT manufacturing techniques to BSC, benchmarking, and supply chain management to Six Sigma implementation. These and other approaches that seek to ensure various tenets of excellence and quality management in organisations are ways of describing TQM. They all represent techniques that are not only designed to satisfy customers’ needs and expectations through continuous improvement but also allows an organisation to keep abreast with changing business requirements, especially those associated with globalisation and increased competition. References Ackerberg, D.A., Machado, M.P and Riordan, M.H. (2006). Benchmarking for Productivity Improvement: A Health-Care Application. International Economic Review: 47(1) p. 161 – 201 ASQ (n.d,). Malcolm Baldrige National Quality Award. 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